Economics and Finance

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Acting out the myths : the power of narrative discourse in shaping the Zimbabwe Conflict of Matabeleland, 1980-1987.
(2009) Stauffer, Carl Swarr.; Harris, Geoffrey Thomas.
This thesis interrogates the Matabeleland disturbances of 1980-1987 by analysing the conflict narratives promulgated by the ZANU-PF and how these narratives directly impacted the socio-political construction of violence that was enacted during that period. Of critical relevance is the interplay between the revolutionary narratives manufactured and imposed by the ZANU-PF regime and the myriad of contrasting, yet subjugated counter-narratives that were formulated as alternative resistances by the recipient communities. Through in-depth interview and document analysis methodologies, this research deconstructs the generative nature of scripted violence through the exploration of five salient themes employed by the ZANU-PF to produce its political meta-narrative: Ethnicity, Nationalism, Loyalty, Legitimacy and Unity. This study explores the power and function of narrative discourse in the formulation of ethnic identities, nation-state ordering, historical exclusion, political discipline, and social uniformity. The premise of this dissertation suggests that durable peace in Zimbabwe will only be realised to the degree that the silenced victims of the Matabeleland massacres are afforded a public voice and a sustained recognition in the historic, collective memory of that nation.
Adaptive market hypothesis and calendar anomalies in selected African stock markets.
(2019) Obalade, Adefemi Alamu.; Muzindutsi, Paul-Francois.
It takes a theory to beat a theory. However, whether the adaptive market hypothesis (AMH) offers better explanations for stock return behaviour than the popular efficient market hypothesis (EMH) still remains a question for serious empirical investigation. This question informed the analyses of efficiency and calendar anomalies in the selected African stock market, namely the Nigerian Stock Exchange (NGSE), the Johannesburg Stock Exchange (JSE), the Stock Exchange of Mauritians (SEM), the Casablancan Stock Exchange (MOSE) and the Tunisian Stock Exchange (TSE) with the sample period spanning from January 1998 to February 2018. The first objective of this study is to investigate whether market efficiency changes in cyclical version over time, according to the AMH. The second objective is to evaluate the effect of market conditions (up, down, bull, bear, normal) on return predictability. The third objective is to analyse whether calendar anomalies disappear and reappear over time. The fourth objective is to determine how the anomalies behave under different bull and bear market conditions. Various linear testing tools such as the variance ratio test, the autocorrelation test, the unit root tests and the nonlinear of BDS were implemented in rolling window approach to track time-variation in efficiency. A dummy regression model was used to evaluate the market condition effect on return predictability. This study also explored rolling window analyses of several alternative variants of nonlinear models of the GARCH family, to track variation in the behaviour of days-of-the-week (DOW), months-of-the-year (MOY) and intra-month effects. Lastly, the study modelled the switching behaviour of the calendar anomalies under bull and bear conditions by using the Markov switching model (MSM), which is able to generate regime-specific regression results for the calendar anomalies under consideration. Findings from the various linear and nonlinear tests revealed that there are cycles of significant linear and nonlinear dependence and independence in each of the five markets, suggesting bouts of predictability and unpredictability. The regression analyses of return predictability against series of market condition dummies revealed that highIt takes a theory to beat a theory. However, whether the adaptive market hypothesis (AMH) offers better explanations for stock return behaviour than the popular efficient market hypothesis (EMH) still remains a question for serious empirical investigation. This question informed the analyses of efficiency and calendar anomalies in the selected African stock market, namely the Nigerian Stock Exchange (NGSE), the Johannesburg Stock Exchange (JSE), the Stock Exchange of Mauritians (SEM), the Casablancan Stock Exchange (MOSE) and the Tunisian Stock Exchange (TSE) with the sample period spanning from January 1998 to February 2018. The first objective of this study is to investigate whether market efficiency changes in cyclical version over time, according to the AMH. The second objective is to evaluate the effect of market conditions (up, down, bull, bear, normal) on return predictability. The third objective is to analyse whether calendar anomalies disappear and reappear over time. The fourth objective is to determine how the anomalies behave under different bull and bear market conditions. Various linear testing tools such as the variance ratio test, the autocorrelation test, the unit root tests and the nonlinear of BDS were implemented in rolling window approach to track time-variation in efficiency. A dummy regression model was used to evaluate the market condition effect on return predictability. This study also explored rolling window analyses of several alternative variants of nonlinear models of the GARCH family, to track variation in the behaviour of days-of-the-week (DOW), months-of-the-year (MOY) and intra-month effects. Lastly, the study modelled the switching behaviour of the calendar anomalies under bull and bear conditions by using the Markov switching model (MSM), which is able to generate regime-specific regression results for the calendar anomalies under consideration. Findings from the various linear and nonlinear tests revealed that there are cycles of significant linear and nonlinear dependence and independence in each of the five markets, suggesting bouts of predictability and unpredictability. The regression analyses of return predictability against series of market condition dummies revealed that high predictability is associated with the bull, volatility and financial crisis periods, especially in NGSE, SEM and TSE and not in others. It suggests that the effect of market condition cannot be generalised for all markets. Further, rolling GARCH estimations showed that calendar anomalies disappear and reappear over time in line with the AMH. The evaluation of calendar anomaly under AMH provides a clearer picture of the behaviour of African stock markets as adaptive. Finally, the empirical results revealed that regime-switching is an important feature of calendar anomalies and that a calendar anomaly that is found in a bull regime tends to disappear or weaken in a bear regime and vice versa, depending on the market and the calendar anomaly in question. This study adds to the extant literature on the AMH in Africa and global markets. First, it shows that African stock markets are adaptive. Thus, it is more appropriate to describe African markets as adaptive markets rather than inefficient markets. Secondly, it provides empirical evidence of efficiency cum market condition in African stock markets. Thirdly, the study represents a timely contribution on calendar anomalies under AMH in African stock market. Fourthly, by evaluating DOW, MOY and HOM effects under AMH, this study extends the existing works on Monday and January effects in developed markets. Additionally, this study shows the usefulness of MSM in evaluating calendar anomalies under AMH.
Agricultural cooperatives as strategy for rural development in Rwanda: a case study of COVEPAR.
(2005) Uwantege, Emma-Carine.; Tenza, Themba.
When agricultural cooperatives are very well organized and implemented with sufficient means and committed people, then they can help to achieve rural development. COVEPAR- Cooperative for Valorization and Exportation of Rwandan Agricultural Products- created by local people of Butare Province in October 2001, aimed to participate in the process of poverty reduction in rural areas by increasing the value and exportation of Rwandan products. The main hypothesis of the research was that COVEPAR allows for diversification of individual farmers' income and increases markets for the members. This study was undertaken in order to see the contribution of COVEPAR in achieving solutions for problems of agriculture in general and farmers in particular. Particularly, the focus was on its contribution in poverty reduction in Butare Province. The results of this research showed that in two years of activities (having started its activities in April 2003) COVEPAR has managed to introduce a new cash crop (chilli pepper) in Rwanda in general and in Butare in particular. Also, farmers who used to sell their production at local markets are now selling at international markets through COVEPAR. However, they are still complaining about the price at which COVEPAR buys their production. Cassava, an old food crop in Rwanda, is also one of the two products that COVEPAR is interested in. The experience of COVEPAR showed that it is also revenue generating at international market (European market). This is real when cassava is transformed into good quality cassava flour or starch. The research also showed that COVEPAR participates in agriculture intensification. It is the second source of modem inputs for its members not taking into consideration household residues. It also sensitises its members to use modem inputs and agricultural techniques through PEARL Project agronomists, one of its main supporter projects. About the addition of value, COVEPAR processed cassava roots into cassava flour and obtained 12 tons that in turn were sold on the European market. However, this cassava had not come from associations. COVEPAR had bought it at short notice from any producer who was selling, because it was an urgent situation of exploring the European market's response to their product. Fortunately, the European buyers approved the product and guaranteed the market. At present, COVEPAR is constructing a modern transformation unit that will help to obtain good quality cassava flour, ready for export, in Butare Province. It is also in the stage of sensitising its members to cultivate improved seedlings of cassava in order to obtain high production. So, as the market is already identified, the additional value process will continue. In future production the focus will be mainly on cassava roots obtained from its members. For chilli pepper, COVEPAR sells a non-finished product. The chilli pepper is only put it into packages after it is thoroughly dried and sorted. However, members of the chilli pepper associations have improved their lives more than that of the cassava associations. Apart from buying food and clothes like cassava associations, they have also covered other important needs like buying livestock, bicycles, new farms, new house, etc. COVEPAR has also contributed to job creation in Butare Province. Although the achievements have been many in the relatively short period of two years, COVEPAR is also facing many problems. It is inadequately organized with some very important institutions such as general assembly, board of management and auditors still being absent from its managerial structure. Also, it has lack of financial capital that puts it in the unfortunate situation of bringing about misunderstanding with members because of delays in payments. The other problems are poor communication and collaboration with members. In addition, COVEPAR works with a lot of associations that are more than its financial and technical means can afford. Therefore, if these shortcomings are not corrected as soon as possible, COVEPAR objectives will not be reached and it will inevitably share the same fate as other cooperatives that have existed and failed in Rwanda.
An analysis of alternate consumption hypotheses in South Africa.
(1996) Govinden, Marylla G.; Contogiannis, Eleftherios.
The first half of this research is an attempt to provide a solid theoretical foundation of the various theories of the consumption function and the empirical evidence. Both the theoretical foundation and the empirical evidence is wide-ranging, spanning a period of over fifty years, with a discussion on the early Keynesian consumption function through to the influence of the rational expectations approach to economic modelling. The emphasis is both on the macro as well as micro aspects of the consumption function. The second half of this research considers the nature of the consumption function in South Africa. This is done with the application of time-series data to three particular models that could provide some insight, and answer certain broad questions about the behaviour of consumption in South Africa. More specifically this is achieved through disaggregation by considering demand functions for specific items of consumption.
An analysis of bank competition and financial stability: evidence from the South African banking sector.
(2021) Vilakazi, Mzamo Perceviere.; Muzindutsi, Paul-Francois.; Meyiwa, Ayanda.
There is a crucial role that the banking in terms of play and serve as central to the economy. Thus, competition is vital to the banking industry. However, while competition is perceived to be vital to the banking industry, it is claimed to have both positive and negative implications on the financial stability of banks. This study investigated the link between bank competition and financial stability in South Africa. The study utilized panel regression to examine the associations between different measures of bank competition and financial stability for the major five banks over the sample period spinning from 2009 to 2019. This study employed three different models namely, the Boone indicator, Lerner index, and fluctuating H-statistics to test for bank competition theories. The study further investigated the level of competition in the South African banking sector by unpacking the concept of concentration in the South African banking sector, using Concentration Ratios (CR) and Herfindahl-Hirschman Index (HHI). The study used the Z-score and profitability as dependent variables to proxy for financial stability in the banking sector. The economic activity and the bank size were used as the control variables in the competition and stability models to account for any uncounted variables. The findings indicated that less competition in the banking market causes banks to engage in risky activities, face regulatory intervention, or, worse, fail, consistent with the competition stability hypothesis. Furthermore, more competition and access to related financial services can be applauded to produce a competing environment in the South African banking services industry. Overall, this study concluded by supporting that more competition enhances financial stability.
An analysis of export support measures with special reference to South Africa, and the impact of the general export incentive scheme.
(1996) Gouws, Andre.; Holden, Merle Gwendoline.
South Africa, in common with many other developing countries, embarked on an import substitution policy to promote development and industrialisation. Although initially successful, it was recognised in the late 1960s that the scope for further import substitution was limited and that alternative development strategies should be embarked upon. Unfortunately, the years of import substitution resulted in high levels of protection and consequently an anti-export bias. In 1972, under the leadership of Dr Reynders, a commission found that South Africa should embark upon a policy of export promotion. In 1980 a new form of export incentive was introduced, viz. Category A and B. Category A incentives were aimed at neutralising the effects of import substitution and compensated exporters fifty per cent of the duty payable on inputs, regardless of whether the inputs were imported or not. Category B incentives compensated exporters for the consequences of cost increasing on non-intermediate inputs because of the import substitution policy and was calculated on the value added. Exporters also enjoyed various grants and tax breaks to enable them to undertake export marketing. The schemes were unsuccessful and were replace by a General Export Incentive Scheme (GElS) in 1990. The main aim of the GElS was to encourage the export of manufactured products. With the means of an econometric model, the success of GElS is evaluated on a sectoral basis. GElS brought with it rent seeking, corruption, lobbying, and threats of countervailing duties. In addition to the enormous costs, exceeding R6 billion, there were other bureaucratic costs. In general, the GElS was not successful. The sectors that did benefit from receiving GElS benefits were the tobacco industry, footwear, furniture, metal products, and electrical machinery. In most cases, exporters would have exported with or without GElS. GElS was simply a windfall. Policy-makers failed to recognise the dynamics of exporting. GElS contributed neither to additional exports, export capacity nor to a sustained competitive advantage. import substitution policy to promote development and industrialisation. Although initially successful, it was recognised in the late 1960s that the scope for further import substitution was limited and that alternative development strategies should be embarked upon. Unfortunately, the years of import substitution resulted in high levels of protection and consequently an anti-export bias. In 1972, under the leadership of Dr Reynders, a commission found that South Africa should embark upon a policy of export promotion. In 1980 a new form of export incentive was introduced, viz. Category A and B. Category A incentives were aim.ed at neutralising the effects of import substitution and compensated exporters fifty per cent of the duty payable on inputs, regardless of whether the inputs were imported or not. Category B incentives compensated exporters for the consequences of cost increasing on non-intermediate inputs because of the import substitution policy and was calculated on the value added. Exporters also enjoyed various grants and tax breaks to enable them to undertake export marketing. The schemes were unsuccessful and were replace by a General Export Incentive Scheme (GElS) in 1990. The main aim of the GElS was to encourage the export of manufactured products. With the means of an econometric model, the success of GElS is evaluated on a sectoral basis. GElS brought with it rent seeking, corruption, lobbying, and threats of countervailing duties. In addition to the enormous costs, exceeding R6 billion, there were other bureaucratic costs. In general, the GElS was not successful. The sectors that did benefit from receiving GElS benefits were the tobacco industry, footwear, furniture, metal products, and electrical machinery. In most cases, exporters would have exported with or without GElS. GElS was simply a windfall. Policy-makers failed to recognise the dynamics of exporting. GElS contributed neither to additional exports, export capacity nor to a sustained competitive advantage.
An analysis of household and government spending on education in South Africa.
(2021) Sejake, Alice Tlalane.; Muller, Colette Lynn.
Education is one of the largest components of government spending across developing and developed countries. Differences in spending on education are often cited as the key contributors to achievement gaps between countries and individuals in the same country. In South Africa, education has been central to government’s socio-economic redistributive policies following the end of apartheid. The problem of insufficient funding particularly for higher education combined with a high demand for education have led to shared costs between households and government. To this effect, the study analyses the relative roles of spending across schooling levels between households and the government. The study further examines attendance and expenditure pattens on education between private and public institutions. Using household level data from the South African Living Conditions Survey 2014/2015, Tobit regressions using a number of household characteristics (such as the gender of the household head, their employment status, population group, level of education, the number of children attending and settlement type of the household) are estimated to examine if and to what degree the determinants of educational expenditure differ by income groups. In addition, income elasticities of education spending are calculated to determine the sensitivity of household’s spending to changes in income. The results show that spending of richer households on education is likely to be more sensitive to changes in household income than poorer households.
An analysis of money demand stability in Rwanda.
(2005) Sayinzoga, Aussi.; Simson, Richard Andrew.
A stable money demand function and exogeneity of prices is at the core of planning and implementing a monetary policy of monetary targets. This thesis examines both the stability of M2 money demand and price exogeneity in Rwanda for the years 1980 to 2000. We estimate and test the elasticities of the determinants of Rwandan money demand function. We include in this demand function those variables which economic theory indicates must be part of any empirical investigation of money demand. All coefficients had the signs as required by economic theory. We estimate the money demand function for Rwanda using cointegration analysis and an error correction mechanism. The results show real income, prices and M2 to be cointegrated. We employ three tests to show that the estimated demand function for Rwanda is stable. We then test the second requirement for coherence in monetary aggregate targeting that money determines prices. The results show that prices are exogenous to money. But before we can definitely conclude that an inflation targeting regime is feasible from monetary policy perspective, we point out that future research on this important topic must account for exchange rate movements, measure permanent income and specify interest rate changes correctly.
An analysis of real exchange rate disequilibrium in developing countries, with an empirical focus on South Africa.
(1999) Tembo, George.; Mainardi, Stefano.
Since the early 1970s, exchange rate fluctuations have characterised the behaviour of the external value of many currencies in both high- and low-income countries. Up-and-down movements in real exchange rates have been observed under fixed as well as flexible arrangements. This is in spite of the fact that many less developing countries (until the 1980s), unlike the major industrialised countries, opted to retain relatively rigid exchange rate systems after the collapse of the Bretton Woods system. Exchange rate volatility has been a subject of much concern in government, business and academic circles because it has been associated with negative effects on the performance of developing economies. Consequences of these large swings in exchange rates have included uncertainty and delays in business decisions, resource misallocation, interest rate volatility and real exchange rate misalignments. For the period, from 1970 to 1996, this study investigates the phenomenon of real exchange rate disequilibrium in developing countries, with an empirical and econometric examination of South African data. Using the ordinary least squares and the EngleGranger cointegration techniques, this investigation found that government consumption of nontradables, the price of gold in rand, the overall terms of trade and the rate of depreciation are important determinants of the short-run behaviour of the real effective exchange rate in South Africa. With regard to the long-run the permanent componen1ts ofthe fundamentals - namely, technological or productivity improvement, trade policy, governm1ent consumption of nontradables, disposable income, capital flows, the terms of trade excluding gold and the rand price of gold, were found to be significantly related to the equilibrium conduct of the real effective exchange rate. Instances of real exchange rate misalignment were found in both periods of fixed and flexible exchange rate management.
An analysis of recent global economic development and GDP growth using Stein's Paradox, and South Africa's monetary and fiscal policy response.
(2013) Pillai, Sharvania.; Mahadea, Darma.; Simson, Richard Andrew.
The economic crisis of 2007 has had debilitating effects on the global economy, affecting GDP growth, unemployment and trade to name a few. In response to these economic effects, numerous policy interventions were implemented. There are various existing time-series methods available to determine better estimates of GDP growth rates, one of which is Stein’s Paradox which uses observed averages to estimate unobservable quantities which are closer to the true unknown GDP growth rates or theta (θ) in order to determine better growth rates post the economic crisis. The resulting James-Stein estimator (z) is said to be better than the arithmetic average, and thus a closer approximation to the true GDP growth rates which are unobservable. This dissertation analyses the effects of the 2008 financial crisis on the global economy, with specific reference to South Africa and America, and their corresponding policy interventions to determine the growth trajectory after the crisis. The main objective is to determine if better estimates of GDP growth can be calculated using Stein’s Paradox, across a sample of 30 countries, using quarterly GDP growth for the period 2005 to 2008. Annual GDP data was also used for the period 2009-2011, and future GDP growth rates were forecasted for the period 2012 to 2016. To reinforce the Stein’s Paradox, the Monte Carlo study is undertaken. It is used to determine how the James-Stein estimates perform under different conditions using a common c or unique c, and to determine which condition will provide more accurate GDP growth rates (Muthen. 2002). Analysis of time series data across a sample of 30 countries using Stein’s Paradox provided better estimates of GDP growth rates than the individual average growth rates for each country based on the lower standard deviation and total squared error of estimation achieved. This shows that the results are closer to theta and have a smaller amount of error, particularly when a common c was used. The Monte Carlo results indicate that better GDP growth rates are achieved when using a common c instead of a unique c given that a smaller standard deviation and variance is derived. Therefore the Monte Carlo study aims to reinforce or verify Stein’s Paradox. The study also indicates that emerging and developing countries seem to be the driving forces of growth in the future, while developed countries seem to be lagging behind.
Analysis of sexual and reproductive healthcare utilisation among young people in Zimbabwe.
(2020) Muchabaiwa, Lazarus.; Mbonigaba, Josué.
Despite the development and implementation of an adolescent and youth sexual and reproductive health (ASRH) strategic plan in 2010, Zimbabwe has the third-highest HIV prevalence amongst sexually active teenagers in Southern Africa. The country can potentially suffer future socioeconomic decline due to adverse health outcomes resulting from the current risky sexual and reproductive health behaviour among its youth and adolescents. The attainment of the United Nations’ Sustainable Development Goals (SDGs) may be compromised owing to this predicament. The thesis analysed the utilisation of adolescent and youth sexual and reproductive health services and their outcomes in four essays. The first essay investigated the socioeconomic factors that influence ASRH service utilisation, the resultant outcomes and their distribution. The essay updated existing literature by providing recent evidence on ASRH specific socioeconomic determinants and their equity connotations, which has been lacking since the implementation of the ASRH strategy in 2010. The essay applied the logistic regression and concentration index techniques on the Zimbabwe Demographic Health survey (ZDHS) data. Findings revealed that inequalities favouring advantaged groups widened in STI treatment, HIV testing, STI treatment, as well as in condom and contraceptive use. Progress was made in early childbearing, which declined among the uneducated. Another positive development was the disproportionately higher HIV infection among females, which declined by almost half between 2005 and 2015. The second essay analysed the impact of the government’s ASRH strategy on the utilisation of ASRH services. The essay’s contribution was its quantitative insight into whether a multi-pronged approach or commitment of more resources results in better ASRH outcomes. The difference-in-differences impact evaluation technique was applied to ZDHS data collected in 2010 and 2015. Results indicated that service utilisation for HIV testing and treatment of sexually transmitted infections (STIs) increased. The ASRH strategy also reduced HIV prevalence. These impacts differed by education status and place of residence. Results also showed that provinces that received more resources did not attain better ASRH outcomes, suggesting that future focus should be on the quality of services. The third essay sought to characterise the risk preferences of youth. Its contribution lies in using prospect theory to fit youth risk-taking in the domain of sexual and reproductive health as a departure from the normally assumed expected utility theory. Primary data was collected from university students in Zimbabwe using a socioeconomic questionnaire and pairwise lottery choice tasks based on hypothetical ASRH interventions with uncertain outcomes. Prospect theory parameters were estimated using patterns of the respondents’ choices over the lottery tasks. This is the first study, to the researcher’s best knowledge, that estimates ASRH risk parameters within the prospect theory framework. Bivariate techniques, ordinary least squares and interval regression methods were used to examine socioeconomic differences in risk preferences. Results indicated that the ASRH behaviour of youth fits within prospect theory. Bivariate and multivariate regression analyses showed that income, prior sexual and reproductive health knowledge, and alcoholism were associated with risk and loss aversion. The fourth essay investigated the long-term consequences of ASRH practices from the female youths’ perspective as the hardest hit gender. The essay’s contribution lies in unearthing the magnitude of lifelong effects of failure to utilise ASRH interventions during adolescence, which is missing from Zimbabwean literature. The essay applied propensity score matching and multivariate regression techniques on ZDHS data collected in 2015. Findings revealed that non-utilisation of ASRH services leads to lower educational attainment, lesser chances of career development, poverty, as well as the contracting of STIs and HIV infections. Overall, these findings have several implications. Firstly, health policymaking must consider inclusive ASRH strategies that target currently excluded youths in rural areas, uneducated and poor households, and consider their unique risk preferences. In addition to that, future ASRH strategies should focus on service quality and increased coverage to improve outcomes and attain SDG targets. Secondly, the nature of youths’ risk preferences entails that ASRH awareness campaigns be positively framed to improve uptake of ASRH services. In addition to that, policymakers need to facilitate youth economic emancipation to increase economic prospects, which improves economic reference points that are critical facilitators of risk aversion. Lastly, future ASRH strategies need to have better coordination and monitoring since they involve different implementers. Furthermore, the ASRH strategy needs to be integrated into other sectors' goals that it impacts, such as education and labour.
Analysis of the dynamics of carbon pricing: the role of speculation in the Emissions Trading System (ETS)
(2024) Isah, Kazeem Ovanero.; Adelakun, Ojo Johnson.
Purpose – To align with the global goal of keeping the temperature rise to well below 2 degrees Celsius, a market-based policy initiative, the "Emissions Trading System (ETS)," is to mitigate climate change. However, the carbon allowances traded at the ETS are held and traded not only by polluting companies, but also emissions non-compliance financial firms. These financial firms though engage in speculation, there has not been any compelling evidence of the extent to which speculation matters in carbon pricing. To bridge this gap, this study is premised on three separate but related essays to: (i) determine the accurate framework for modelling the dynamics of carbon pricing; (ii) determine the extent to which speculation matters in the predictability of carbon pricing; and (iii) determine whether speculation undermines or benefits the emission reduction effect of carbon pricing. Methodology –We employ the GARCH-MIDAS econometric technique to test the hypothesis that an all-inclusive framework that reflects the emission compliance and emissions noncompliance dynamics of the ETS is the most accurate approach to modeling carbon prices. We also employ some verifiable econometric procedures to arrive at the Feasible Quasi Generalised Least Square (FQGLS) as the most appropriate estimator to address some of the biases in the predictability of carbon prices. Findings – A modeling framework that captures both emissions compliance and emissions noncompliance dynamics of the ETS is the most accurate to modeling carbon prices. We find that speculation is a good predictor of carbon prices. We find that both emission compliance and emission non-compliance dynamics of the carbon market matter for the emissions reduction effect of the ETS and for enhancing the accuracy of climate change forecasts. Research Contribution – The literature on emission trading has continued to ignore the speculative behavior of the emissions non-compliance firms in the ETS. As a result, we construct a composite news-based speculation index to simultaneously capture the emissions compliance and emissions non-compliance dynamics of the ETS in a single framework. We provide the literature with a data-driven framework upon which the predictive power of speculation is examined both in the predictability of carbon pricing and in the forecast of emission reductions.
An analysis of the extent, nature and consequences of female part-time employment in post apartheid South Africa.
(2009) Muller, Colette Lynn.; Posel, Dorrit Ruth.
International studies of part-time employment have shown that most part-time workers are women, and specifically married women (Rosenfeld and Birkelund 1995; Caputo and Cianni 2001). The ability to work part-time enables women who have household commitments, such as caring for children, to maintain an attachment to the labour force and to preserve job skills while also undertaking household labour (Long and Jones 1981; Rosenfeld and Birkelund 1995). In many countries, therefore, the growth in part-time employment has constituted an important component of the increase in women’s work. However, part-time jobs are often considered to be poorly remunerated, offering little or no security, limited opportunities for career advancement and few (if any) benefits (Rosenfeld and Birkelund 1995; Rodgers 2004; Hirsch 2005; Bardasi and Gornick 2008). Although empirical research on South Africa’s labour markets has expanded significantly over the post-apartheid period, particularly with the introduction of nationally representative household surveys that capture individual employment data, little is known about the characteristics of South African part-time workers, or about the nature of the work these individuals perform. Using data from a selection of South Africa’s nationally representative household surveys, namely the October Household Surveys, the Labour Force Surveys and the Labour Force Survey Panel, this thesis aims to redress this lacuna. The thesis comprises four empirical chapters. The first chapter outlines the definition of part-time employment adopted throughout the study, and it presents gendered trends in part-time employment in South Africa from 1995 to 2006. The descriptive analysis shows that most part-time workers in South Africa are women, and further, that the growth in female part-time employment has been an important part of the feminisation of the labour force in South Africa. The second chapter compares part-time and full-time wage (salaried) employment. The main analytical question addressed in this chapter is whether women are penalised for working part-time. Although hourly wages in part-time employment are, on average, lower than in full-time employment, the study demonstrates that after controlling for differences in observable and unobservable characteristics, women in part-time employment receive a wage premium. The third chapter explores heterogeneity among part-time wage workers, distinguishing between women who choose to work part-time and women who report wanting to work longer hours. Key findings of this chapter are that a wage premium persists for women both in voluntary and in involuntary part-time work; but that involuntary part-time workers have a stronger labour force attachment than voluntary part-time workers. The fourth chapter uses the distinction between part-time and full-time employment to investigate changes in the gender wage gap in employment. The results show that the total gender gap in wages among part-time and full-time workers has fallen over the years, with the greatest reduction visible for those working part-time. The final chapter summarises the main findings of the thesis and it outlines avenues for further research on part-time employment in South Africa.
Analysis of the impact of foreign aid on economic growth in COMESA.
(2020) Gondwe, Grace.; Mbonigaba, Josué.
The Common Market for East and Southern Africa (COMESA) was officially established in 1994. Its primary objective was to help its member states attain sustainable economic growth and development through regional integration and trade. In this regard, the region’s specific goals encompassed: (a) comparable and balanced development of human capital, production and market structures in its respective member countries. (b) harmonization of the individual economic and trade policies among its member countries in line with its collective regional growth and development goals. Among the tools for the realisation of these goals, is a coherent and consistent development financing plan for the essential investments across its sectors. Accordingly, focusing on the region’s core objective of economic growth, this study empirically investigated how foreign aid, as one of the region’s vital development financing resource has influenced economic growth in the respective COMESA countries. Contrary to the existing literature, this thesis adopted a comprehensive approach that encompassed aggregate and sectoral implications of aid receipts in the region without undermining the role of the factors affecting its utilization as mostly discussed in the literature. From the political economy perspective, recent debates on Africa’s inclusive and sustainable growth have focused on structural transformation as a critical priority in transforming its development platform. Based on these debates, the thesis focused on two crucial sectors for comprehensive econometric assessments of direct and indirect effects of sectoral aid on growth. For direct effects of aid on growth, the work chose the agricultural sector, which continues to sustainably support the region’s structural transformation process through the provision of at least 50% of the raw materials to the industrial sector. The agricultural sector also supports livelihoods of at least 60% of the region’s population. For indirect effects, the thesis selected economic infrastructure as a critical enabler of effective backward and forward linkages between the agricultural sector and the industrial/ service sectors. This comprehensive assessment was therefore accomplished firstly by assessing the extent to which the received aid volumes in the respective COMESA countries consistently closed their overall and specific sectoral development financing gaps. Trends analysis of aid and economic growth performance showed that foreign aid is the dominant source of foreign capital, accounting for an average of 60 percent of the development financing gaps annually in COMESA countries. Although better growth performances were expected among aid recipients, erratic growth rates below the 7% minimum stipulated in the Sustainable Development Goals are widespread across the countries. Aid volatility and misalignment of iv the aid allocations across (within) sectors and among countries compromise the potency of aid in the region. Incidences of foreign aid receipts over and above the estimated external development financing gaps are partially due to the large share of humanitarian assistance in some countries. However, they also imply a lack of systematic assessment of the region’s development financing needs, particularly in countries whose public investments were fully covered by domestic resources yet these countries received foreign aid. Furthermore, sectoral prioritization in favour of non-growth enhancing consumption, mostly in the social sectors, may be redundant as far as growth is concerned. In this regard, the thesis recommends a joint donor-recipient country financing needs and COMESA-wide capacities assessments for effective targeting to improve growth outcomes of aid. This approach to development financing will be more effective if accompanied by policies that focus on strengthening domestic institutions and increasing domestic resource mobilization. Secondly, contending for comparable impacts of aid across the countries in the region for the attainment of unified regional growth and development goals, Chapter 5 assessed how the received aid affected growth in the respective countries using the Pooled Mean Group (PMG) estimator. The thesis found that although aid had a significant positive impact on growth in the short run, its long-term effect was negative. The results show that the long-term impact of grants on growth is positive and significant, while the net effect of loans on growth was negative and significant. In line with the visible adverse effects of corruption on aid utilization in the short run in most countries, the results show that corruption has a net negative impact on the utilization of loans and grant. Accordingly, the short-run effects of loans and grants varied significantly among the countries in the region, potentially reflecting which component of aid is mostly affected by their respective weak institutions. Overall, the results show thart the potency of total foreign aid is equally compromised by corruption in the long term . Furthermore, Chapter 5 found that domestic savings have a positive effect on growth both in the short and long run. Therefore, the chapter postulates better outcomes from aid if COMESA effectively addresses corruption in all its member countries. This should be complemented with policies and strategies that focus on effectively increasing domestic revenue (savings) to further enhance their growth outcomes complemented with foreign aid. Lastly, rationalisation of the region’s exports to enhance their competitiveness remains imperative if the exports are to productively contribute to its regional growth goals. v Thirdly, Chapter 6 analysed the impact of agricultural foreign aid on agricultural productivity and growth in a Panel Vector Autoregressive (PVAR) framework. The chapter finds a significant unidirectional causality from agricultural growth to foreign aid and thus confirming the theoretical dispositions of the developmental role of foreign aid. However, instead of complementing domestic resources in this regard, the results showed that foreign aid in the sector substitutes government financing, which effectively reduces its effectiveness. A mismatch in government resources and aid allocations to a sub-sector erodes the synergy that should typically exist between donor aid and government expenditure in a sector. This mismatch implies that a policy shift towards Result-Based (Aid on Delivery) approaches in aid disbursements will be critical to eliminating fungible resources. Misalignment of aid allocations with the respective sub-sectoral relative importance in the sectoral development goals was further found to undermine the potency of aid in the sector. Accordingly, the thesis contends for a better understanding of the role various sub-sectors play to the overall growth of the agriculture sector. This understanding will be crucial for equitable resource allocation and enhanced aid effectiveness. Moreover, the higher impact of domestic resources compared to foreign aid calls for policies to increase domestic resource mobilization and a broader focus on reducing aid. Lastly, the thesis assessed the contribution of foreign aid to the region’s infrastructure development in Chapter 7. Using the Blundell-Bond (BB) system Generalised Methods of Moments, the paper found that foreign aid has a net negative effect on infrastructure development mainly because of corruption which increases the cost of its loans. Although the results shows that corruption does not affect net utilization of grants, the regional effect of grants on infrastructure development negative. Notably, grants have been steadily declining since 2009 (Figure 3). Overall, the chapter shows the potential that loans have in turning around the infrastructure deficit in the region, particularly if corruption is effectively addressed in all the COMESA countries. Thus, the chapter concludes that unless COMESA countries effectively addresses corruption, it cannot adequately close its infrastructure gaps and cannot enhance its growth with foreign aid. With the highlighted positive and significant impact of domestic resources on infrastructure development in its core model, the chapter further recommends the exploring of other avenues of revenue for closing the infrastructure gaps. This examination will be beneficial in fast-tracking infrastructure development and enhance economic growth in the region. vi Overall, notwithstanding the comparable short-run positive effects of aid on growth across the countries in the region, the research failed to conclude that foreign aid positively contributes to the region’s long- term sustainable growth and development objective. While it marginally enhances productivity and growth of its core growth sector, foreign aid in the region has failed to bring about the desired changes in the growth-enhancing support sectors (economic infrastructure and social sectors). High levels of corruption in some of its member countries, which potentially lead to unnecessary increases in the overall financial costs of its loans, undermines the potency of foreign aid. Similarly, the substitution effect of aid on domestic resources further compromise the performance of foreign aid in the region. In this regard, “aid on delivery” (result based) approaches remain the best policy option to effectively eliminate fungible resources in all countries in the region. Furthermore, poor alignment of aid to the respective development financing gaps both across (within) sectors and countries is vital in accounting for aid inefficiency in enhancing the region’s growth. On the one hand, there is evidence of the lack of systematic assessment on the part of the region’s development partners (donors) to properly align aid to the region’s development financing gaps as reflected by episodes of aid over and above existing development financing gaps. While the large component of humanitarian aid in some of the countries in the region comprehensively explains this mismatch, it does not provide enough explanation about other countries in the region, including those whose investments were fully covered by domestic resources in the presence of aid receipts. On the other hand, poor sectoral prioritization of the received aid across the countries in favour of non-growth enhancing consumption, mostly in the social sectors, is redundant for the attainment of its growthenhancing objectives. In this regard, a thorough understanding of the region’s development financing needs and capacities to ensure the right targeting and effective utilization of both foreign aid and domestic resources remains imperative. Enhancing domestic resource mobilization will further be beneficial in reducing aid dependency in the region.
An analysis of the impact of the motor industry development programme (MIDP) on the development of the South African motor vehicle industry.
(2001) Damoense, Maylene Yvette.; Bromberger, Norman.; Bell, Robert Trevor.
The study aims to research the performance of past and present motor industry policy in South Africa - with special reference to Phase VI of the local content programme and the Motor Industry Development programme (MIDP) - in the light of the domestic macroeconomic environment and global developments in the world automotive industry. The overall objective of this dissertation is to contribute to the debate on motor industry policy which concerns what future policy would be appropriate for the development of a viable and competitive motor vehicle industry. Thus this study is primarily policy-oriented, and the empirical analysis produced deals with important developments in the local motor and component industries and attempts to examine key variables to establish the likely impact of industry-specific policy changes - both past and future. The method of investigation involves the study of relevant theoretical literature regarding domestic automotive policy, and considers policies of low-volume automobile producing economies, especially Australia, Philippines, India and Malaysia. Also, empirical data of various sub-sectors of manufacturing in South Africa were examined and compared to the motor vehicle sector in order to determine the extent to which the macroeconomic state of the domestic economy as distinct from automotive policy might explain the performance of the South African motor industry. The dissertation presents a review of the local content programme of motor industry policy in South Africa since the early 1960s. It examines the claim that import-substituting policy in the motor industry actually had a negative impact on the country's balance of payments. The study finds questionable whether local content policy contributed significantly to the large net foreign exchange usage by the motor industry in real terms. There is evidence that increases in the nominal industry trade deficit can largely be explained by the weakening of the Rand, especially during the mid-1980s. Also, empirical data was used to make an examination of the performance of automotive exports under Phase VI and the MIDP in the context of economy-wide trade liberalization. It was found that exports of automotive products grew significantly under both Phase VI and the MIDP in real Rand terms. Thus, it seems probable that industry-specific policy played a major role in the strong export performance of the sector since the late 1980s through to the 1990s. The study then reviews the revised version of the impact of the MIDP and considers the future of the industry. The state of the domestic macroeconomic environment and globalization of the international automobile industry, including the influence of Transnational Corporations' (TNCs') strategies, will undoubtedly determine the future direction of South Africa's automotive sector. In the short to medium term, we might expect an increase in imported vehicles and some rationalization of the industry. Over the longer term, the possibility of fewer OEMs and component suppliers, and automotive exports are likely to rise as trade and the inflow of foreign investment accelerates due to foreign collaboration and global competition. A simple theoretical model applicable to the South African automotive industry attempts to show the welfare implications of a protective automotive regime (similar to Phase VI) and compares it with that of a more liberal (tariffs-only) automotive regime that may be considered as a likely policy-option for South Africa post-MIDP. The theoretical analysis indicates that the tariffs-only policy is superior to that of a more protective regime in that static efficiency losses are lower. However, the dynamic effects of such policy changes and of possible TNC responses to them, which are referred to in the previous paragraph, are not included in this simple model.
An analysis of the impact that electrification has had on the rural domestic energy market in northern KwaZulu-Natal, 1989- 1993: implications for the marketing of strategic infrastructural services.
(1995) Crawford, Grant John.; McCarney, L.
Abstract available in PDF.
An analysis of the South African equity market and sector return-risk relationship (January 1990-December 2002).
(2004) Malahay, Brent Mallari.; Oldham, George W.
The research paper is an analysis of the South African equity market and sector return-risk relationship. The following two basic questions, addressed in the research paper, pertain to the South African equity market for the period January 1990 to December 2002: (1) how did equity prices behave; and (2) what were the fundamental factors that caused these price movements? Two contrasting sub-periods are identified, namely, Period 1 (January 1990 to June 1997 and Period 2 (July 1997 to December 2002. Period 1 is the pre-Asian financial crisis period and Period 2 is the post-Asian financial crisis period. During the thirteen-year period (1990 to 2002) a market index explained most of the effect on market and sector returns. However, the composition of this market index varied between Period 1 and Period 2. During Period 1, when equity prices and the rand exchange were relatively stable, the market index was composed of domestic systematic risk. This signified that investors were looking 'inwards' or were more concerned about domestic fundamentals i.e. domestic financial stability. Contrastingly, during Period 2, when equity prices and the rand exchange were relatively volatile, the market index was composed of foreign systematic risk. This signified that investors were looking 'outwards' or were more concerned about global fundamentals i.e. global financial stability. It was further found that over the course of January 1990 to December 2002, South African equity sector returns from the resource, financial and non-resource/financial sectors had experienced abnormal returns. The abnormal returns indicate sector inefficiency and/or cognitive biases in investor behaviour.
The analytical and empirical appraisal of the Ricardian equivalence with reference to South Africa.
(1998) Newport-Gwilt, Victoria Joan.; Simson, Richard Andrew.
The Government of National Unity, on coming into power in April, 1994, has endorsed the reconstruction and development programme (RDP) and its broad agenda for the rapid removal of the problems and gross inequality evident in all aspects of the South African society. Many economists argue that the sustain ability of the RDP, will depend crucially on the maintenance of fiscal discipline and the progressive reduction of the overall fiscal deficit. As excessive fiscal deficits are often associated with higher inflation, higher real interest rates, balance of payments disequilibrium and lower economic growth, thereby putting the RDP at jeopardy. The view based on the Ricardian Equivalence approach however, takes the position that neither deficits nor the way they are financed, is as critical to economic policy and the future prosperity of an economy, as is generally believed. The Ricardian view consequently, argues that government need not necessarily embark on deficit reduction programmes as advocated by the so called traditional view. The study investigates the validity of the Ricardian view, both on the empirical and theoretical side, with special reference to the South African economy. The specific question that this study attempts to address is whether economic agents behave in a Ricardian manner in the South African economy. Our results (based on the replication of the Dalamagas (1994) study) could be very consequential for South African policy makers, as they suggest that the Ricardian Equivalence proposition is valid and therefore, government could on purely theoretical grounds shift its focus away from the debt situation, and concentrate on the policies aimed to correct the inequalities (in wealth, distribution of public goods, employment opportunities) created by the Apartheid era. Whether government should do so in reality however is debateable due to the other considerations that government need to take account of when implementing actual macroeconomic policy.
The applicability of the risk-free rate proxy in South Africa : a zero-beta approach.
(2009) Charteris, Ailie Heather.; Strydom, Barry Stephen.
An applied trancendental logarithmic cost function : economies of scale and elasticities of substitution in selected South African manufacturing sectors (1972-1990).
(1995) Cobbledick, John.; Hofmeyr, Julian. F.
Moll (1991) has criticised the proposal that demand restructuring should act as the impetus for economic growth in a post-apartheid South Africa on the grounds of, a lack of empirical support. The demand restructuring thesis is premised on two empirically testable assertions: firstly that realisable economies of scale are greater in labour-intensive wage goods sectors than in luxury goods and secondly that in manufacturing as a whole labour can easily substitute for capital. While a number of studies employing either the Cobb-Douglas (Cobb & Douglas, 1948) or Constant Elasticity of Substitution (CES) ( Arrow, Chenery, Minhas & Solow, 1961) functions have attempted to quantify these features of technology, their conclusions are potentially invalid. Both functions impose the maintained hypotheses of homotheticity, homogeneity and seperability a priori. As primary hypothesis tests regarding the magnitude of parameters depend on the validity of both the hypothesis being tested and the underlying maintained hypotheses, the plausibility of maintained hypotheses is an important consideration when choosing a functional form for econometric analysis. Homotheticity and homogeneity constrain the theoretical determinants of economies of scale and seperability. The theoretical determinants of substitution thus limit the contexts in which functions which embody these hypotheses are likely to be appropriate. The mathematical concept of duality has permitted the development of flexible, general functions, such as the Transcendental Logarithmic Cost Function (Christensen, Jorgensen and Lau, 1971, 1973), which rather than imposing, permits the testing of the most commonly imposed maintained hypotheses. By applying this function to three sub-sectors of South African manufacturing both the validity of the commonly imposed maintained hypotheses and the empirical premises of the demand restructuring position are assessed in this dissertation. This application indicates that not only are the hypotheses of homotheticity, homogeneity and seperability invalid but that the inappropriate imposition of homotheticity, homogeneity and seperability invalid but that the inappropriate imposition of homotheticity biases estimates of scale downwards. Evidence also emerges to challenge Moll's (1991) assertions regarding the empirical validity of demand restructuring.