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Some policy proposals for future infrastructure investment in South Africa

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  • Johan Fourie

    () (Department of Economics, Stellenbosch University)

Abstract

The South African government has begun to ramp up economic infrastructure investment. This is an important policy shift and in line with the government’s aim of increasing economic growth to 6% and halving poverty by 2014. It follows that we are left with the question: What are the most important areas for infrastructure investment, both type and location? This paper provides a short review of the essential characteristics of infrastructure as well as a guide to the past and present features of South Africa’s infrastructure stock. Three main policy proposals are made: provide basic infrastructure to all, improve the quality of existing infrastructure, and provide transnational infrastructure. Since 1994, the government has increased the access to basic services of a large part of the population, although there is still room for improvement. However, a lack of institutional and managerial capacity at the local level seems to be a constraint on delivering basic infrastructure services. Furthermore, comparative analysis reveals that the country’s infrastructure quality lag those of other countries. However, politicians may prefer to provide new infrastructure rather than improving existing infrastructure, as it provides a wider support base. This could lead to significant inefficiencies, especially with the politically sensitive 2010 Soccer World Cup approaching. Regional integration is an important long-term requirement to ensure sustainable economic growth and prosperity for the countries of southern Africa. Currently, South Africa is poorly integrated into the rest of Africa. The current transnational institutions – SACU, SADC, NEPAD – do not have the institutional and financial capacity to provide such infrastructure. A strong emphasis on providing transnational infrastructure – specifically transport, energy and ICT infrastructure – is proposed.

Suggested Citation

  • Johan Fourie, 2006. "Some policy proposals for future infrastructure investment in South Africa," Working Papers 05/2006, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers19
    as

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    File URL: https://www.ekon.sun.ac.za/wpapers/2006/wp052006/wp-05-2006.pdf
    File Function: First version, 2006
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    References listed on IDEAS

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    1. Jan Willem Gunning & Paul Collier, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March.
    2. Robinson, James A. & Torvik, Ragnar, 2005. "White elephants," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 197-210, February.
    3. Musgrave, R.A., 1985. "A brief history of fiscal doctrine," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 1, pages 1-59 Elsevier.
    4. Oakland, William H., 1987. "Theory of public goods," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 9, pages 485-535 Elsevier.
    5. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753.
    6. Peter Perkins & Johann Fedderke & John Luiz, 2005. "An Analysis Of Economic Infrastructure Investment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 73(2), pages 211-228, June.
    7. Laffont, Jean-Jacques & Martimort, David, 2005. "The design of transnational public good mechanisms for developing countries," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 159-196, February.
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    Cited by:

    1. Margaret Chitiga & Ramos Mabugu & Hélène Maisonnave, 2016. "Analysing job creation effects of scaling up infrastructure spending in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 33(2), pages 186-202, March.

    More about this item

    Keywords

    infrastructure; South Africa; basic services; transnational;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • N77 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Africa; Oceania
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General

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