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Policy Change and Economic Growth : A Case Study of South Africa

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World Bank (WB)

Abstract: South Africa's growth experience provides an example of how contrasting growth trends long-term decline followed by improved growth pivot around political change, in this case a transition to democracy. In the decade prior to 1994, South Africa experienced the worst period of economic growth since the end of the Second World War, with growth variable and declining. The proximate causes of slowing growth were trade and financial sanctions in opposition to the Apartheid government, political instability and macroeconomic policy decisions that resulted in higher inflation, increased uncertainty, and declining investment. Democracy has proved critical for, among other factors, creating the possibility of a peaceful and more stable future and reversing investor sentiment at a basic level. Political and economic leadership have been essential for improving the country's growth performance because of the effect on policy formulation, institutional development, regulatory design, and economic vision. Prudent fiscal policy and sound macroeconomic management have been critical factors in creating an environment conducive to growth by stabilizing economic conditions, lowering the user cost of capital, and putting downward pressure on the real exchange rate. This case study provides some insight into a more general perspective on political and economic transition and some of the key macro- and microeconomic policy shifts that need to occur to realize a more rapid and sustained growth path.
Type: Working Paper
Publications & Research :: Working Paper
Publications & Research
Link: http://hdl.handle.net/10986/28012
Subject: ACCOUNTING
AGRICULTURE
ASSET VALUES
BALANCE SHEET
BANK LENDING
BARRIERS TO ENTRY
BINDING CONSTRAINT
BOND INDEX
BORROWING COST
BUDGET DEFICIT
BUDGET DEFICITS
BUSINESS CYCLE
CAPITAL FLOWS
CAPITAL INFLOWS
CAPITAL MARKETS
CAPITAL STOCK
COMMODITY PRICES
COMPARATIVE ADVANTAGE
COMPETITIVENESS
CONSUMER PRICE INDEX
CONSUMERS
CORPORATE SAVING
COUNTRY RISK
CREDIBILITY
CURRENCY
CURRENT ACCOUNT DEFICIT
DEBT
DEBT LEVELS
DEBT SERVICE
DEPENDENCY RATIOS
DEVELOPING COUNTRIES
DISEQUILIBRIUM
DISINFLATION
DISTRIBUTIONAL EFFECTS
DOMESTIC MARKET
DOWNWARD PRESSURE
ECONOMIC CONDITIONS
ECONOMIC DEVELOPMENT
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC HISTORY
ECONOMIC OUTCOMES
ECONOMIC PERFORMANCE
ECONOMIC POLICIES
ECONOMIC RESEARCH
ECONOMIC SECTORS
ECONOMIC SYSTEMS
ECONOMIES OF SCALE
ELASTICITY
EMERGING MARKET
EMERGING MARKET BOND
EMERGING MARKET ECONOMIES
EMERGING MARKETS
ENABLING ENVIRONMENT
EXCESS DEMAND
EXCESS SUPPLY
EXCHANGE CONTROLS
EXCHANGE RATES
EXPECTED RETURN
EXPENDITURE
EXPORT GROWTH
EXPORT PERFORMANCE
EXPORTERS
EXPORTS
FACTOR MARKETS
FINANCIAL CRISES
FINANCIAL CRISIS
FINANCIAL LIBERALIZATION
FINANCIAL SYSTEM
FISCAL DEFICIT
FISCAL DISCIPLINE
FISCAL POLICIES
FISCAL POLICY
FIXED CAPITAL
FIXED INVESTMENT
FOREIGN CAPITAL
FOREIGN CURRENCY
FOREIGN DIRECT INVESTMENT
FOREIGN EXCHANGE
FOREIGN EXCHANGE RESERVES
GDP
GDP PER CAPITA
GLOBALIZATION
GOLD
GOVERNMENT INVESTMENT
GOVERNMENT SAVING
GOVERNMENT SPENDING
GROSS FIXED CAPITAL FORMATION
GROWTH PERFORMANCE
GROWTH POTENTIAL
GROWTH RATE
GROWTH RATES
HIGH INFLATION
HOUSEHOLD INCOME
HOUSEHOLD SAVING
HOUSEHOLD WEALTH
HUMAN RESOURCES
IMPORT
IMPORTS
INCOME
INCOME GROWTH
INCOME LEVELS
INEFFICIENCY
INFLATION
INFLATION TARGETING
INFORMATION ASYMMETRIES
INFRASTRUCTURE INVESTMENT
INFRASTRUCTURE INVESTMENTS
INSTITUTIONAL DEVELOPMENT
INTEREST RATE
INTEREST RATES
INTERNATIONAL BANK
INTERNATIONAL DEVELOPMENT
INTERNATIONAL FINANCE
INTERNATIONAL FINANCIAL CRISES
INTERNATIONAL FINANCIAL MARKETS
INTERNATIONAL FINANCIAL STATISTICS
INVESTMENT DECISIONS
INVESTMENT LEVELS
INVESTMENT PROJECTS
INVESTMENT RATES
INVESTMENT SPENDING
LABOR MARKET
LABOR MARKETS
LAND REFORM
LEVEL OF INFLATION
LEVEL OF INTEREST RATES
LOW INTEREST RATES
LOW TARIFFS
MACROECONOMIC MANAGEMENT
MACROECONOMIC POLICY
MACROECONOMIC STABILITY
MACROECONOMIC VARIABLES
MARGINAL PRODUCT
MARKET CAPITALIZATION
MARKET CONCENTRATION
MARKET DEVELOPMENT
MARKET ECONOMY
MARKET STRUCTURE
MARKET STRUCTURES
MONETARY POLICY
MONETARY POLICY FRAMEWORK
MONOPOLIES
MORTGAGE
MORTGAGE INTEREST
NATIONAL TREASURY
NATURAL RESOURCES
NOMINAL EXCHANGE RATE
NOMINAL WAGE
POLICY RESPONSE
POLITICAL ECONOMY
POLITICAL INSTABILITY
POLITICAL STABILITY
POLITICAL UNCERTAINTY
POTENTIAL OUTPUT
POVERTY REDUCTION
PRICE INCREASES
PRIVATE INVESTMENT
PRODUCT MARKETS
PRODUCTION INCREASES
PRODUCTIVITY
PRODUCTIVITY GROWTH
PROPERTY RIGHTS
PUBLIC FINANCES
PUBLIC INVESTMENT
PUBLIC SPENDING
PURCHASING POWER
RAPID GROWTH
RATE OF RETURN
RATES OF INFLATION
RATES OF INTEREST
REAL CONSUMPTION
REAL COST
REAL EXCHANGE RATE
REAL EXCHANGE RATE APPRECIATION
REAL EXCHANGE RATES
REAL GDP
REAL GROSS DOMESTIC PRODUCT
REAL INCOME
REAL INTEREST
REAL INTEREST RATES
REPAYMENTS
RESERVE
RESERVE BANK
RESERVES
SAVINGS
SHARE OF INVESTMENT
STOCK EXCHANGE
STRUCTURAL CHANGE
STRUCTURAL PROBLEMS
SURPLUS
TARIFF BARRIERS
TAX
TAX COLLECTION
TAX INCENTIVES
TAX RATES
TELECOMMUNICATIONS
TIME HORIZON
TOTAL FACTOR PRODUCTIVITY
TRADE BARRIERS
TRADE LIBERALIZATION
TRADE POLICY
TRADE SECTOR
TRADE UNIONS
TRADING
TRADING PARTNERS
UNEMPLOYMENT
URUGUAY ROUND
VALUE ADDED
WAGES
WEALTH
WORLD ECONOMY
WORLD TRADE ORGANIZATION
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