The impact of public infrastructure investment on South Africa’s economy: evidence from social accounting matrix and computable general equilibrium-based approaches

Vandudzai Mbanda () and Lumengo Bonga-Bonga
Additional contact information
Vandudzai Mbanda: University of Johannesburg

Quality & Quantity: International Journal of Methodology, 2024, vol. 58, issue 4, No 21, 3535-3558

Abstract: Abstract This paper assesses the general equilibrium impacts of public infrastructure investment in the South African economy, as a case of an emerging economy, by making use of complementary general equilibrium models, such as the social accounting matrix (SAM) multiplier, the Structural Path Analyses (SPA) and the Computable General Equilibrium (CGE) models. Contrary to studies that use partial equilibrium models, this paper shows the importance of an economy-wide model to analyse the effects of public infrastructure investment in an emerging economy. The results of the analysis, based on the SAM and CGE analyses using a 2015 SAM for South Africa, indicate that increasing public economic infrastructure can be an effective way of stimulating the economy in a way that has a positive impact on labour. SPA shows that the leading and most important path of influence is the direct influence of the public infrastructure investment on each formal labour category. However, because the public infrastructure investment does not employ informal labour, this labour account is only indirectly connected via intermediate consumption of the output of the construction sector. These results suggest that an increase in public economic infrastructure could help address the unemployment problem that exacerbates poverty in South Africa.

Keywords: Public infrastructure investment; South Africa; Social accounting matrix; Structural path analysis; Computable general equilibrium (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11135-023-01804-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:qualqt:v:58:y:2024:i:4:d:10.1007_s11135-023-01804-7

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11135-023-01804-7

Access Statistics for this article

Quality & Quantity: International Journal of Methodology is currently edited by Vittorio Capecchi

More articles in Quality & Quantity: International Journal of Methodology from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().