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The Developmental State: What does it mean for South Africa?
Posted: June 13, 2017
Stephanie CraigWithin the realm of governance and growth studies, there are various theories regarding the role of the state in promoting economic growth and supporting development. One particular theory, which is increasingly popular in South Africa, is the so-called ‘developmental state.’ Originating from a description of the South East Asian growth experience, this term generally refers to a country that is committed to using state institutions to drive economic development or bolster the social welfare of their citizens.
Read ArticleElectricity efficiency in South Africa and the dangers of nominal data
Posted: May 29, 2017
Brent CloeteAs a follow-up to an earlier blog that considered the energy efficiency performance of the South African economy from 2000 to 2012, this blog looks at the electricity intensity of the economy from 1995 to 2015. The data not only tells an interesting story, but also highlights the dangers when using nominal data to consider the relationship between variables. Read Article
Taxes and democracy
Posted: May 29, 2017
Sarah TruenWhile the annual admin of filing tax returns is deadly dull, the theory of taxation itself has some interesting side avenues. Its worth exploring these, given the current policy debate around radical economic transformation, and the appealing simplicity of the arguments that we should tax the rich more to transfer wealth to the poor. International and local experience suggests that it is unlikely to be that simple.
When inclusive bank lending becomes harmful to consumers…
Posted: May 29, 2017
Ronald RateiwaWell-functioning financial systems support the functioning of all components of the economy, by facilitating transactions and the flow of resources between deficit and surplus economic units (Mishkin, 2007). A key asset of the South African economy is its well-developed financial systems. However, the regulation of such systems is a complex task, and regulatory failures in financial systems pose large risks for the wider economy. Given these concerns, it is interesting to examine some of the characteristics of the South African financial system, especially as regards consumer indebtedness.
Read ArticleWhat is fair SACU customs compensation to the BLNS?
Posted: May 15, 2017
Yash RamkolowanThere has been slow progress in SACU negotiations, with possible changes to the revenue sharing formula a sticking point. In this context, the "fairness” of the current formula used to distribute SACU’s customs collections is examined. The brief, high level, analysis suggests that the compensation the BLNS receive for loss of tariff policy independence is much larger than what could be considered "fair”. Acceding to this argument may be in the BLNS’ best interest if they wish to have greater influence in SACU’s trade and industrial policy in future.
Read ArticleHigher education: Getting our priorities right
Posted: November 09, 2016
Dawid-Willem PienaarA worrying narrative that has emerged from the on-going student protests is that you are either in favour of free higher education for all; or against it. In fact there are a wide range of options in between available, and these options should be weighed against the country’s other priorities. We look at some of the most important government policy objectives within post-school education, and highlight the tremendous financial costs associated with meeting these goals. Against this background, it is clear that what is required is a transparent discussion of the way forward within post-school education. While fee free education for all is a noble goal when viewed in isolation, implementing it is likely to severely constrain the country’s ability to achieve many other important objectives. Attempting to achieve free higher education for all before it has been achieved for the poor and the lower middle class, and before some of the severe financial and other challenges in vocational training system have been addressed; risks undermining the country’s educational and economic progress and even denying education and training opportunities to those who might need them the most.Read Article
Bringing life to old mines through clean energy
Posted: November 08, 2016
Nolwazi SokhuluMine closures can be associated with a number of environmental and socio-economic impacts: pollution, adverse effect on human health and loss of jobs. Often mining rehabilitation is viewed as a burden by mining companies. The growing evidence of the development of renewable energy on old mining sites highlights an opportunity to re-use such spaces for positive impact. Deploying renewable energy on old sites can generate revenues, produce clean energy and create greener jobs for local communities. There are a number of international examples of successful projects developed at old mines, and South African has an abundance of old mines that could thus potentially be put to good use once again.Read Article
Preparing for the Continental Free Trade Area negotiations – what can we learn from economics?
Posted: November 08, 2016
Motshidisi MokoenaIn our work on trade and regional integration, DNA Economics regularly meets with trade negotiators and other interested parties. Based on these discussions, our overall sense is that progress towards the CFTA has been slow, and most countries remain unprepared for the up-coming negotiation process. This bodes badly for the likely outcome of the CFTA negotiations. What more can regional trade negotiators do to prepare for these engagements and contribute towards a positive and meaningful agreement? And what lessons can we draw from our study of economics which may assist countries in these negotiations.
Read ArticleBITCOIN: DIGITAL INSULATION FROM SOVEREIGN RISK?
Posted: November 03, 2016
Alex Constantinou & Linton ReddyIt can be argued that Bitcoin has the potential to safeguard the value of your savings, depending on the relative state of each currency. The digital asset has been maturing for almost a decade and our analysis demonstrates that it appears to act as a safe haven in the face of adverse macroeconomic conditions, thus far.
Read ArticleDiscounting Climate Change: When Discount Rates Fail Public Policy
Posted: October 18, 2016
Alex ChildOne of the central difficulties in
attempting to avoid climate change is the long-term and multi-generational
nature of the problem. The current
generation is required to incur large investment costs today which will most
likely only yield benefits for future generations. There is thus a tension
between current and future interests. This presents a problem to decision
makers as Cost-Benefit Analyses (CBA), used to make investment decisions
between potential alternative mitigation projects, require the stream of future
benefits and costs to be compared at their discounted present values. This necessitates
the use of a discount rate, the choice of which has a significant impact on the
kinds of projects that will seem justifiable to the current generation and thus
what kind of world future generations inherit.
