In this study an analysis of the long-term equilibrium relationship between economic growth measured as real GDP growth and private capital inflows is explored. The link between private capital inflows and economic growth is well-documented in the literature. However, a void in the literature relates to examining the cointegrating relationship between private capital inflows and economic growth particularly for South Africa. It is widely claimed that private capital inflows foster economic growth by closing the savings/investment gap. However, clarity on this point is necessary because of the seemingly unclear nature of the relationship in the literature. The exact form of this relationship as well as the nature of capital flows that could impact on real growth requires further investigation. Moreover, what exactly happens to this relationship in an economic crisis such as recently recorded in the global financial crisis is not clear. The analysis is undertaken by employing cointegration and vector error correction modeling approach using quarterly data for the period 1989q4-2009q4. This study employs the Johansen (1998) cointegration test. This technique distinguishes itself since it establishes the long run relationship between variables. Thereafter, residual diagnostic checks are performed on the variables. Our results show among others, that private capital inflows have impacted positively on the growth of the South African economy. The areas for further research that emerge from this study include the effect of some government policies on economic growth that should also receive more attention in the future since political instability slows down investment.

This study examined the role of export diversification on economic growth in South Africa. The study used annual time series data for the period covering 1980 to 2010 and employed a Vector Error Correction Model to determine the effects of export diversification and possible factors that affect it on economic growth. Possible factors that affect export diversification considered as independent variables in this study include gross capital formation, human capital, real effective exchange rate and trade openness. Results of the study reveal that export diversification and trade openness are positively related to economic growth while real effective exchange rate, capital formation and human capital have negative long run relationships with economic growth. The study recommended the continual implementation of trade liberalisation by the South African government. The South African government is also encouraged to promote the production of a diversified export basket through subsidisation, promotion of innovation and production of new products.

The neoclassical theory suggests that free flows of external capital should be equilibrating and thereby facilitating smoothening of an economy's consumption or production patterns. South Africa has a very low savings rate, making it highly dependent on capital inflows which create instability and volatility in global markets. A policy dilemma is undoubtedly evident: capital inflows help to cater for the domestic low savings and at the same time the inflows pose instability, a threat on competitiveness and volatility challenges to the same economy due to their impact on exchange rates. The question is: are all forms of capital flows equally destabilizing? Since studies based on South Africa considered only the relationship between aggregate capital flows and real exchange rate, modelling individual components of capital flows could enlighten policy formulation even further. The composition of the flows and their effects on the composition of aggregate demand determine the evolution of real exchange rate response to surges in capital flows. Through co-integration and vector error correction modelling techniques applied to South African data between 1990 and 2010, the study found out that foreign portfolio investment exerts the greatest appreciation effect on the South African real exchange rate, followed by other investment and finally foreign direct investment. Thus the impact of capital flows on real exchange rate in South Africa differs by type of capital. This presents varied policy implications.

The aim of this study was to examine the effectiveness of a capacity development programme initiated by the Department of Economic Development and Environmental Affairs (DEDEA) as a mechanism to enhance the performance of the employees in order to improve service delivery to the people of the Eastern Cape. The public service is enjoined by the Constitution to provide services that citizens need, and for this reason it is in need of educated, trained and professional public servants, especially in the technical, professional and managerial categories. The department also recognized the potential of public–private partnerships (PPPs) to improve performance in the areas of transformation and service delivery, and that it required investments aimed at developing and strengthening public management capacity. However, the effectiveness of the PPP as a mechanism for capacity development, remained unknown. The literature reviewed overwhelmingly supported the assertion that human capital development is critical for performance in the public service. The review also highlighted the importance of partnerships, especially the role of the private sector in the area of capacity development, advancing the argument that PPPs should be pursued in order to leverage ideas, resources, and capabilities to achieve public service goals. Various research tools, namely interviews, questionnaires and document analysis were used to conduct the study. Data collected and analysed provided empirical evidence of improved performance of both the individual managers and the department in the functional areas of financial governance and management; programme and project management; as well as ethics and professionalism. It suggested a strong correlation between training, capacity development and service delivery. This research found the DEDEA/National Business Initiative (NBI) PPP initiative, as a capacity development mechanism to enhance the performance of the department‟s employees, effective. On strength of the overwhelming evidence gathered through this research, it strongly recommends that the programme be rolled out to other employees.

This study examined the impact of real exchange rates on economic growth in South Africa. The study used quarterly time series data for the period of 1994 to 2010. The Johansen cointegration and vector error correction model was used to determine the impact of real exchange on economic growth in South Africa. The explanatory variables in this study were real exchange rates, real interest rates, money supply, trade openness and gross fixed capital formation. Results from this study revealed that real exchange rates, gross fixed capital formation and real interest rates have a positive long run impact on economic growth, while money supply and trade openness have a negative long run impact on economic growth in South Africa. From the regression results, it was noted that undervaluation of the currency significantly hampers growth in the long run, whilst it significantly enhances economic growth in the short run. As such, the policy of depreciating the exchange rates to achieve higher growth rates is only effective in the short run and is not sustainable in the long run. Based on the findings of this study, the researcher recommended that misalignment (overvaluation and undervaluation) of the currency should be avoided at all costs. In addition, the results of the study showed that interest rates also have a significant impact on growth and since interest rates have a bearing on the exchange rate, it was recommended that the current monetary policy in South Africa should be maintained.

Institute for Rural Development / PhDRDV

MPM / Olive Tambo Institute of Governance and Policy Studies

Institute for Rural Development / PhDRDV

Department of Geography and Geo-Information Sciences / MENVSC / The focus of the study is on the comparative assessment of Rural Development Programmes between Sidou and Malavuwe Village within Ward 22 of the Thulamela Municipality. The study aims to investigate the gap that exists between effective programme implementation and less effective programme implementation in rural areas. To achieve this, the study uses Malavuwe Village as a control village and Sidou Village as an experiment village. The study found that there was a discrepancy in service delivery between the two villages; more services were delivered effectively at Malavuwe than at Sidou Village. The study further investigates the causes of this discrepancy in service delivery between the two villages and also suggests feasible approaches that can be employed by the Thulamela Municipality to enhance programme implementation and service delivery within the study area. The study found that Sidou Village lacked community services such as clinics, high schools, community halls, sporting facilities and income generating community projects. On the contrary, Malavuwe Village had most community services. Based on the findings of the study, it is recommended that the Thulamela Municipality should ensure thorough provision of services and encourage community participation through consultation and partnership at Sidou Village. Such an approach will be bottom-up and will encourage community members at Sidou Village to be actively involved in the prioritisation and implementation of vital services, thus raising the socioeconomic conditions and infrastructure development in the village

MPM / Oliver Tambo Institute of Governance and Policy Studies / See the attached abstract below