Forecasting investment needs in South Africa's electricity and telecommunications sectors

The authors use a panel-data set for the period 1980-2002 to estimate demand for electricity and telecommunications services and project investment needs in South Africa through 2010 for two growth scenarios. Projections of average annual investment needs in electricity and telecommunications for the current growth scenario (3.6 percent a year) are of the order of 0.2 percent and 0.75 percent of GDP, respectively. An alternative, accelerated growth scenario (6 percent a year) implies approximate doubling of investment needs in these sectors.Economic Theory&Research,Investment and Investment Climate,Banks&Banking Reform,Achieving Shared Growth,ICT Policy and Strategies

Infrastructure and growth in South Africa : direct and indirect productivity impacts of 19 infrastructure measures

Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks.The authors demonstrate that controlling for potential endogeneity of infrastructure in estimation robustly eliminates virtually all evidence of ambiguous impacts of infrastructure, due for example to possible overinvestment in infrastructure. Controlling for the possibility of endogeneity in the infrastructure measures renders the impact of infrastructure capital not only positive, but of economically meaningful magnitudes. These findings are invariant between the direct impact of infrastructure on labor productivity, and the indirect impact of infrastructure on total factor productivity.Transport Economics Policy&Planning,Economic Theory&Research,Public Sector Economics&Finance,Economic Growth,Inequality

International benchmarking of South Africa's infrastructure performance

The paper provides a first systematic, comprehensive benchmarking of South Africa's infrastructure performance in four major sectors--electricity, water and sanitation, information and communication technology, and transportation--against the relevant group of comparator countries using a new World Bank international data base with objective and perception-based indicators of infrastructure performance from over 200 countries. Specifically, the paper seeks to answer a number of relevant questions: How does South Africa compare on major indicators of infrastructure sector performance against the relevant country groups? What do outcome indicators tell us about the relative strengths and weaknesses of South Africa's infrastructure compared with various income and geographical comparator groups of countries? Where are the largest deviations-positive and negative-from the benchmarks and other comparators? And how does one interpret some of these comparisons to be useful for policy purposes?Infrastructure Regulation,Economic Theory&Research,Income,Poverty Monitoring&Analysis,Economic Conditions and Volatility

Industry Structure and Labour Market Flexibility in the South African Manufacturing Sector: A Time Series and Panel Data Approach

Our investigation of industry structure in South African manufacturing reveals evidence of imperfect competition. We find an average mark-up of 50% for the period 1970 to 2004. Results suggest that there is no consistent trend in the mark-up over time. This paper extends the analysis of industry structure by linking it to labour market flexibility. We infer the proportion of labour cost that is fixed rather than flexible from the mark-up, and find that two thirds of total labour employed in South African manufacturing is devoted to fixed costs. We find that this proportion falls during the 1980s and rises during the 1990s, suggesting an increase in labour flexibility followed by a decrease.Mark-up, industry structure, labour market flexibility

Do Conservative Justices Favor Wall Street: Ideology and the Supreme Court\u27s Securities Regulation Decisions

The appointment of Supreme Court justices is a politically-charged process and the ideology (or judicial philosophy ) of the nominees is perceived as playing a potentially relevant role in their future decision-making. It is fairly easy to intuit that ideology somehow enters the analysis with respect to politically divisive issues such as abortion and procreative rights, sexual conduct, freedom of speech, separation of church and state, gun control, procedural protections for the accused in criminal cases, governmental powers. Many studies have tackled the question of the relevance of the ideology of the justices or appellate judges on these issues, often finding a correlation between policy preferences and decisions. This Paper fills a gap in the existing literature examining the correlation between ideology and judicial decision-making in the highly technical area of securities regulation. To put it more provocatively, we address the question if conservative justices are more pro Wall Street , and liberal justices more pro investors. Since the enactment of the securities laws in the 1930s, the Supreme Court has decided a significant number of cases in this field. Even if the regulation of financial markets might seem less politically-charged than some of the issues mentioned above, we argue that there is meaningful room for political ideology and policy preferences in deciding these cases. The Paper is organized as follows. First we offer a brief overview of the different systems used for the selection of the judiciary, focusing in particular on the appointment of Supreme Court Justices, but considering also other systems. We underline the relevance of political considerations in the selection process, which could influence the ideology of selected judges and justices. We also discuss more analytically the space that judicial interpretation can have in the area of securities regulation, and we summarize the existing literature on the correlation between the ideology of judges and justices and their positions on the bench, including measures of the elusive concept of ideology . The core of our study, and its most important contribution, is in the second part. A first section is dedicated to the methodological approach followed in collecting and coding the data used, explaining issues such as the selection of the cases considered for the empirical analysis, and the coding of the decisions and of the position of the justices on the political spectrum. Several interesting and complex issues, and some judgment-calls, are discussed in this part. For example, different authors have taken diverging positions on whether an active market for control and hostile takeovers are beneficial to investors, or whether rigorous insider trading prohibitions are desirable for fostering efficient markets. We take the position that both takeovers and insider trading protect investors, and we coded the cases we examined accordingly. Finally, we present the major empirical results. Our data confirm that, even using different definitions and measures of ideology , conservative justices are more pro Wall Street and free markets , and liberal justices are more pro investors and regulated markets , more concerned about market failures, and more in favor of private plaintiffs or government intervention. We also use the data collected to explore other questions. For example, we consider if and how the pro-market attitude of the Court correlates with the evolution of some general economic variables (i.e., if in times of economic growth and bullish markets justices tend to be more free-marketers ). We also examine when justices are more consistent in their decisions in this area, when the Court was more divided, and which Courts of Appeals are more often overruled by the Supreme Court.Two caveats are important. First, we do not associate any negative implication with the fact that ideology plays a role in deciding hard cases. Obviously this does not in any way imply that the justices distort the law in order to achieve pre-determined policy goals, but simply that, when the law is ambiguous, different and legitimate interpretative approaches and policy considerations might lead to different outcomes. Second, while the data indicate a meaningful correlation, the correlation does not entirely explain the decision-making of the justices, therefore confirming the independence and prestige of the Supreme Court and its members

Economies of Scale and Pension Fund Plans: Evidence from South Africa

The focus of this paper is on the presence of economies of scale in administering pension funds. We make use of a unique dataset with extensive information on South African retirement funds from 1996 to 2006. For almost fifty years now, South Africa has operated under a system with small social security beneÂ…ts but with considerable options and freedom to long-term savers. The dataset contains aggregate information for various fund types, fund classes, as well as different benefit structures. Estimates of a translog cost function provide evidence of unused economies of scale in the industry. We also find that established funds have a substantial cost-advantage over young funds.Economies of scale; DeÂ…ned contribution; Pay as you go; Learning-by-doing; Annuitization

Do Conservative Judges Favor Wall Street? Ideology and the Supreme Court\u27s Securities Regulation Decisions

The appointment of Supreme Court justices is a politically-charged process and the “ideology” (or “judicial philosophy”) of the nominees is perceived as playing a potentially relevant role in their future decision making. It is fairly easy to intuit that ideology somehow enters the analysis with respect to politically divisive issues such as abortion and procreative rights, sexual conduct, freedom of speech, separation of church and state, gun control, procedural protections for the accused in criminal cases, and governmental powers. Many studies have tackled the question of the relevance of the ideology of the Justices or appellate judges on these issues, often finding a correlation between policy preferences and decisions. This Article fills a gap in the existing literature examining the correlation between ideology and judicial decision-making in the highly technical area of securities regulation. We address the question if “conservative Justices” are more “pro Wall Street,” and “liberal Justices” more “pro investors.” Our results confirm that, even using different definitions and measures of ideology, conservative Justices favor “free and less regulated markets,” and liberal Justices are more protective of investors, especially small investors, more concerned about market failures, and more in favor of private plaintiffs or government intervention. Two caveats are important. First, we do not associate any negative implication with the fact that ideology plays a role in deciding “hard cases.” Obviously our study does not in any way imply that the Justices distort the law in order to achieve predetermined policy goals, but simply that, when the law is ambiguous, different and legitimate interpretative approaches and policy considerations might lead to different outcomes. The best guarantee of good decision-making is not an abstract aspiration to a completely apolitical adjudicator, but in a diverse composition of our courts. Second, while the data indicate a meaningful correlation, the correlation does not entirely explain the positions of the Justices, therefore confirming the independence and prestige of the Supreme Court and its members

Do Conservative Justices Favor Wall Street: Ideology and the Supreme Court\u27s Securities Regulation Decisions

The appointment of Supreme Court justices is a politically-charged process and the ideology (or judicial philosophy ) of the nominees is perceived as playing a potentially relevant role in their future decision-making. It is fairly easy to intuit that ideology somehow enters the analysis with respect to politically divisive issues such as abortion and procreative rights, sexual conduct, freedom of speech, separation of church and state, gun control, procedural protections for the accused in criminal cases, governmental powers. Many studies have tackled the question of the relevance of the ideology of the justices or appellate judges on these issues, often finding a correlation between policy preferences and decisions. This Paper fills a gap in the existing literature examining the correlation between ideology and judicial decision-making in the highly technical area of securities regulation. To put it more provocatively, we address the question if conservative justices are more pro Wall Street , and liberal justices more pro investors. Since the enactment of the securities laws in the 1930s, the Supreme Court has decided a significant number of cases in this field. Even if the regulation of financial markets might seem less politically-charged than some of the issues mentioned above, we argue that there is meaningful room for political ideology and policy preferences in deciding these cases. The Paper is organized as follows. First we offer a brief overview of the different systems used for the selection of the judiciary, focusing in particular on the appointment of Supreme Court Justices, but considering also other systems. We underline the relevance of political considerations in the selection process, which could influence the ideology of selected judges and justices. We also discuss more analytically the space that judicial interpretation can have in the area of securities regulation, and we summarize the existing literature on the correlation between the ideology of judges and justices and their positions on the bench, including measures of the elusive concept of ideology . The core of our study, and its most important contribution, is in the second part. A first section is dedicated to the methodological approach followed in collecting and coding the data used, explaining issues such as the selection of the cases considered for the empirical analysis, and the coding of the decisions and of the position of the justices on the political spectrum. Several interesting and complex issues, and some judgment-calls, are discussed in this part. For example, different authors have taken diverging positions on whether an active market for control and hostile takeovers are beneficial to investors, or whether rigorous insider trading prohibitions are desirable for fostering efficient markets. We take the position that both takeovers and insider trading protect investors, and we coded the cases we examined accordingly. Finally, we present the major empirical results. Our data confirm that, even using different definitions and measures of ideology , conservative justices are more pro Wall Street and free markets , and liberal justices are more pro investors and regulated markets , more concerned about market failures, and more in favor of private plaintiffs or government intervention. We also use the data collected to explore other questions. For example, we consider if and how the pro-market attitude of the Court correlates with the evolution of some general economic variables (i.e., if in times of economic growth and bullish markets justices tend to be more free-marketers ). We also examine when justices are more consistent in their decisions in this area, when the Court was more divided, and which Courts of Appeals are more often overruled by the Supreme Court.Two caveats are important. First, we do not associate any negative implication with the fact that ideology plays a role in deciding hard cases. Obviously this does not in any way imply that the justices distort the law in order to achieve pre-determined policy goals, but simply that, when the law is ambiguous, different and legitimate interpretative approaches and policy considerations might lead to different outcomes. Second, while the data indicate a meaningful correlation, the correlation does not entirely explain the decision-making of the justices, therefore confirming the independence and prestige of the Supreme Court and its members

Multinational corporations' capital allocation decisions across asymmetric risk locations : intertemporal equilibrium and optimal transitional adjustment paths

Multinational corporations operate across locations with different risk profiles. We examine how multinational corporations address the optimal allocation of capital across multiple locations and analyse the transition path to the intertemporal equilibrium. Our model considers returns, risks and adjustment costs to reflect the dynamics of allocating capital assets across locations over time, as well as the mix of assets across locations in equilibrium. Variational calculus is employed to show that the model confirms standard expectations that where a location’s rates of return on assets increase, or adjustment costs decrease, equilibrium capital allocation and transitional capital flows to that location will increase. Symmetrically, rising (falling) risk increases (decreases) the proportion of the capital asset holdings of a location. The crucial insight is that for the transitional dynamics to intertemporal equilibrium, the optimal relative capital flow response to changes in risk can generate relative portfolio allocations that may initially move in the opposite direction to that implied by the stock equilibrium. Specifically, an increase in risk for the high-risk location may initially result in an increase in the relative capital asset flow to the high-risk location relative to the low-risk location. Empirical research must account for the possibility of non-monotonicity in asset allocation flows to avoid misspecification. Moreover, policy makers will have to anticipate possible pressure for reversal resulting from short-term worsening capital flows. These reflections are mirrored in recent research calls for separating structural and transition effects of institutional change on the investment decisions by multinational corporations.https://academic.oup.com/imamanhj2024Gordon Institute of Business Science (GIBS)SDG-09: Industry, innovation and infrastructur