Public Finance and Fiscal Policy in South Africa

2021 ◽  
pp. 934-955
Author(s):  
Tania Ajam
Keyword(s):  
Fiscal Policy ◽  
Global Financial Crisis ◽  
African National Congress ◽  
Policy Uncertainty ◽  
Potential Growth ◽  
Fiscal Institutions ◽  
Wage Bill ◽  
Fiscal Adjustment ◽  
State Capture ◽  
The Global Financial Crisis

This chapter explores the trajectory of post-apartheid fiscal policy, focusing on the growth, equity, and sustainability trends between 2009 and 2019. Buoyed by the commodity boom, the African National Congress governing party strengthened fiscal institutions, improving the credibility and solvency of fiscal policy in the first fourteen years after the democratic transition. The decade after the global financial crisis in 2008 saw declining potential growth rates, deteriorating terms of trade, the institutionalization of state capture during the Zuma administration until 2018, policy uncertainty, widespread electricity outages, and a burgeoning public-sector wage bill. Rising deficits, debt, and state-owned-enterprise contingent liabilities triggered austerity without genuine fiscal consolidation. The coronavirus pandemic amplified these unsustainable trends arising from deferred structural fiscal adjustment.

On the formation of a New Paradigm of fiscal Policy

2013 ◽  
pp. 152-158 ◽  
Author(s):  
V. Senchagov
Keyword(s):  
Public Finance ◽  
Fiscal Policy ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Domestic Demand ◽  
Real Economy ◽  
New Paradigm ◽  
Monetary Aggregate ◽  
The Past ◽  
The Global Financial Crisis

Due to Russia’s exit from the global financial crisis, the fiscal policy of withdrawing windfall spending has exhausted its potential. It is important to refocus public finance to the real economy and the expansion of domestic demand. For this goal there is sufficient, but not realized financial potential. The increase in fiscal spending in these areas is unlikely to lead to higher inflation, given its actual trend in the past decade relative to M2 monetary aggregate, but will directly affect the investment component of many underdeveloped sectors, as well as the volume of domestic production and consumer demand.

Politics and Economic Policymaking in South Africa since 1994

2021 ◽  
pp. 65-90
Author(s):  
Alan Hirsch ◽  
Brian Levy ◽  
Musa Nxele
Keyword(s):  
South Africa ◽  
Black People ◽  
Global Financial Crisis ◽  
Slow Growth ◽  
Economic Transformation ◽  
Policy Uncertainty ◽  
The Poor ◽  
The Global Financial Crisis ◽  
Growth Economic ◽  
Political Settlement

Economic policy in South Africa since 1994 has confronted the imperative to include middle class, working class and poor black people more fully into the economy in circumstances which circumscribe the scope for constructive negotiation and lasting agreement. The new regime of 1994 sought a political settlement which allowed stronger growth, economic transformation of the elite and economic inclusion of the poor. After meeting with some success, the combination of the global financial crisis and new political leadership led to policy uncertainty, increasing corruption and some deterioration of state capacity, which resulted in exceptionally slow growth. The puzzle this chapter engages with is why the struggle over rents has stood in the way of a mutually beneficial deal.

Fiscal Adjustment for Stability and Growth

Policy Papers ◽  
2006 ◽  
Vol 2006 (1) ◽  
Author(s):  
Keyword(s):  
Fiscal Policy ◽  
Individual Country ◽  
Fiscal Institutions ◽  
Fiscal Adjustment ◽  
Macroeconomic Stability

This paper aims to inform policymakers, and other interested parties, about the IMF’s approach to fiscal adjustment. The approach focuses on the role of sound and sustainable government finances in promoting macroeconomic stability and growth. Achieving, and maintaining, such a fiscal position often requires adjusting fiscal policy, as well as strengthening fiscal institutions. Fiscal adjustment may involve either tightening or loosening the fiscal stance, depending on individual country circumstances.

Fiskalpolitik und Finanzmärkte: Perspektiven für Forschung und Wirtschaftspolitik

2012 ◽  
Vol 13 (Supplement) ◽  
pp. 13-35
Author(s):  
Gernot Müller
Keyword(s):  
Fiscal Policy ◽  
Financial Markets ◽  
Financial Market ◽  
Economic Activity ◽  
Global Financial Crisis ◽  
New Keynesian ◽  
Sovereign Risk ◽  
Market Conditions ◽  
Fiscal Multiplier ◽  
The Global Financial Crisis

AbstractThe conduct of fiscal policy has been altered considerably in the context of the global financial crisis, that is, at times when financial markets conditions were extraordinary turbulent. Yet financial market conditions determine how fiscal impulses are transmitted through the economy and, eventually, the size of the fiscal multiplier. I develop a comprehensive perspective on how financial market conditions alter the effects of fiscal policy on economic activity within a New Keynesian framework. Drawing on historical as well as systematic considerations, I distinguish a scenario of 1) “normal times” characterized by smoothly operating financial markets, 2) financial markets characterized by tight credit conditions in the private sector and constraints on monetary policy and 3) financial markets, in addition, characterized by high sovereign risk. I argue that the size and even the sign of the multiplier may differ across these scenarios.

scholarly journals Which Way Now? Economic Policy after a Decade of Upheaval: A CAGE Policy Report

2019 ◽  
Author(s):  
Charlotte Cavaille ◽  
Federica Liberini ◽  
Michela Redoano ◽  
Anandi Mani ◽  
Vera E. Troeger ◽  
...  
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Real Income ◽  
Legal Framework ◽  
Policy Uncertainty ◽  
Social Challenges ◽  
Related Risk ◽  
The Government ◽  
The Global Financial Crisis ◽  
The Uk

Most, if not all advanced economies have suffered gravely from the 2008 global financial crisis. Growth, productivity, real income and consumption have plunged and inequality, and in some cases poverty, spiked. Some countries, like Germany and Australia, were better able to cope with the consequences but austerity has taken its toll even on the strongest economies. The UK is no exception and the more recent period of economic recovery might be halted or even reversed by the political, economic, and policy uncertainty created by the Brexit referendum. This uncertainty related risk to growth could be even greater if the UK leaves the economic and legal framework provided by the EU. This CAGE policy report offers proposals from different perspectives to answer the overarching question: What is the role of a government in a modern economy after the global financial crisis and the Brexit vote? We report on economic and social challenges in the UK and discuss potential policy responses for the government to consider. Foreword by: Lord O’Donnell of Clapham.

scholarly journals Nonlinear effects of fiscal policy on national saving

2018 ◽  
Vol 25 (1) ◽  
pp. 2-14
Author(s):  
Duy-Tung Bui
Keyword(s):  
Fiscal Policy ◽  
Financial Crisis ◽  
Empirical Model ◽  
Tax Policy ◽  
Global Financial Crisis ◽  
Economic Recession ◽  
Generation Model ◽  
Content Type ◽  
Financial Crisis Of 2008 ◽  
The Global Financial Crisis

Purpose The purpose of this paper is to examine the impacts of fiscal policy, namely, net tax and government expenditure on national saving and its nonlinearity. The author first investigates whether the impacts of fiscal policy on national saving have changed after the global financial crisis of 2008. Then, the author tests the nonlinearity of the relationship by taking account of the economic cycle, namely, economic expansion (boom) and economic recession (bust). Design/methodology/approach The empirical model bases on a reduced-form equation with national saving as a dependent variable, lagged value of national saving, output gap and fiscal policy as independent variables. The two-step system GMM approach was employed to estimate the empirical model, using a panel of 23 emerging Asian economies in the period of 1990-2015. Findings The empirical results show that tax policy and expenditure policy follow the predictions of the overlapping generation model with finite horizon and the Keynesian view. The nonlinearity of fiscal policy is twofold. The conduct of fiscal policy in the period after 2008 seems effective, while the effect is insignificant in the period before 2008. Likewise, fiscal policy tends to have more significant effects in bust cycle. The effect of tax policy is increased during recession, while the effect of government spending is more pronounced during economic downturn. Originality/value The contributions of this paper are twofold. First, it is shown that fiscal policies in the region had more impacts on national saving after the global financial crisis of 2008. Second, the research confirms nonlinear impact of fiscal policy on saving behavior during economic recession and economic boom.

scholarly journals Fiscal Policy in the EU Countries Most Affected by the Crisis: Greece, Ireland, Portugal, and Spain

2014 ◽  
Vol 17 (3) ◽  
pp. 5-27
Author(s):  
Anna Krajewska
Keyword(s):  
Fiscal Policy ◽  
Financial Crisis ◽  
Euro Area ◽  
Financial Support ◽  
International Institutions ◽  
Global Financial Crisis ◽  
The European Union ◽  
Negative Effect ◽  
The Global Financial Crisis ◽  
The Eu

The global financial crisis which began in 2007-2008 had a negative effect on the economy of the European Union, mainly in selected countries of the euro area: Greece, Ireland, Portugal and Spain. These peripheral euro zone countries come out of recession and the financial crisis largely due to the great financial support of the international institutions. Hundreds of billions of euro were spent to save these economies. At the same time, however, these countries were characterized by the lowest level of fiscal policy - measured by share of taxes in GDP - among the countries of the euro area. In this paper I will try to answer the following questions:1. What were the causes of the downturn in those countries, and what restructuring actions were taken;2. What changes were introduced in the tax system under the policy to repair public finances;3 .How have these changes affected the level and the structure of budget revenues from taxes, and to what extent has the crisis affected the change in the tax burden on consumption, labour, and capital.

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