The Impact of the Global Economic Crisis on Sub-National Government – Lessons from the Free State Province in South Africa

Hélène Maisonnave, Jugal Mahabir, Ramos Mabugu and Margaret Chitiga ()
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Margaret Chitiga: Department of Economics, University of Pretoria
Authors registered in the RePEc Author Service: Margaret Mabugu

No 201012, Working Papers from University of Pretoria, Department of Economics

Abstract: A provincial computable general equilibrium model for the Free State province in South Africa is used to quantify the channels by which the recent global economic crisis affects the province. The analysis allows focus on three levels through which provincial economies and their people are impacted by a global economic crisis, namely the macro-economic level, the meso-economic level and the micro-economic/household level. The novel features of the paper are mainly applying this methodology at sub national government level. The decrease in world prices combined with the drop in world demand lead to a fall in production for most sectors in the province. There is a negative impact on institutions, and households see their incomes drop. Though the crisis seems to be petering out now, there are lessons for intergovernmental financial relations that this paper has highlighted and long run effects of the crisis that the province needs to confront.

Keywords: Global crisis; Computable General Equilibrium (search for similar items in EconPapers)
JEL-codes: D58 G01 O55 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-06
New Economics Papers: this item is included in nep-afr and nep-cmp
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Citations: View citations in EconPapers (1)

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