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The impact of basic and social infrastructure investment on South African economic growth and development

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  • Henk Gnade
  • Phillip Frederick Blaauw
  • Talita Greyling

Abstract

Basic and social infrastructure investment can assist in addressing widespread inequality and divided societies by promoting economic growth and social development. The aim of this study is to determine whether basic and social infrastructure investment differently affect economic growth and social development indicators of urban and rural municipalities. We used a balanced panel dataset containing infrastructure, economic, demographic and social indicators for rural and urban municipalities for the period from 1996 to 2012. Principal component analysis was used to construct synthetic indices of basic and social infrastructure. Restricted within least squares dummy variable estimation techniques are used to evaluate the differences between urban and rural municipalities. The elasticities of basic and social infrastructure investment generally are more pronounced for economic growth and social development indicators in rural municipalities. These findings could potentially influence policy decisions in terms of infrastructure investment in favour of rural municipalities to increase economic growth and social development.

Suggested Citation

  • Henk Gnade & Phillip Frederick Blaauw & Talita Greyling, 2017. "The impact of basic and social infrastructure investment on South African economic growth and development," Development Southern Africa, Taylor & Francis Journals, vol. 34(3), pages 347-364, May.
    • Handle: RePEc:taf:deveza:v:34:y:2017:i:3:p:347-364
    DOI: 10.1080/0376835X.2017.1308854
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    Cited by:

    1. Anda David & Nathalie Guilbert & Nobuaki Hamaguchi & Yudai Higashi & Hiroyuki Hino & Murray Leibbrandt & Muna Shifa, 2018. "Spatial Poverty and Inequality in South Africa: A Municipality Level Analysis," Discussion Paper Series DP2018-02, Research Institute for Economics & Business Administration, Kobe University.
    2. Gao, Yuan & Tian, Li & Cao, Yandong & Zhou, Lin & Li, Zhibin & Hou, Deyi, 2019. "Supplying social infrastructure land for satisfying public needs or leasing residential land? A study of local government choices in China," Land Use Policy, Elsevier, vol. 87(C).

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