Are people in the SADC region willing to pay more tax to fund public healthcare?

ABSTRACT

For Africa to develop and achieve sustainable development, African governments have to prioritise spending on public health. However, the current spending data shows that health spending is a continuing struggle for African countries. Many researchers have the view that African governments have to collect more tax to spend enough on public healthcare. The question here is what extent people are willing to pay more tax to increase spending on public healthcare? Employing a multilevel regression model on Afrobarometer survey data, this paper examined to what extent individual and country level factors influence people’s willingness to pay more tax to increase spending on public healthcare in 12 Southern African Development Community (SADC) member states. This study found that peoples’ trust in their government is an important determinant of willingness to pay more tax, while factors such as the country’s quality of democracy, economic condition, and current per capita health expenditure have no influence.     

Colonial taxation and government spending in British Africa, 1880–1940: Maximizing revenue or minimizing effort?

Colonial state institutions are widely cited as a root cause of sub-Saharan African underdevelopment, but the opinions differ on the channels of causation. Were African colonial states ruled by near absolutist governments who strived to maximize revenue extraction in order to strengthen their grip on native African societies? Or did European powers build ‘states without substance’, governed with minimal resources and effort, failing to invest in basic public goods? This paper develops an analytical framework for comparing colonial tax and spending patterns and applies it to eight British African colonies (1880–1940). We show that colonial fiscal systems did not adhere to a uniform logic, that minimalism prevailed in West Africa, extractive features were more pronounced in East Africa, and that Mauritius revealed characteristics of a developmental state already before 1940.     

Contributing to the African Renaissance vision: The role of South African higher education institutions

President Mbeki is emphasising the vision of an African Renaissance in many of his public addresses. Many multifaceted inputs are required to realise this vision, and human resources development is one of the cornerstones of this ideal. South African higher education institutions could play a major role in this quest by sharing their expertise to upgrade the scientific, economic and educational competencies of all people in Africa. Data analysis shows considerable potential for attracting students from Africa, especially from the Southern African Development Community, to study at South African institutions. Current initiatives for facilitating intellectual mobility across the country's borders lack vision, however. Academic exchange programmes in other countries could serve as models to kick-start the contributions of higher education institutions in South Africa in realising Mr Mbeki's vision for an African Renaissance.     

Tax policy implications for a two‐engine growing economy

In an endogenous growth model with two engines of R&D and capital, we investigate the environment of “inclusive growth” for tax reallocations (tax increases or tax credits) to gain broader benefits in terms of promoting the overall GDP growth without an increase in income inequality. Our results show that a tax increase in the capital‐good sector can result in inclusive growth, boosting overall growth and reducing income inequality, provided that the status quo tax rate is not too high. Surprisingly, tax credits are not able to achieve such inclusive growth. While the GDP growth rises, a tax credit in the R&D sector not only increases income inequality but also decreases the aggregate employment, if the labor mobility cost between the final‐good and R&D/capital‐good sectors is relatively low. This provides a caution to policymakers given the fact that research tax credits have served as a common incentive to strengthen the R&D environment.     

Does financial development contribute to the achievement of the “Zero Hunger” goal in Africa?

This study examines the effects of financial development on undernourishment with panel data from 40 African countries. We show that financial development in all its dimensions reduces undernourishment. In addition, financial development, financial institutions, the financial market, and financial market depth reduce child stunting. We also identify education, health expenditure, access to electricity, and control of corruption as the main transmission channels through which financial development reduces undernourishment. These results have important implications for the achievement of the “Zero Hunger” goal in Africa and for improving child nutrition.     

IMPACT ON ECONOMIC GROWTH OF DIFFERENTIAL POPULATION GROWTH IN AN ECONOMY WITH HIGH INEQUALITY

The economic growth of South Africa has been disappointing over the last quarter century. This note addresses a conceptual problem that arises because of composition effects. Two important features of the South African economy are, first, its extreme inequality (primarily between the white population and the African population). Additionally, the African population has been growing rapidly, while the white population has experienced a declining share. This note derives an explicit equation for the impact of inequality and population-growth differences on the growth of per capita GDP. It shows that the combination of divergent population growth and high inequality can lead to an apparent drag on measured economic growth even though the components, and a more adequate measure of economic welfare, are growing at a healthy rate.     

Institutional Foundations for Shared Growth in Sub‐Saharan Africa*

Abstract: The paper examines the dynamically evolving triangular relationships between institutions, growth and inequality in the process of economic development, in order to deepen the understanding of institutional conditions for pro‐poor growth and shared growth. In this context, the paper discusses the institutional conditions found in sub‐Saharan Africa, which may have produced the growth pattern that is unequal and against the poor. The analysis shows that sub‐Saharan African countries require transforming institutions for embarking upon and sustaining a development path which would ensure shared growth in years to come. The paper first evaluates the growth‐inequality‐poverty nexus, as found in the recent literature, which increasingly challenges the trade‐off between growth and equity, as postulated in the traditional theories. Various definitions of pro‐poor growth are discussed and a sharper definition of the concept of ‘shared’ growth is provided. Definitions of institutions are then examined, as well as the triangular inter‐relationships between institutions, inequality and poverty. The paper finally analyses specific institutional conditions found in sub‐Saharan Africa that prevent economies from emerging out of low‐equilibrium poverty traps that are characterized by low economic growth, unequal distribution of income and wealth as well as unequal access to resources and power.     

LOCAL TAXATION IN SOUTH AFRICA

"We are most of us profoundly uninterested in municipal affairs." Maud.
T his paper questions the rationale of the South African system of local taxation. It is argued that our system has too narrow a tax base-fixed property-to supply the needs of the modern city; that property taxation is iniquitous in its effects upon taxpayers; and that today it is being applied to finance categories of expenditure for which a tax on property was never intended. Some new thinking is required to devise a system that would supply a closer link between financial requirements and ability to pay.     

The long‐run relationship between ODA,growth and governance: An application of FMOLS and DOLS approaches

Despite having received a significant amount of foreign aid for several decades, Africa is among the poorest regions in the world. This study examines the relationship between foreign aid, economic growth and governance in the African region during the period 1996–2014 by fully applying both DOLS and FMOLS techniques. In the first stage of this study, we examine the foreign aid effect on economic growth. In the second stage, we assess the intermediary role of institutions in the relationship between foreign aid and economic growth in the African countries. It was found that foreign aid has a negative effect on economic growth in African countries in both FMOLS and DOLS models. However, empirical results indicate that foreign aid improves economic growth in the presence of good institutional quality only in the DOLS model.     

The Impact of Macroeconomic Fluctuations on the Likelihood of African American Female Homeownership

Homeownership, a primary component of household wealth, confers benefits not just in terms of the value of home equity itself, but also the tax benefits and inflation protection associated with owning property. The 1990s represented a booming time in the economy and record low interest rates which allowed homeownership to become more available to more people than ever. As a result, the US housing market experienced significant growth and home values began to soar in part due to rising incomes. However, this period of rapid expansion in the housing market was followed by a rapid decline, precipitated by the recession, as home values began to plummet and foreclosures steadily increased. This study examines the impact that recent macroeconomic fluctuations had on the likelihood of homeownership for African American women compared to their white counterparts. Using data from the American Housing Survey (1997–2009), this tenure spatial analysis used a logistic regression model to examine the odds in favor of homeownership during economic fluctuations along with taking into consideration other important determinants. The empirical results show that there are significant differences in the likelihood of homeownership between African American women and white females.     

THE IMPLICATIONS OF SOUTH AFRICAN ECONOMIC GROWTH FOR THE REST OF AFRICA

This paper measures the extent to which South African economic growth is an engine of growth in sub‐Saharan Africa. Results based on panel data estimation for 47 African countries over four decades suggest that South African growth has a substantial positive impact on growth in the rest of Africa, even after controlling for other growth determinants. The estimates are robust to the effects of global and regional shocks, changes in model specification, and sample period.     

Multinationals,Institutions and Economic Growth in China

This study examines the effects of multinationals and economic institutions on the economic growth of cities in China. Consistent with previous findings, the empirical results suggest that property rights institutions are significantly more important than contracting institutions in promoting economic growth. The direct effect of multinationals on economic growth is generally insignificant statistically. However, a statistically significant and robust interaction effect exists between property rights institutions and multinationals on economic growth, whereas no such effect is observed between contracting institutions and multinationals. The results are attributable to the fact that multinationals can rely on reputation or personal connections to enforce contracts when contracting institutions are weak. However, it is difficult for multinationals to operate when the state expropriates their profits (i.e. property rights institutions are weak).     

Thinking regionally: Aviation and development implications in the Karoo region,South Africa

This study focuses on regional economic development in South Africa, across provincial political jurisdictions. The article argues that remote hinterlands can be more usefully understood as forming an integrated whole, rather than functioning as the poor rural cousins of their provincial metropoles. This article considers three propositions: that key transport projects (such as airports) may unlock regional development; that this may stimulate regional spatial integration; and that this may spur the South African government to address its weak regional planning system. All three propositions are speculative, drawn from the international literature, but they contribute to an argument for greater spatial coherence in South African planning in rural regions. The argument is illustrated with reference to the Karoo region of South Africa, and the potential of a new airport to impact on regional economic dynamics. Furthermore, the article argues that such impacts will require new regional planning systems, which are currently absent from the South African political system.     

The impact of trade facilitation factors on South Africa's exports to a selection of African countries

Economic growth can be enhanced through increased trade among countries, provided the correct institutional structures are in place. A country's trade is dependent not only on its own trade facilitation reforms but also on those of the trading partners. This paper, using an augmented gravity model, examines trade facilitation factors that impact on South Africa's exports to other selected African countries. The results of the estimation reveal the following. An improvement in the customs environment within the importing country provides the largest gain in terms of increasing trade flows, followed by the regulatory environment and domestic infrastructure. Furthermore, adjacency and common language impact positively on South African exports, while distance between countries impacts negatively on it. Being part of the Southern African Development Community is also enhancing exports from South Africa, compared with being part of the East African Community.     

Innovation in Africa: Why Institutions Matter

Given the role that innovation plays as an engine for economic development, we examined the enabling factor of institutions in Africa. Particularly, attention was given to determining the equivalent effects of institutional development on innovation. A sample of 40 African countries over the period 1996‐2012 was employed, and our baseline equation was estimated using the system generalised method of moments (SGMM) estimation technique. The empirical result reveals that government effectiveness and regulatory quality are two institutional measures that have the most equivalent impact on innovation. The extent of impact is an indication that institutions matter, especially when considering innovation in Africa. Therefore, to advance the rate of innovation in Africa, improving frameworks to drive regulations and enhance government effectiveness is a necessary instrument. Having these in place, Africa will be able to catch up with advanced economies.     

The Impact of Trade Liberalization on Revenue Mobilization and Stability in Sudan

Abstract: This paper attempts to examine key aspects of the Sudanese tax system, paying particular attention to the impact of the recent trade liberalization on government revenues. An eclectic method of analysis is utilized. The results show that the Sudanese tax system as a whole is not buoyant or elastic; the same applies for its major handles. The liberalization reform did not appear to have enhanced revenue productivity and stability in the country. This result indicates the presence of substantial slacks in tax collection and tax evasion. The analysis also shows that tax evasion is the main problem facing tax administration; on average, it stands at about 53 per cent of actual tax yield and 33 per cent of the potential tax yield inclusive of the underground economy's gross domestic product (GDP). Assessment of the determinants of trade revenue suggests that the yield of trade tax has improved due to liberalization; however, the marginal benefit of tax evasion is still considerable. The findings imply that a committed tax reform is crucial for augmenting tax revenue yield as well as for fiscal consolidation and macroeconomic stability.     

The Impacts of Economic Freedom and Institutional Quality on Migration from African Countries

The previous empirical literature suggests that socio-economic conditions and demographic pressures are triggering factors of migration from Africa. We propose that economic freedom and institutional quality indicators of African countries are also important determinants of out-migration from Africa. Hence, we investigate the effect of economic freedom and institutional quality on migration flow from 44 African countries to major migration destination countries. Aggregate indicators are derived for the quality of institutions and economic freedom using principal component analysis. Controlling for source and destination countries' income levels, population size, cultural, historical and physical distance, our findings provide evidence that migration flow from Africa is significantly determined by the institutional quality and economic freedom indicators in African countries. Our results are strongly robust to different econometric techniques used to control for sample selection bias, zero-valued observations and endogeneity concern. Hence, improving institutional quality and maintaining economic freedom in African countries matters significantly to control out-migration from Africa.     

数字普惠金融、绿色技术创新与乡村振兴

选取2011-2021年中国31个省份的面板数据,运用中介效应模型和空间杜宾模型探讨数字普惠金融在推动乡村振兴中的传导机制和影响效应。研究表明,数字普惠金融在推动我国乡村振兴方面起到明显的促进效果,并存在显著的区域异质性;数字普惠金融不仅对本省份乡村振兴的发展起到正向作用,同时也会对周围地区产生正向的空间溢出效应;绿色技术创新是数字普惠金融提升乡村振兴水平的重要传导路径。     

The Growth Effects of the Bulging Economically Active Population in Sub‐Saharan Africa: Do Institutions Matter?

This paper examines the importance of good institutions in harnessing the growth effects of the bulging economically active population in sub‐Saharan Africa (SSA). The paper utilizes a panel dataset comprising 39 countries over the period 2002–13. Based on the system generalized method of moments estimator, this paper finds that an increase in the relative size of the working‐age population has no direct significant impact on growth, except through the presence of strong and high‐quality institutions. The paper also finds that control of corruption, rule of law and political stability are the specific aspects of institutions that matter the most in reaping the dividend. These results do not only highlight the primacy of strong institutions but also shed light on the key institutional pillars that need to be strengthened to rake in the positive effects of an increasing working age population on economic growth in SSA.     

US and China aid to Africa: Impact on the donor-recipient trade relations

This paper investigates the impact of the US and China's foreign aids to Africa on trade flows between donor and recipient countries. Evidence from the gravity model estimates reveals that the two donors' exports are strengthened by their aids to African partners. Interestingly, China's aid shows a positive effect on its total volume of trade and imports from Africa, while the aid from the US exhibits little impact on the US-Africa total trade and its imports from Africa. A possible explanation for such a difference could be due to the dissimilar national interests of donors in Africa. This study finally suggests that African countries should accelerate the pace of advancing domestic economies and rely less on foreign assistance, in order to establish a fairer and more equal international economic order.