The recent global financial crisis sparked renewed debates, both within academia and policy-making circles, about regulating highly mobile cross-border money-capital flows. A particular type of policy tool has received considerable attention: capital controls (CC). Within mainstream economics and policy-oriented circles (including policy-makers in central banks, finance ministries, and international organisations such as the IMF and the G20) there has been a growing recognition that unregulated cross-border money-capital flows can considerably disrupt capital accumulation, and debates have accordingly focused on the potential role and effectiveness of temporary CC in limiting the destabilising potential of those flows, while maintaining a long-term commitment to an open capital-account and free capital mobility. By contrast, the Left (including organised labour, progressive economists, and civil society organisations) has been largely critical of capital-account liberalisation, and has denounced its detrimental effects in terms of constraining policy options for development and long-term industrial development.Read More »
This July and August, I led an international group of experts in preparing an Economic Report on the role of the BRICS countries (Brazil, China, India, Russia and South Africa) in the world economy and international development. The Report was commissioned as an input to the Summit of BRICS countries that took place in early September 2017 in Xiamen, China.
It surveys the BRICS countries’ sizable contribution to global growth, trade and investment, evaluates the prospects for this to continue in the future, and explores the possible role that these countries can play in bolstering the global economy, in reshaping international economic arrangements and in contributing to the Sustainable Development Goals and to international development generally. An important conclusion in the report is that continued BRICS growth as well as policy initiatives can substantially benefit other developing countries (the report uses the IMF category of Emerging Market and Developing Countries, or EMDCs) – and developed countries too. I will be pleased if the report will be circulated widely, and welcome all reactions.Read More »
Towards the end of 2016, something remarkable happened in the relationship between the private sector and state in South Africa. In an effort to keep the big three rating agencies from downgrading the country’s the sovereign credit rating to “junk status” the CEO Initiative was convened at the request of the President and his Deputy and led by the then Minister of Finance. The initiative’s initial goals were to prevent a sovereign rating downgrade and to stimulate inclusive and sustainable growth. To achieve this, three work streams were established: a fund for small and medium sized enterprises (SME), a youth employment scheme, and an investment intervention team. This post critically assesses the theoretical basis for SME development as a tool for inclusive growth.Read More »
In a previous post, I wrote about the global trend of premature deindustrialization; the trend towards lower levels of industrial employment, and a shift away from industrial employment at lower levels of per capita income, and how the effects on human well-being of these trends are not yet clearly understood. An important question in understanding the impact of these changing structural patterns on individuals’ well-being is to whether either a lifting of the living standards of those not in formal employment, or the generation of employment to replace the manufacturing employment, is taking place.
In a recent working paper, I illustrated how combining a household level indicator of well-being with decomposition of change analysis can shed light on these questions by focusing on two specific episodes of growth; South Africa from 1996 to 2007 and Brazil from 1991 to 2010. Using Census data from IPUMS, I created indices of well-being on a scale of 0-100, using indicators such as child survival rate, access to clean water and electricity, and educations levels, culled from census data. Next, each household was assigned to a “type” based on sectoral employment of the household head and urban/rural location, and average household scores were calculated for each type. A decomposition of change analysis was then used to assign improvement in well-being to improvement within the types and shifts in population between these types.Read More »
Recent research by Wits University’s National Minimum Wage Research Initiative (NMWRI) argues that workers receiving relatively more income from the implementation of a national minimum wage could boost domestic output and spending.
Several analysts, including Terry Bell in Fin24, and economist Dawie Roodt on Business Day TV, disagree.
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