Economic Growth in South Africa since the late nineteenth century
Rereading D Hobart Houghton's The South African Economy (1967) and Economic Development1865-1965 (1971) brings to mind the stark theoretical and empirical differences between his account of thirty years ago and current views of economic growth. Hobart Houghton wrote within the optimistic and conceptually quite simple framework of W W Rostowâ€™s five stages of economic growth - only get to "take off" and your economic future is assured - whereas analysis of economic growth now draws on a more extended and technical literature which comes to no such simple conclusion. Hobart Houghton was writing after three decades of sustained growth in real per capita income; since then an extended period of falling real per capita income has inscribed itself on the South African record (see Figure 1), during a period of political instability and change. Hobart Houghton wrote in the Bretton Woods world which had gathered to itself a sense of stability: we are more uncomfortably aware that international trade and finance regimes have changed several times since the middle of the nineteenth century, usually with sharp and widespread transition costs. And thirty years ago, comparative information on economic growth was limited to a small (and biased) sample of countries. As more and more countries are brought within the scope of the World Bankâ€™s World Development Report, for instance, it has become apparent that middle income countries (of which South Africa is one) can regress economically just as easily as they can progress. Governments and peoples now understand themselves as engaged in the elusive quest for economic growth.
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