Doctor of Philosophy / Department of Economics / William F. Blankenau / This dissertation encompasses three essays on the macroeconomics of human capital and economic growth. Below are the individual abstracts for each essay. Essay 1: Does Public Education Spending Increase Human Capital? I investigate the effect of public education spending on the quality of human capital as measured by international student test scores in science and mathematics, conditional on the efficiency of a country's governance. Combining World Bank country level data on government efficiency with rich micro data from the OECD PISA-2009, I estimate a human capital production function from student level data. Prior work suggests that public education expenditures are inconsequential for student achievement. I illustrate that public education spending matters for student test scores when one uses student level data instead of aggregate country level data. These results are robust to controlling for governance measures such as corruption control and regulatory quality. An implication is that less efficient government does not preclude improving test scores through education spending. Essay 2: Inequality of Opportunity in Education: International Evidence from PISA. I provide lower-bound estimates of inequality of opportunity in education (IEO) using micro-data from the Programme for International Student Assessment (PISA). The measure represents variation in student mathematics test scores which can be explained by predetermined circumstances (including parental education, gender, and additional community variables). I explore the heterogeneity of the measure at the top and bottom of the test score distribution, and demonstrate that IEO accounts for 10 percent of the variation in test scores for students at the top and bottom of the test score distribution. Using this inequality measure I establish three main conclusions. (1) IEO decreases overall in response to an increase in preprimary enrollment rates. An implication here is that improvements in early childhood education might mitigate the effects of IEO factors for some students. (2) IEO increases in a manner which relates to overall inequality. This indicates the possibility of a more general persistence to inequality factors. An implication is that equity-based education policies can be a key tool for reducing income inequality. (3) There is evidence of an equity-efficiency tradeoff in education. An implication here is that public education policies aimed at reducing IEO might hinder overall education efficiency, in that it decreases academic achievement for some groups of students. Essay 3: Public Education Spending and Economic Growth: The Role of Governance. Although the theoretical literature often connects public education spending to growth, individual empirical findings sometimes conflict. In this paper I propose that inefficiencies in public education spending might explain these inconsistencies. Using a dataset from both developed and developing countries observed over the period of 1995 to 2010, I demonstrate that the efficiency of public education spending on growth depends on a country's level and quality of governance. I also find evidence that increasing educational spending is associated with higher economic growth only in countries that are less corrupt. These findings have important implications for the formation of effective education policies in developing countries. They illustrate that efficient public education spending augments economic growth in a way that increased spending alone does not match.

This study was initiated to evaluate the level of integration between infrastructure- and spatial planning at local government level in South Africa. Municipalities have been given a constitutional obligation to provide their communities with effective and efficient municipal services. Most if not all of these municipal services require adequate infrastructure to be delivered in a sustainable manner. In addition, infrastructure has been identified as being an enabler of economic growth and development by providing a foundation on which economic and social interaction can occur. The planning of infrastructure is therefore of absolute importance. Additionally, ‗Green Infrastructure‘1 has increasingly been viewed as a means to create sustainable human settlements with numerous benefits. Unfortunately, it seems that the important task of infrastructure planning has not been receiving the necessary attention at municipal level especially in rural municipalities. This has resulted in both over and under provision of infrastructure in certain areas. As physical infrastructure lays down influential structural elements that can last for centuries, it is proposed that infrastructure be planned in conjunction with strategic spatial planning in a structured manner. This research will determine the feasibility of such integration at municipal level by scrutinising the existing spatial planning system on local government level while considering the infrastructure planning system. The spatial planning system in South Africa has undergone several paradigm shifts over the past number of decades; altering from a master planning approach that was too rigid to adapt to any sudden form of change, to a more conceptual approach drawing on abstract elements such as nodes and corridors. The South African Presidency has commissioned at least two departments with the task of integrated infrastructure planning on a national level. The first is the National Planning Commission (NPC), and the second is the Department of Performance Monitoring and Evaluation (DPME). The former develops long term integrated development plans for all sectors including infrastructure and produced the National Development Plan (NDP) as a long-term vision for South Africa up to 2030, while the latter is dedicated to the advancement of economic infrastructure. Although the focus of this study is on local government level, cognisance must be taken of national and provincial government policy and guidelines. The practice of spatial planning in South Africa is done on three levels of government as set out in the Constitution (Act 108 of 1996); national, provincial and local. Spatial planning on a local level is additionally subject to various other forms of policy and legislation including the Municipal Systems Act (No 32 of 2000) which instructs local government to undertake integrated development planning for their area of jurisdiction. This function involves the creation of an Integrated Development Plan (IDP), which must link, integrate and co-ordinate plans from all sectors within the municipality. Such IDP must additionally include a Spatial Development Framework (SDF) which must give form to the long term spatial vision of the IDP. Infrastructure planning on a local level is subject to various institutional arrangements that are aimed to facilitate the large number of role players involved such as service authorities and service providers amongst others. Municipal infrastructure is therefore divided into different categories relating to the scale and function thereof. Firstly, municipal infrastructure is divided into civil and electrical infrastructure where the former consists of roads, water and sanitation infrastructure amongst others and the latter consists of infrastructure concerned with facilitating electricity generation, transmission and distribution. Civil infrastructure can additionally be divided into bulk, connector and internal infrastructure where bulk is larger in scale and normally situated outside formal urbanised areas, leading down to internal infrastructure which is designed to serve individual properties. The division in electrical infrastructure is normally only made between bulk and reticulation, where the latter includes both internal and connector infrastructure. As in the case with conventional infrastructure, green infrastructure is made up of a large variety of different elements and is practiced on various scales. These scales distinguish between the ownership and responsibility of such green infrastructure. The appropriate level of involvement of local government in green infrastructure practices is fairly uncertain as many municipalities do not make provision for green infrastructure in their development plans. This study makes several proposals on how to incorporate both conventional and green infrastructure into strategic plans. Such proposals include but are not limited to the introduction of an administrative framework aimed at intergovernmental co-operation, the introduction of lower-order spatial plans as well as the introduction of a multi-disciplinary planning team. / MArt et Scien (Urban and Regional Planning), North-West University, Potchefstroom Campus, 2014

A volatile real exchange rate and high unemployment rate is a growing concern in South Africa, therefore the right macroeconomic policy is required. The challenge is to find stability in the real exchange rate paired with a low inflation rate, both of which are necessary to promote long term economic growth, which in turn creates more job opportunities. This study analyses the impact of the exchange rate on unemployment in South Africa by considering quarterly data for the period 2003 to 2013. In this study, the macroeconomic transmission channel is divided into two transmission paths, imports and exports. These find their roots in the Phillips curve and the Keynesian theory on unemployment respectively. The vector error correction model (VECM), together with an analysis of the impulse response functions and variance decompositions, are implemented to determine the short and long run impacts of the exchange rate on unemployment. After the completion of a variety of specifications, estimations and tests, both macroeconomic transmission paths revealed in the empirical analysis that the real exchange rate has a significant impact on unemployment. In the imports transmission path, the real exchange rate, imports and the CPI have significant long term relationships with unemployment. Furthermore, the exports transmission path found significant short term relations with unemployment in considering the real exchange rate, exports and economic growth. The impulse responses in both transmission paths indicated that a shock in the exchange rate will have a significant effect on unemployment in the short run. Similar results were found with the variance decomposition. In the import transmission path, movements in the real exchange rate explained an increasing portion of the variance in unemployment. Alternatively, in the export transmission path the real exchange rate and exports explained an increasing portion of the variance. The evidence therefore suggests that South Africa should focus more on stabilising the exchange rate, since fluctuations in unemployment are a result of shocks in the real exchange rate, following the macroeconomic transmission channels discussed. / MCom (Economics)--North-West University, Vaal Triangle Campus, 2015

This study was initiated to evaluate the level of integration between infrastructure- and spatial planning at local government level in South Africa. Municipalities have been given a constitutional obligation to provide their communities with effective and efficient municipal services. Most if not all of these municipal services require adequate infrastructure to be delivered in a sustainable manner. In addition, infrastructure has been identified as being an enabler of economic growth and development by providing a foundation on which economic and social interaction can occur. The planning of infrastructure is therefore of absolute importance. Additionally, ‗Green Infrastructure‘1 has increasingly been viewed as a means to create sustainable human settlements with numerous benefits. Unfortunately, it seems that the important task of infrastructure planning has not been receiving the necessary attention at municipal level especially in rural municipalities. This has resulted in both over and under provision of infrastructure in certain areas. As physical infrastructure lays down influential structural elements that can last for centuries, it is proposed that infrastructure be planned in conjunction with strategic spatial planning in a structured manner. This research will determine the feasibility of such integration at municipal level by scrutinising the existing spatial planning system on local government level while considering the infrastructure planning system. The spatial planning system in South Africa has undergone several paradigm shifts over the past number of decades; altering from a master planning approach that was too rigid to adapt to any sudden form of change, to a more conceptual approach drawing on abstract elements such as nodes and corridors. The South African Presidency has commissioned at least two departments with the task of integrated infrastructure planning on a national level. The first is the National Planning Commission (NPC), and the second is the Department of Performance Monitoring and Evaluation (DPME). The former develops long term integrated development plans for all sectors including infrastructure and produced the National Development Plan (NDP) as a long-term vision for South Africa up to 2030, while the latter is dedicated to the advancement of economic infrastructure. Although the focus of this study is on local government level, cognisance must be taken of national and provincial government policy and guidelines. The practice of spatial planning in South Africa is done on three levels of government as set out in the Constitution (Act 108 of 1996); national, provincial and local. Spatial planning on a local level is additionally subject to various other forms of policy and legislation including the Municipal Systems Act (No 32 of 2000) which instructs local government to undertake integrated development planning for their area of jurisdiction. This function involves the creation of an Integrated Development Plan (IDP), which must link, integrate and co-ordinate plans from all sectors within the municipality. Such IDP must additionally include a Spatial Development Framework (SDF) which must give form to the long term spatial vision of the IDP. Infrastructure planning on a local level is subject to various institutional arrangements that are aimed to facilitate the large number of role players involved such as service authorities and service providers amongst others. Municipal infrastructure is therefore divided into different categories relating to the scale and function thereof. Firstly, municipal infrastructure is divided into civil and electrical infrastructure where the former consists of roads, water and sanitation infrastructure amongst others and the latter consists of infrastructure concerned with facilitating electricity generation, transmission and distribution. Civil infrastructure can additionally be divided into bulk, connector and internal infrastructure where bulk is larger in scale and normally situated outside formal urbanised areas, leading down to internal infrastructure which is designed to serve individual properties. The division in electrical infrastructure is normally only made between bulk and reticulation, where the latter includes both internal and connector infrastructure. As in the case with conventional infrastructure, green infrastructure is made up of a large variety of different elements and is practiced on various scales. These scales distinguish between the ownership and responsibility of such green infrastructure. The appropriate level of involvement of local government in green infrastructure practices is fairly uncertain as many municipalities do not make provision for green infrastructure in their development plans. This study makes several proposals on how to incorporate both conventional and green infrastructure into strategic plans. Such proposals include but are not limited to the introduction of an administrative framework aimed at intergovernmental co-operation, the introduction of lower-order spatial plans as well as the introduction of a multi-disciplinary planning team. / MArt et Scien (Urban and Regional Planning), North-West University, Potchefstroom Campus, 2014

A volatile real exchange rate and high unemployment rate is a growing concern in South Africa, therefore the right macroeconomic policy is required. The challenge is to find stability in the real exchange rate paired with a low inflation rate, both of which are necessary to promote long term economic growth, which in turn creates more job opportunities. This study analyses the impact of the exchange rate on unemployment in South Africa by considering quarterly data for the period 2003 to 2013. In this study, the macroeconomic transmission channel is divided into two transmission paths, imports and exports. These find their roots in the Phillips curve and the Keynesian theory on unemployment respectively. The vector error correction model (VECM), together with an analysis of the impulse response functions and variance decompositions, are implemented to determine the short and long run impacts of the exchange rate on unemployment. After the completion of a variety of specifications, estimations and tests, both macroeconomic transmission paths revealed in the empirical analysis that the real exchange rate has a significant impact on unemployment. In the imports transmission path, the real exchange rate, imports and the CPI have significant long term relationships with unemployment. Furthermore, the exports transmission path found significant short term relations with unemployment in considering the real exchange rate, exports and economic growth. The impulse responses in both transmission paths indicated that a shock in the exchange rate will have a significant effect on unemployment in the short run. Similar results were found with the variance decomposition. In the import transmission path, movements in the real exchange rate explained an increasing portion of the variance in unemployment. Alternatively, in the export transmission path the real exchange rate and exports explained an increasing portion of the variance. The evidence therefore suggests that South Africa should focus more on stabilising the exchange rate, since fluctuations in unemployment are a result of shocks in the real exchange rate, following the macroeconomic transmission channels discussed. / MCom (Economics)--North-West University, Vaal Triangle Campus, 2015

The case study explores how leveraging on experience, risk and control can be used to enhance a late-entrant globalisation strategy.

The relationship between financial development and economic growth is an important issue for both developed and developing countries through which the extent of economic growth and the sophistication of the country’s financial markets are linked. The research studies the existence of a relationship between financial development and economic growth using a sample of BRICS and G-7 countries for the period of 1996 to 2013. The study objective was to conduct a comparative analysis of the relationship between financial development and economic growth within BRICS and G-7 countries. A panel data analysis was used to analyse secondary data from 5 BRICS countries (Brazil. Russia, India, China and South Africa) and G-7 countries (Canada, France, Germany, Great Britain, Italy, Japan and United States).Variables used include, economic growth, stock market capitalisation, total investment growth, interest rates and population growth. This study found that real interest rates and total investment is positively related to economic growth in both BRICS and G-7; while other variables such as stock market size, do play a significant role in explaining economic growth in both BRICS and G-7 countries and insignificant variables such as population growth. Findings of this study suggests there are no major difference between developed and developing countries with regards to their financial development and economic growth. This study may assist BRICS and G-7 countries to improve their economic growth structure and financial development systems over time.

The relationship between financial development and economic growth is an important issue for both developed and developing countries through which the extent of economic growth and the sophistication of the country’s financial markets are linked. The research studies the existence of a relationship between financial development and economic growth using a sample of BRICS and G-7 countries for the period of 1996 to 2013. The study objective was to conduct a comparative analysis of the relationship between financial development and economic growth within BRICS and G-7 countries. A panel data analysis was used to analyse secondary data from 5 BRICS countries (Brazil. Russia, India, China and South Africa) and G-7 countries (Canada, France, Germany, Great Britain, Italy, Japan and United States).Variables used include, economic growth, stock market capitalisation, total investment growth, interest rates and population growth. This study found that real interest rates and total investment is positively related to economic growth in both BRICS and G-7; while other variables such as stock market size, do play a significant role in explaining economic growth in both BRICS and G-7 countries and insignificant variables such as population growth. Findings of this study suggests there are no major difference between developed and developing countries with regards to their financial development and economic growth. This study may assist BRICS and G-7 countries to improve their economic growth structure and financial development systems over time.

In this thesis we statistically measure if normative and cultural-cognitive institutions moderate the relationship of entrepreneurship and economic growth when the entrepreneurial activity is rooted in different motivations. The types of entrepreneurship which we are measuring, in relation to economic growth, are opportunity- and necessity entrepreneurship. By reviewing the literature we found a general agreement regarding the effect of opportunity entrepreneurship on economic growth while the opinions on necessity entrepreneurship are disparate. Taking institutional theory as the basis for moderation fills in several gaps of the existing literature such as using different types of institutions at the same time or fulfilling the demand for cross-country time series study in both entrepreneurship and institutional research. Regulative institutions are taken into consideration when choosing the countries for analysing. Trust, as a proxy for social capital, is used to measure the moderating effect of normative institutions whilst Power Distance Index and individualism are the measures of cultural-cognitive institutions. Relying on secondary data we used an Ordinary Least Square regression and a repeated measures model for analysis.   In line with previous research we found that opportunity entrepreneurship does not have a significant positive correlation with economic growth, when the effect is measured through the productivity enhancement of labour and technology. Necessity entrepreneurship displayed a significantly negative effect. Furthermore, our results did not show any effect when moderating the different motivations for entrepreneurship with trust, power distance or individualism. At the end of our thesis we elaborate on the possible reasons for our findings and suggest some directions for further research.   The thesis contributes to entrepreneurship research with filling the gaps of cross-country, time series study and providing empirical evidence for the existing theories. It enables to gain a deeper understanding of the relationship of entrepreneurship and economic growth. Regarding institutional research, our thesis places some emphasis on the positive effects of institutional dimensions with relations to entrepreneurial context. It would be very interesting to see more research into the negative aspects of institutions to not only understand what fosters productivity of e.g. innovation and labour, but also burdens it.

What are the main macroeconomic factors that help understand economic growth in Brazil since 1870? Are institutions (and changes in institutions) a deep cause of economic growth in Brazil? Are these effects fundamentally and systematically different? Does the intensity and the direction (the sign) of these effects vary over time, in general and, in particular, do they vary with respect to short- versus long-run considerations? This thesis tries to answer these questions focusing on within country over long periods of time. It uses the power-ARCH (PARCH) econometric framework with annual time series from 1870 to 2003. The results suggest that financial development (domestic and international) exhibit the most robust first-order effects on growth and its volatility. Political instability, trade openness and public deficit play important yet secondary roles since the effects of the first two do not extent to the long-run (that is, they are restricted to the short-run) and those off the latter are sensitive to the measures of the variables used in our analysis.