This paper uses the 2010/11 Income and Expenditure Survey for South Africa to analyze the progressivity of the main tax and social spending programs and quantify their impact on poverty and inequality.
... See More + The paper also assesses the redistributive effectiveness of fiscal interventions given the resources used. Because it applies the Commitment to Equity methodology, the results for South Africa can be compared with other middle-income countries for which the framework has also been applied. The main results are twofold. First, the burden of taxes -- namely the personal income tax, the value added tax, excises on alcohol and tobacco, and the fuel levy -- falls on the richest in South Africa and social spending results in sizable increases in the incomes of the poor. In other words, for the components examined, the tax and social spending system is overall progressive. Second, for these elements, fiscal policy in South Africa achieves appreciable reductions in income inequality and poverty. Moreover, these reductions are the largest achieved in the emerging market countries that have so far been included in the Commitment to Equity project. Although fiscal policy is equalizing and poverty-reducing, the levels of inequality and poverty that remain still rank among the highest in middle-income countries. Looking ahead, as South Africa grapples with slow economic growth, a high fiscal deficit, and a rising debt burden, addressing the twin challenges of high inequality and poverty will require not only much improved quality of public services, but also higher and more inclusive economic growth.
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Policy Research Working Paper WPS7194 FEB 01, 2015
Inchauste, Gabriela; Lustig, Nora; Maboshe, Mashekwa; Purfield, Catriona; Woolard, Ingrid
This paper tests experiential learning as a debiasing tool against gambling and lottery behavior in South Africa. The study implemented a simple, interactive dice game that simulates worsening winning odds of rolling sixes as more dice are added to the game.
... See More + The analysis exploits two levels of exogenous variation, first from random assignment into the debiasing game, and second from the number of rolls it takes to obtain the sixes. Treated individuals who needed above-median number of rolls to obtain simultaneous sixes are significantly less likely than the control group to gamble or play the lottery in the following year. The converse is true for individuals who needed below-median number of rolls, suggesting a perverse treatment effect among this group. The analysis also finds suggestive evidence that the debiasing affected the sensitivity to varying winning odds. Changes in entertainment utility or risk preferences cannot explain these findings, rather the results are consistent with changes in risk beliefs.
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Policy Research Working Paper WPS7195 FEB 01, 2015
The objective of the Lesotho Highlands-Botswana Water Transfer Study Project is to determine the viability of water resource development options for Botswana to access water from the Lesotho Highlands by assessing engineering, costing, social, legal, environmental, economic and financial information.
... See More + The grant will also provide an important input in support of the broader assessment and analysis of potential impacts associated with climate change in the Orange-Senqu River basin. It links to the ongoing analytical work addressing the Climate Vulnerability of Africas Infrastructure that is focused on river basins across Africa using a climate lense to build on the Africa Infrastructure Country Diagnostic. The Orange-Senqu River basin is one of the seven case studies under implementation. It will also benefit from the proposed Bank executed assessment of climate change in Lesotho under the Global Facility for Disaster Reduction and Recovery (GFDRR) grant program that is looking at sectoral impacts and macro-economic modeling of potential climate change related impacts, including those in the Lesotho highlands.
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This report is the first to examine tourism in Africa comprehensively and regionally and the first to recommend practical, evidence-based measures enabling the sectors economic and development power.
... See More + This gives new impetus to the continents development progress by leveraging tourism in pursuit of lasting poverty alleviation and the creation of significantly more jobs and opportunities for all Africans.
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Publication 88656 JUN 06, 2014
Christie, Iain; Fernandes, Eneida; Messerli, Hannah; Twining-Ward, Louise
The development objective of the River Basin Development Project for Zambezi is to advance preparation of the Batoka Gorge hydro-electric scheme (HES) and strengthen cooperative development within the Zambezi river basin.
... See More + The project comprises of five components. The first component, feasibility studies for the Batoka Gorge HES aims to assess, update, and develop a full bankable feasibility study, complete up to tender design, and documentation for the development of Batoka Gorge HES and associated transmission lines to evacuate the power. The second component, environmental and social assessment for the Batoka Gorge HES aims to evaluate the design for the Batoka Gorge HES and develop the required environmental and social impact assessments (ESIAs), along with environmental management plans (EMPs), resettlement policy frameworks (RPFs), and resettlement action plans (RAPs), as needed, for each infrastructure investment associated with the project. The third component, transaction advisory services for the Batoka Gorge HES objective is to provide legal and financial transaction advice to the Zambezi river authority (ZRA) on the development of the Batoka Gorge HES on the Zambezi River. The fourth component, legal and institutional support to the ZRA aims to carry out a program of activities to enhance the legal and institutional framework for the operation and safety of the Kariba hydropower complex, and enhance the recipient's capacity for water resource management and control within the Zambezi river basin. The fifth component, dam break analysis for the Zambezi river basin objective is to support the ZRA enhance the sustainable development and efficient management of the Zambezi river basin through a collaborative exercise with other dam operators in the Zambezi river basin in undertaking a dam break analysis.
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This report examines the financing gaps for early stage and growth that high-growth technology entrepreneurs are facing in the information and communication technology (ICT), climate technology, and innovative agribusiness sectors in Zambia and Mozambique, with a more regional review of Namibia and Botswana as possible.
... See More + It analyzes the unmet needs of these entrepreneurs - perceived demand and latent demand - as well as the existing sources of supply of private capital for seed and early-stage investment, and defines the adequacy to meet these needs. The report also explores the challenges that angel investors have experienced in the past when attempting to finance early- and growth-stage start-ups in the region and, if and where appropriate, make recommendations relating to infoDev's possible interventions.
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Access to mobile communications has been linked with economic growth and the industry itself boosts local economies by creating high-value direct and indirect jobs.
... See More + As part of its mobile innovation program, infoDev developed the concept of the mobile innovation roadshow with the overall objective to stimulate the development of an innovation and entrepreneurship ecosystem for mobile applications enterprises by introducing business and technical concepts relevant to startups in the mobile industry via a series of short events. The roadshow was developed in partnership between the Southern Africa innovation support (SAIS) program and infoDev. The objective of this practical guide is to provide a tool for interested parties on how to plan, organize, implement, and evaluate a mobile innovation roadshow. The guide presents a generic methodology that can be used in any country context. It provides lessons and best practices based on the experiences of implementing mobile innovation roadshows in four countries in Southern Africa: Mozambique, Botswana, Namibia, and Zambia.
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The development objective of the River Basin Development Project for Zambezi is to advance preparation of the Batoka Gorge hydro-electric scheme and strengthen cooperative development within the Zambezi river basin.
... See More + Some of the negative impacts and mitigation measures include: (1) current occupants of the affected area to establish a basis for the design of the resettlement program and to exclude subsequent inflows of people from eligibility for compensation and resettlement assistance; (2) standard characteristics of displaced households, including a description of production systems, labor, and household organization; and baseline information on livelihoods (including, as relevant, production levels and income derived from both formal and informal economic activities) and standards of living (including health status) of the displaced population; (3) information on vulnerable groups or persons; and (4) provisions to update information on the displaced people's livelihoods and standards of living at regular intervals so that the latest information is available at the time of their displacement.
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For African countries looking to sustain and increase their unprecedented growth rates of recent years, the potential of tourism has not been fully recognized as a vital source of economic and development power that can strengthen and expand the continent's economies.
... See More + With a special analysis of 24 tourism case studies from around the world- spanning Sub-Saharan and North Africa, Asia, Central and Latin America, and the Middle East- this report is a sustainable framework for sustainable tourism in Africa. It identifies policies and institutional approaches for African countries to make tourist industries more competitive and attractive to new investment. The study shows how tourism in Thailand barely existed in the 1960s and yet 40 years later, it employs 15 to 20 percent of the country's workforce; Cancun in Mexico grew from an uninhabited peninsula into one of the most visited resorts in the world in just 35 years. Mozambique has managed a seemingly impossible transformation of its tourism industry. While the benefits of tourism development are many, the possible approaches and strategies for development number even more. This work analyzes persistent constraints and how to resolve them through policy and business reforms that have unleashed tourism potential across other regions of the world. To become competitive worldwide, African governments and the private sector must work together in planning tourism infrastructure, promotion and financing. This report is the first to comprehensively examine tourism in Africa regionally and recommend practical, evidence-based measures enabling the sector's economic and development power. This gives new impetus to the continent's development progress by leveraging tourism in pursuit of lasting poverty alleviation and significantly more jobs and opportunity for all Africans. This report identifies policies and institutional approaches to improve the tourism competitiveness of African countries so they can move up the pyramid. It clearly explains the opportunities and challenges that tourism offers and suggests tourism competitiveness strategies based on tourism economic success stories from across the world.
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Working Paper 81468 JAN 01, 2013
Christie, Iain; Fernandes, Eneida; Messerli, Hannah; Twining-Ward, Louise
This note uses a value chain perspective to show how the cost of complying with regional trade requirements affects agriculture competitiveness and rural incomes.
... See More + On the one hand, phytosanitary rules, product standards, and certification procedures are important to protect human, animal, and plant health. These requirements also help to improve buyer and seller confidence in international markets and can be useful for trade facilitation. Equally, however, it is also clear that every inspection and certification procedure adds to the total cost of trade to the point where trade requirements can become a trade barrier if the policies are not well designed or are poorly implemented. The recent proliferation of mandatory standards for food staples in East Africa is a good example of this where regulators have introduced various product specifications that have little or no bearing on public health and mainly relate to milling outturn and private financial returns.
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Water is increasingly becoming a limiting factor for sustainable economic growth and development in many countries. Its allocation has significant impacts on overall economic efficiency, particularly with growing physical scarcity in certain regions.
... See More + Greater water supply variability further increases vulnerability in affected regions. Water also has become a strategic resource involving conflicts among those who may be affected differently by various policies. This paper analyzes various policy interventions aimed at improving water allocation decisions, using a novel approach that incorporates macro and micro level considerations in a unified analytical framework. The framework facilitates assessment of various linkages among policies and their impacts within individual sectors and economy-wide. Drawing on country based studies in Morocco, South Africa, Turkey, and Mexico, the analysis reveals difficult tradeoffs among various policy objectives, including priorities placed on different sectors, regional advantages, and general economic efficiency gains versus broader social impacts. The comparison of policy impacts demonstrates the usefulness of the framework in information that policy makers can use to rank the policy interventions according to the emphasis placed on different policy objectives. The paper also compares approaches used in other studies that apply computable general equilibrium models in various contexts of water, environment and agriculture.
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Policy Research Working Paper WPS6068 MAY 01, 2012
Mozambique, the only Lusophone country covered in the agribusiness indicators initiative, has had a turbulent history since independence. Civil unrest over some 20 years and frequent drought in southern Mozambique, coupled with floods near the many waterways that transect the country (mainly east-west), have inhibited an agricultural transformation.
... See More + Even so, Mozambique could be a regional breadbasket. The country has much potentially usable arable land, along with access to river water for irrigation in many agricultural production zones, particularly in central and northern Mozambique. Sesame, pigeon peas, and cashew exports are significant and rising, not to mention exports of industrial crops such as cotton, leaf tobacco, and sugarcane, yet production of grain and most other food crops remains stagnant. Irrigated area is way below what is possible and needed to increase yields and total agricultural output.
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Swaziland and Lesotho have the highest HIV prevalence in the world. They also share another distinct feature: during the last century, they sent a large numbers of migrant workers to South African mines.
... See More + This paper examines whether participation in mining in a bordering country affects HIV infection rate. A job in the mines means leaving for long periods away from their families and living in an area with an active sex industry. This creates potential incentives for multiple, concurrent partnerships. Using Demographic and Health Surveys, the analysis shows that migrant miners ages 30-44 are 15 percentage points more likely to be HIV positive, and women whose partner is a migrant miner are 8 percentage points more likely to become infected. The study also shows that miners are less likely to abstain or use condoms, and female partners of miners are more likely to engage in extramarital sex. The authors interpret these results as suggesting that miners' migration into South Africa has increased the spread of HIV/AIDS in their countries of origin. Consistent with this interpretation, the association between HIV infection and being a miner or a miner's wife are not statistically significant in Zimbabwe, a country where the mining industry is local and does not involve migrating to South Africa.
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Policy Research Working Paper WPS5966 FEB 01, 2012
Doing business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations.
... See More + It measures and tracks changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. In a series of annual reports doing business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. This economy profile presents the doing business indicators for the Common Market for Eastern and Southern Africa (COMESA). To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator. The data in this report are current as of June 1, 2011 (except for the paying taxes indicators, which cover the period January-December 2010).
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Infrastructure improvements boosted growth in the Southern African Development Community (SADC) by 1.2 percentage points per capita per year during 1995-2005, mainly from access to mobile telephony.
... See More + Road network improvements made small growth contributions, while power sector inadequacy had a negative impact. Infrastructure improvements that matched those of Mauritius, the regional leader, could boost regional growth performance by 3 percentage points. SADC's 15 member countries include small, isolated economies with island states, a mix of low- and middle-income countries, and larger countries with potentially large economies. The economic geography reinforces the importance of regional infrastructure development to create a larger market and greater economic opportunities. The region's infrastructure indicators are high for Africa. The regional road network is well-developed, and surface transport is comparatively cheap, but subject to delays and long-haul fees. An extensive railway system competes directly with road transport. With integration and improvements, SADC's ports could form an effective transshipment network. Air transport, dominated by South Africa, is the best in Africa. Electricity in southern Africa is well developed; the region leads Africa in generation capacity and low rates, but access is limited. ICT services are the most accessible among the regions, though expensive. Landlocked countries still need to be connected, and greater competition is needed to reduce costs. Completing and maintaining SADC's infrastructure will require $2.1 billion annually for a decade. For small countries, and large countries with small revenues, the burden may be insurmountable without external assistance.
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Policy Research Working Paper WPS5898 DEC 01, 2011
This paper investigates the take-up rate or claim-waiting period rate of the unemployed under the South African Unemployment Insurance Fund (UIF) system.
... See More + The goal is to identify disincentive effects that income replacement rates (IRR) and accumulated credits may have on the claimant's behavior in terms of their claim waiting period rate (or how quickly they apply for UIF benefits). Utilizing nonparametric and semi-parametric estimation techniques, we find that there is little evidence, if any, for job disincentives or moral hazard problems. More specifically, the majority of claimants that are quickest to claim the UIF benefits are those who have worked continuously for at least four years and accumulated the maximum allowable amount of credits. The authors also note that claimants' waiting periods are indifferent with regard to levels of income replacements yet extremely sensitive to the amount of credits accumulated. Ultimately, the recipients of the UIF benefits do not rely heavily on the replacement incomes and prefer waiting longer for employment opportunities as opposed to exhausting their accumulated credits. The semi-parametric Cox's Proportional Hazard (PH) model confirms that there is a positive relationship between the claimant's accumulation of credits and the associated take-up rate of the UIF.
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Employment issues are the most serious problems facing South Africa currently. Among these are the problems of unemployment, as well as underemployment or lack of decent work for the already employed, compounded by labour markets that are generally less than efficient in job search and matching.
... See More + Unemployment in South Africa, by narrow standards, is approximately 25 percent, an extraordinarily high level, made even more worrying by its stagnancy or growth at different times over the past decade. However, although such levels of unemployment have detrimental effects on all members of society, they do affect groups differentially. Thus, unemployment rates are consistently, significantly higher for women, Africans, people from rural areas, and the less educated. Unemployment is highest, too, amongst the youth in South Africa, and much higher than international norms, despite rising unemployment amongst youth globally in the past decade. In South Africa, youth is officially defined as people aged between 14 and 35 years old; however, this is not in line with international definitions, which usually demarcate the 16 to 24 year old group. The aim of this paper is therefore to shed some light on the employment process of young South Africans and to investigate firm level responses to the implementation of a targeted hiring voucher for young job seekers aged 20-24. The first section of the paper outlines the conceptual framework used to investigate factors that determine employment of young workers and the impact of a targeted wage subsidy. The second section presents findings from a firm survey illustrating the firm characteristics that are associated with employing young workers and responses to a hypothetical wage voucher. The third section discusses the findings in the light of the theory while the fourth section concludes.
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The Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC) and the Southern Africa Office of the United Nations Economic Commission for Africa (UNECA) working under the Regional Economic Communities Transport Coordinating Committee (REC-TCC) established under the leadership of the Sub- Saharan Africa Transport Policy Program (SSATP) have identified vehicle overload control as one of the priority areas.
... See More + This paper is the third in a series of three publications dedicated to the overwhelming problem of overloaded vehicles damaging roads throughout Africa. The first paper presented the overall problem and related guidelines on developing sound and sustainable control measures based on lessons learned. These lessons learned captured in the second volume are from experiences collected in Namibia, Zambia, Zimbabwe, South Africa and Botswana, four countries where some good practices are emerging that could serve as a platform for wider replication in the Eastern and Southern Africa (ESA) region. The selection of these countries to be used as case studies was based on a previous survey carried out in some 18 countries representing four Regional Economic Communities (SADC, COMESA, ECOWAS and CEMAC).
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Working Paper (Numbered Series) 66940 MAY 01, 2011