Has the Exchange Rate Pass‐Through changed in South Africa?

This paper uses the two‐stage exchange rate pass‐through (ERPT) framework instead of the direct pass‐through (PT) from the exchange rate to consumer inflation to assess the variation in the ERPT for South Africa from 1994 to 2014. The paper uses rolling‐window estimation to examine the possibility of change in the ERPT over time. In addition, it investigates the asymmetric behaviour of the ERPT over the business cycle. The results indicate that the ERPT for South Africa is complete in the first stage but incomplete in the second stage. It implies that retailers do not pass all the cost to consumers. The first‐stage ERPT has declined slightly since the Global Financial Crisis. Weak domestic demand and possibly the concentration of firms in the manufacturing sector are the main forces behind this low PT. Moreover, there is evidence of asymmetry in the first‐stage ERPT in that it tends to rise in the upturn phase of the economy compared to the downturn. The second‐stage ERPT shows a considerable decline since the adoption of the inflation‐targeting regime. Similar to the first‐stage case, the PT is muted in the downturn but rises in the expansionary phase by about 10%.     

Does Oil Wealth Affect Democracy in Africa?

This paper uses recent data on historical oil wealth to provide new evidence on the effect of oil wealth on democracy in Africa from 1955 to 2008. We find that oil wealth is statistically associated with a lower likelihood of democratization when we estimate the relationship in a pooled cross‐sectional and time‐series setting. In addition, when estimated using fixed effects and IV‐2SLS methods, the strong negative statistical association continues to hold. Indeed, this result is robust to the source of oil wealth data, the choice and treatment of the variables set, and the sample selection. Our results also show other interesting and important results. The cross‐country evidence examined in the study confirms that the ‘Lipset/Aristotle/modernization hypothesis’ (that prosperity stimulates democracy) is a strong empirical regularity. Also, the propensity for democracy rises with population size, population density, ethnic fractionalization, having British legal origin or colonial heritage, and having a supportive institutional environment in the form of maintenance of the rule of law. However, apart from oil wealth, democracy tends to fall with linguistic fractionalization and rough (mountainous) terrain. Moreover, consistent with the data, North Africa consistently fails to favor democratic development.     

Broiler production in South Africa: Is there space for smallholders in the commercial chicken coup?

It is agreed that agriculture provides avenues for impoverished households to produce and trade their way out of poverty. However, this requires market access and value chain integration of small-scale farmers. This paper explores the possibilities for integration of small-scale farmers into the mainstream commercial broiler value chain in South Africa. Production costs of small-scale producers are evaluated within the context of their commercial counterparts, with a case study approach. It revealed that small-scale producers pay more for inputs but also receive a substantial premium for sales of live birds in the informal market. This results in attractive gross margins for small-scale producers. There is, however, a production ceiling, due to demand and production considerations, associated with small-scale broiler production. This ultimately results in a dualistic industry with an informal (live sale) value chain at the one end of the spectrum and a sophisticated large-scale commercial value chain at the other. Given the salient production features and investment requirements associated with large-scale broiler production, organic growth from the small-scale value chain into the commercial value chain seems improbable. The dual nature of this industry should therefore be considered when developing policy geared towards development, poverty alleviation and value chain integration.     

Stipend-paid volunteers in South Africa: A euphemism for low-paid work?

Given the high unemployment rates in South Africa, the government has introduced policies to assist individuals to enter the job market, including stipend-paid volunteering. This research sought the views of stipend-paid volunteers and managers from four Johannesburg-based non-governmental organisations. The aims were to investigate whether stipend-paid volunteering was more like low-paid work than volunteering, the motivations for stipend-paid volunteering, the relationship between livelihood strategies and stipend volunteering, and the challenges and opportunities facing stipend-paid volunteers. It emerged that stipend-paid volunteers were initially motivated by extrinsic factors, such as the stipend, but later their volunteerism was sustained by intrinsic motivations, such as their community service orientation. While stipend-paid volunteering provided opportunities for training and experience, the work also presented challenges in terms of emotional stress, low remuneration and minimal support. Findings suggest that stipend-paid volunteerism would seem to be a euphemism for low-paid work.     

What about the race between education and technology in the Global South? Comparing skill premiums in colonial Africa and Asia

Historical research on the race between education and technology has focused on the West but barely touched upon ‘the rest’. A new occupational wage database for 50 African and Asian economies allows us to compare long-run patterns in skill premiums across the colonial and post-colonial eras (c. 1870–2010). Our data reveal three major patterns. First, skilled labour was considerably more expensive in colonial Africa and Asia than in pre-industrial Europe. Second, skill premiums were distinctly higher in Africa than in Asia. Third, in both regions, skill premiums fell dramatically over the course of the twentieth century, ultimately converging to levels long observed in the West. Our paper takes a first step to explain both the origins of the Africa–Asia gap and the drivers of global skill premium convergence, paying special attention to the colonial context that shaped demand, supply, and labour market institutions.     

Inflation-Output Trade-Off in South Africa: Is the Phillips Curve Symmetric?

This study sets out to investigate whether the inflation-output trade-off in South Africa is symmetric or asymmetric; and if asymmetric, whether it is convex or concave. A New Keynesian dynamic stochastic general equilibrium model calibrated on South African data reveals that a negative demand shock reduces inflation and output while a positive demand shock of the same magnitude leads to a smaller increase in inflation and a larger increase in output, indicating that the inflation–output relationship in the country is concave asymmetric. These findings corroborate estimation results of the inflation-expectations augmented Phillips curve conducted using difference GMM on quarterly data.     

Money Demand and Economic Liberalization in a Small Open Economy—Trinidad and Tobago

Economic liberalization creates potential instability in money demand. The introduction of liberalization in the early 1990s coincided with instability in the long-run demand for broad money (M2). OLS estimates confirm the presence of a structural break in the M2 model. Monetary policy should be based on a narrow definition of money. Moreover, the demand for money function must take explicit account of the openness of the economy. The results have important implications for policymakers in other Caribbean countries that are contemplating economic liberalization.     

Who cares for children? A quantitative study of childcare in South Africa

In this study we investigate the gender division of labour in the physical and financial care of children in South Africa, in the context of large race differences in rates of union formation and parent–child co-residence. Using national micro-data, we show that across a variety of household forms, women are the primary caregivers of children even when they are not a child’s biological mother. Women are also more likely to provide physical care than men are to provide financial support for children’s schooling. However, this gender imbalance is far larger in the case of African children, the majority of whom do not live with their father. For most African children, both their physical and financial care is provided by women who are typically the child’s biological mother, but also the child’s grandmother or another female relative.     

The debate on the future of the population census: Relevance for South Africa?

The cancellation of the Canadian census long-form questionnaire in 2010 and its subsequent reinstatement in 2015 resulted in a vigorous international debate on the future of the mandatory census. Questions concerning state invasions of personal privacy, party political interference and public trust and cooperation in state data-gathering were raised. As a result, alternative forms of demographic data collection were explored and the experiences of other countries examined. National population registers and non-mandatory surveys offered alternatives, but each had their own distinct disadvantages. South Africa has continued to conduct mandatory detailed censuses since 1994 and the enumerations have encountered little political opposition because they are presented as essentially nation-building exercises providing credible and relevant data, upon which national policies may be based and monitored. At present there is little incentive to change the current format of statistical collection in the absence of a viable alternative.     

Are ‘Albergo Diffuso’ and community-based tourism the answers to community development in South Africa?

Conventional mass tourism shortcomings have facilitated the origin of alternative forms of tourism such as community-based tourism (CBT). Lately, another form of tourism known as ‘Albergo Diffuso’ (AD) has also been mentioned as a possible strategy to revive depressed specific local contexts, such as townships, villages and small towns. This article’s aim is twofold: first to contextualise the concept of AD in the South African milieu and secondly to investigate the possible relationship and role that CBT and AD could have. In this context, specific characteristics and similarities between CBT and AD are explored. The article’s main contribution concerns the exploration of the AD concept as an alternative form of tourism related to local community development. This is the first time that this concept has been presented in a South African context.     

Public works programme and primary health care in South Africa: Creating jobs for health systems strengthening?

This paper examines employment and skills training for community caregivers within the expanded public works programme in South Africa. The paper argues that, as currently conceptualised, the skills and learnership programmes for community caregivers fail to take full advantage of the prevailing labour market realities. Therefore, the paper argues for strategic reconceptualisation of the programme to include learnerships for community caregivers that impart more mid-level to higher-level skills to meet current and future labour market demands particularly in primary health care. This, it is argued, will address the scarcity of skills in the health sector of the economy. Furthermore, the proposed programme will simultaneously have positive impacts on unemployment, the primary health care system and the socio-economic well-being of community caregivers.     

When is enough,enough? Advocacy,evidence and criticism in the field of urban agriculture in South Africa

In South Africa, the advocacy of urban agriculture as a means of improving the plight of the urban poor has been a major theme in the literature since the early 1990s. Ironically, the criticism of that advocacy has almost as long a history. To elucidate these two themes, this paper investigates the evidence on which the advocacy is based, outlines the criticism of the advocacy, and analyses the responses to the criticism. It suggests that continued advocacy in the face of disconfirming evidence is misplaced and calls for greater caution. It observes that responses to the criticism have been weak and concludes that continued advocacy and continued criticism, in parallel, hamper debate. Unless there is engagement between the advocates and the critics, not only will the field of urban agriculture suffer, but so will the urban poor.     

Beyond community participation? Alternative routes to civil engagement and development in South Africa

Although community participation still enjoys a high level of support across various sectors in South Africa, its practice is fraught with conceptual and practical difficulties. This paper starts out by examining some of the problems and limitations associated with community participation, including the heterogeneity and fragmentation of many poor communities, the lack of social and material resources and community members' expectations of receiving a return from their involvement in development projects. Participatory rural appraisal (PRA) or participatory learning and action (PLA) is used as an example to illustrate some of the conceptual and theoretical limitations that characterise most approaches to participatory development. In particular it is argued that approaches such as PRA/PLA lack the theoretical basis for effectively getting to grips with the problems of participatory development. What is needed is a conceptual framework not only to understand the responses of communities, but also to locate such communities within their socio-economic contexts. The second part of the paper therefore examines three developments in social science theory that may be able to contribute to the development of a richer conceptual framework for popular participation. These are the concept of social capital, the asset-based approach to development, and the debate around the role of the state in development.     

The main findings of the district pilot project of labour‐intensive road construction and maintenance in Botswana and the implications for similar projects in South Africa

Unemployment has been identified as one of the main problems confronting South Africa. Recently, in order to improve rural infrastructure and create employment, several pilot projects of rural road construction have been initiated in South Africa. In such a context it is considered that attention should be drawn to a pilot project carried out some time ago in Botswana to examine the potential of labour‐intensive methods in the construction and maintenance of rural roads.

The main conclusion of the pilot project was that labour‐intensive methods were viable, although attention had to be paid to several critical factors. In 1982, following its evaluation of the pilot project, the Government of Botswana decided that over the next five years the technical and organisational methods developed during the pilot project should be replicated throughout Botswana.

After a brief survey of the background to the project, the paper summarises several important features of the pilot project and its main findings. The paper closes with some comments on the implications of this pilot project for those currently underway in South Africa.     

Infrastructure in South Africa: Who is to finance and who is to pay?

Against the backdrop of shifting views on the role of government in the provision of infrastructure, this paper distinguishes between the payment for and financing of the South African Government's infrastructure investment programme. The paper argues for a clear distinction between loan financing by the government for macroeconomic considerations and the benchmark approach to the financing of infrastructural projects. It presents a classification system that enables a systematic mapping of all prospective projects, with reference to considerations of efficiency and equity, and uses this system to question the government's financing strategy and identify alternatives. The Gautrain Rapid Rail project is used as a case study to demonstrate these alternatives.     

Public assets and services delivery in South Africa: Is it really a success?

Poverty alleviation remains a pressing concern for South African policy-makers. Implementing effective anti-poverty policies requires a clear understanding of the nature and extent of poverty. The extant literature on South African poverty dynamics shows a decline in the headcount ratio over the first decade of the twenty-first century. However, the prior research largely adopts a narrow money-metric approach, or uses multi-dimensional indices that include welfare indicators based on private assets (e.g. television sets) or those that are provided publicly (e.g. access to water). This paper uses multiple correspondence analysis to measure non-income poverty trends for the period 2005–12. The novelty in this undertaking lies in an attempt to include a measure of the perceived quality of public assets and services to complement the standard indices. This provides some measure of ‘success’ of public service delivery, accounting for both changes in access and quality.     

How Sensitive is the Demand for Primary Education to Changes in Economic Factors?

During the recession in the 1970s and 1980s in less-developedcountries in general and in Zambia in specific, private costsof schooling increased and school quality deteriorated. Combinedwith poverty, these changes may have damaged the demand forprimary education. This observation motivated a study of therelationship between economic variables and the demand for primaryeducation. A binary choice model for the school enrolment decisionis estimated, and the relevance of economic incentives concerningthe decision to enrol in school is tested directly. Economicincentives to enrol in school are reflected in household income,educational expenses and quality indicators, and the resultsshow that they all affect school enrolment as expected, eventhough the magnitudes of the effects are relatively moderate.