Part 3: The role of fiscal policy in the post-Corona economic recovery

28 August 2020
Event type: Dialogue
JEL Code: E52, E58, E62, E63, F34, H12, H20, H50, H53, H63, H68, O12, O19, O23
Event date: 2 September 2020

South Africa has a comparably large government sector, and the choices made about revenue, expenditure, the deficit and how money is spent will play a defining role in shaping how incomes and employment will grow. These fiscal-macro issues collide with micro-level issues such as implementation capacity, failing economic regulation, corruption, high costs of economic activity, and 13 years of load-shedding. All of this gets “baked” in a deeply political environment, where “winners” and “losers” trade behind often closed doors; and costs and benefits are often differently and opaquely defined. Key questions that will shape the session discussion include:

  • Is it a demand problem or a supply problem? Does it matter?
  • Why have large deficits and rising spending (real and as percent of GDP) not generated economic growth?
  • How should we balance consolidation against stimulus?
  • With so many opportunities for positive reform and so many decent contributions to what needs to be done, why is nothing happening?