H54

National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock

Public Infrastructure Provision and Ethnic Favouritism: Evidence from South Africa

Does ethnic favouritism in administrative governments affect public infrastructure provision? While previous literature has studied the effects of ethnic favouritism on economic growth and development determinants, there has been limited empirical evidence on ethnic favouritism in public infrastructure provision, particularly in South Africa. We study the effects of ethnic favouritism on provision of water and electricity infrastructure.

The Origin of Extractive States in Africa: The Case of the British Cape Colony, 1834-1909

The majority of African states continue to be regarded as extractive states. We use the Cape Colony's public expenditure to account for the emergence of extractive states in Africa. With a sub-imperial role for Southern African colonial expansion, the Cape Colony became a template for extractive practices that continue to characterize the region. Using public expenditure data, budget debates and existing historiography, we trace the elite competition for limited public resources that associated the Cape's transition from an agrarian society to a mining-led economy.

Does Infrastructure Really Explain Economic Growth in Sub-Saharan Africa?

In the light of Africa’s palpable deficit in public infrastructure, we use System GMM to estimate a model of economic growth augmented by an infrastructure variable, for a panel of 45 Sub-Saharan African countries, over the period 2000-2011. We find that it is the spending on infrastructure and increments in the access to infrastructure that influence economic growth and development in Sub-Saharan Africa.

The Experience of Private Investment in the South African Water Sector: The Mbombela Concession

South Africa is a water-stressed country that over a protracted period has suffered from poor water service delivery. The major problems are inefficient operations, lack of capacity in spending allocated budgets, unclear management structures, and a long term decline in capital expenditure. Economists have long argued that private investment will bring good fiscal control and efficient structures and improve service delivery. However, there may be trade-offs between this improved economic efficiency and the necessity to pursue more egalitarian social outcomes.

Forecasting Investment Needs in South Africa’s Electricity and Telecom Sectors

The paper uses a 52-country panel-data for the period 1980-2002 to estimate demand for electricity and telecom services and, based on these estimates, project investment needs in South Africa through 2010 for two growth scenarios. Projections of average annual investment needs in electricity and telecom for the current growth scenario (3.6% per annum) are of the order of 0.2% and 0.75% of GDP, respectively. An alternative, accelerated growth scenario (6% per annum) implies approximate doubling of investment needs in these sectors.

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