After Apartheid: The Effects of ANC Power

Jonas Poulsen ()
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Jonas Poulsen: Uppsala Center for Fiscal Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

No 2013:10, Working Paper Series, Center for Fiscal Studies from Uppsala University, Department of Economics

Abstract: The African National Congress (ANC) can look back on eighty years of struggle which resulted in the liberation of black Africans, the creation of a democratic constitution and free elections. However, the last twenty years of ANC rule has been criticized for the failure to bring higher living standards for the formerly oppressed. With the party's dominance and the challanges facing South Africa in mind, I estimate the effect of ANC power in municipalities on economic, social and budgetary outcomes. To estimate the causal effect of the party, this paper uses an instrumental variable approach developed by Freier & Odendahl (2012) and a regression discontinuity design. Taken together, the results point to an adverse effect of the party: less is spent on repairs and water provision which in turn may explain why ANC power seems to lower the share of individuals who have access to piped water and electricity. Further, more resources are used on municipal employees and the councillors themselves, while I find suggestive evidence of an increase in the poverty rate due to the party. Lastly, although being their major political support, we cannot conclude that the ANC affects black African's living standards. From the IV analysis, I find indications that oppositional parties many times have a more positive impact on outcomes as they gain power at the expence of the ANC.

Keywords: ANC; party effects; instrumental variable; regression discontinuity; South Africa (search for similar items in EconPapers)
JEL-codes: H11 N47 O12 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2013-09-09
New Economics Papers: this item is included in nep-afr and nep-dev
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