- Title
- The impact of public spending on economic growth, employment and poverty reduction in South Africa
- Creator
- Kavese, Kambale
- Subject
- Expenditures, Public -- South Africa
- Subject
- Economic development -- South Africa Labor economics -- South Africa Employment (Economic theory) Poor -- Employment -- South Africa South Africa -- Economic conditions
- Date Issued
- 2019
- Date
- 2019
- Type
- Thesis
- Type
- Doctoral
- Type
- DPhil
- Identifier
- http://hdl.handle.net/10948/39940
- Identifier
- vital:35570
- Description
- This study seeks to assess the effect of public spending on economic growth, employment, and poverty reduction. The co-existence of a sound fiscal policy and a substantial government expenditure but insignificant returns in terms of social development suggests the potential of a dilemma that needs to be investigated, and to reflect on the dynamics of selected marginalised groups of people and marginalised areas. Hence, the “social inclusion” strategy of the RDP in 1994, and the “inclusive economy” strategy of the NDP in 2014 were implemented with one single objective in mind, that is to narrow the gaps associated with the legacy of apartheid. Despite the implantation of government plans like the RDP and recently the NDP, and regardless of the effective use of fiscal policy, low growth has continued during the post-recession era; unemployment and inequality have persistently remained at high levels. This paradox has led to controversies around fiscal policy’s dual role of stimulating economic growth and income redistribution. To achieve the research objective, the study employs four types of empirical techniques: the nonlinear autoregressive distributive lag (N-ARDL) cointegration model; the economy-wide Leontief approach calibrated on the supply and use tables (dynamic SUT model); a partial general equilibrium approach based on the Social Accounting Matrix (SAM model) used for micro-simulations; and lastly a contemporaneous dynamic computable general equilibrium (CGE) model to assess the effect of fiscal policy on macroeconomic and socioeconomic variables. The study found that during the post-recession era, expansionary fiscal policy had a positive but minute effect on growth, employment and poverty reduction. The effect of government spending has had a minimal effect on historically marginalised groups of people and marginalised areas. This is why a tortoise pace in reducing poverty and inequality has persisted. So, the study recommends that governments should follow a priorities-based government spending policy which fits well with the current situation of the country. Moreover, South Africa needs to adopt international standards and best practices of “science-based strategic” rather than that of “evidence-based strategy” and ensure that only programmes that have proved to be effective be financed in the fiscal budget.
- Format
- xii, 184 leaves
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Kambale Kavese.pdf | 1 MB | Adobe Acrobat PDF | View Details Download |