Home

>

Reigniting economic growth: Lessons from three centuries of data

We estimate that since 1701, South Africa has experienced 163 years of per capita growth of more than 1 per cent a year. These expansions include 55 years of sustained per capita GDP growth of more than 3 per cent a year – windfall periods that were related to the discovery of diamonds and gold, global commodity price booms and inclusion into the global economy following the end of Apartheid. These windfalls and expansions are associated with a combination of favourable global conditions and improvements in domestic policy. Empirically, the policies that matter appear to be increased levels of education, infrastructure investment, the extension of civil rights, property rights and financial liberalisation. Windfalls are, however, also associated with significant increases in inequality. Since Union in 1910, average per capita GDP growth has been about 1.1 per cent; and since 1994 (despite the recent contraction) it has been about 1.7 per cent. Over the same period, the population growth rate has slowed to about 1.5 per cent a year, and with falling fertility, this rate is expected to fall slowly to closer to 1.2 per cent over the next decade. This means that maintaining the post-apartheid GDP growth rate would require real GDP growth of about 3.4 per cent. Based on the historical experience, and with the right policy mix, this can be achieved.

 

Working paper 854
1 February 2021
SHARE THIS Working Paper PUBLICATION:

Related South Africa’s Cities and Growth Spatial Challenges and Policy Interventions Content

Request for Proposals: The role of cities as drivers of growth and employment
Background Urbanization in South Africa is expected to reach 80% by...
Call for Work
South Africa’s future will be decided in our cities
Discussion Document 14 South Africa’s cities face multiple, overlap...
Dieter von Fintel, Justin Visagie, Ivan Turok, Takwanisa Machemedze, Claus Rabe, Sebastian Galiani, Edward Glaeser
Discussion Document
Monitoring South Africa’s metropolitan economies: A survey of the data landscape
Discussion Document 13 Disparities in data across different metropo...
Dieter von Fintel
Discussion Document
Cities, productivity and Jobs in SA: Problems and potential
Discussion Document 12 Cities contribute to national prosperity bec...
Ivan Turok, Justin Visagie
Discussion Document
Place-based economic policies: international lessons for South Africa
Discussion Document 11 Place-based policies are designed to support...
Harris Selod, Claus Rabe
Discussion Document
What luminosity data can and cannot reveal about South Africa’s urban economies
Discussion Document 10 As novel types of data are becoming availabl...
Takwanisa Machemedze
Discussion Document
Crime: A policy-oriented survey
Discussion Document 9 South Africa has a reputation for having high...
Sebastian Galiani
Discussion Document
Virtual CDE Workshop on SA Cities and Growth
Urban economics has provided powerful insights into how the charact...
Workshop