Ph.D. (Economics) / The main objective of this study is to assess the role of the informal sector in the economy of the Democratic Republic of Congo (DRC) by assessing its linkage with the formal sector. An attempt to assess the linkage between the formal and informal sectors was carried out by using quantitative techniques that range from the construction of a Social Accounting Matrix (SAM) to the building of a Computable General Equilibrium (CGE) model to assess the impact of each of the sectors in the DRC economy. A new SAM that incorporates formal and informal sector is constructed whereby different techniques and methodologies are applied. The data sources and techniques used to build the SAM and CGE model are described. The DRC Formal Informal Sector Model (DRCFIM) is constructed based on ORANI model of the Australian economy. The generic edition of the model, ORANI-G, developed for CGE modellers was constructed by Horridge (1998). The model has a theoretical composition which is typical of a static Applied General Equilibrium (AGE) model. Nonetheless, one particularity of the DRCFIM is that it is a multi-sectoral CGE model that depicts the reflected structure of the DRC’s formal and informal sectors along with a diversity of linkages between various economic agents such as government, investors, traders and enterprises. DRCFIM is used to perform two policy simulations. The first policy simulation assessed the impact of land use on the DRC economy and the second is on trade liberalisation. In tracing the impact of the land use subsidy shock, output rises and domestic prices decline in most sectors, indicating considerable efficiency and lower costs per unit of output. Land use subsidy raises output in most sectors, stimulating the real GDP to rise by 0.34 and 0.26 percent in the short and long run respectively. Concerning the second policy simulation, we only allowed the import price to decrease by 5 percent in the model. As we would expect, gross domestic product, exports and employment rise when the import price on products is reduced by 5 percent in the short run.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:12490 |
| Date | 07 October 2014 |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
| Rights | University of Johannesburg |
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