Understanding South Africa's Economic Puzzles

Dani Rodrik ()

No 5907, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: South Africa has undergone a remarkable transformation since its democratic transition in 1994, but economic growth and employment generation have been disappointing. Most worryingly, unemployment is currently among the highest in the world. While the proximate cause of high unemployment is that prevailing wages levels are too high, the deeper cause lies elsewhere, and is intimately connected to the inability of the South African to generate much growth momentum in the past decade. High unemployment and low growth are both ultimately the result of the shrinkage of the non-mineral tradable sector since the early 1990s. The weakness in particular of export-oriented manufacturing has deprived South Africa from growth opportunities as well as from job creation at the relatively low end of the skill distribution. Econometric analysis identifies the decline in the relative profitability of manufacturing in the 1990s as the most important contributor to the lack of vitality in that sector.

Keywords: economic growth; South Africa (search for similar items in EconPapers)
JEL-codes: O11 O14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-dev and nep-pke
Date: 2006-10
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Working Paper: Understanding South Africa's Economic Puzzles (2006)
Working Paper: Understanding South Africa's Economic Puzzles (2006)
Journal Article: Understanding South Africa's economic puzzles * (2008)
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