The Southern African customs union,cereal price policy in South Africa,and food security in Botswana

It is elaborated in this article that external factors may affect food security in developing countries even if these countries are not exposed to price instability in world food markets. This is the case in the Southern African Customs Union where the agricultural price policy in South Africa affects food security in Botswana, Lesotho and Swasiland. It is analysed quantitatively how cereal price policy in South Africa influenced the cereal import sector of Botswana in the period 1969–84. Cereal import prices increased due to Botswana's membership of the customs union, and cereal imports declined. The price increase was accompanied by a price‐stabilising impact.     

Exchange Rate Pass-through to Import Prices,and Monetary Policy in South Africa

Abstract

Understanding how import prices adjust to exchange rates helps anticipate inflation effects and monetary policy responses. This article examines exchange rate pass-through to the monthly import price index in South Africa during 1980–2009. Short-horizon pass-through estimates are calculated using both single equation equilibrium correction models and systems (Johansen) models, controlling for both domestic and foreign costs. Average pass-through is incomplete at about 50 per cent within a year and 30 per cent in six months, and in the long-run, from the Johansen analysis including feedback effects, is about 55 per cent. There is evidence of slower pass-through under inflation targeting; pass-through is found to decline with recent exchange rate volatility and there is evidence for asymmetry, with greater pass-through occurring for small appreciations.     

The Evolving Role of the Africa Scholar in African Studies

This paper explores – through a geo-political perspective – the changes and continuities in South African foreign policy over the period 1990–2010, focusing on the themes of military relations, migration, democratization, and pan-Africanism. The demise of apartheid led to significant changes in South Africa's relations with southern Africa and the rest of Africa, including: transition of South Africa from pariah state to a key leader of the continent; an end to South Africa's destabilization of its immediate neighbours; transition toward more humane treatment of migrants; and transition toward a commitment to democracy promotion in Africa. Yet, continuities among the apartheid and post-apartheid eras persist, including: the persistence of nationalism and realism as guiding principles; ongoing economic and political constraints imposed by neighbouring countries; the persistence of socio-cultural divisions amongst South African and migrant workers; and overall ambivalence about pan-African identity and policies.     

Overcoming apartheid's legacy: The ascendancy of neoliberalism in South Africa's anti-poverty strategy

Poverty in South Africa is intertwined with a host of social and economic issues. The burden of poverty is exacerbated by limited access to basic services, poor housing, limited employment opportunities and inadequate infrastructure, which are an outcome of the terrible legacies of apartheid. During its first year in office, the ANC-dominated government officially endorsed a policy of 'growth from redistribution', whereby a strong state and a strong market were expected to serve as vehicles for generating growth and reducing poverty and inequality. By 1996, however, the government had embraced a standard neoliberal strategy as a central piece of its anti-poverty strategy. This article examines the potential contradictions between what appears to be on the surface progressive social policy on the one hand, and on the other, the implementation of aggressive neoliberal strategies of privatisation, liberalisation and deficit reduction to stimulate the economy and create jobs. This heavy reliance on market-led solutions is a high risk strategy, since there exists no example internationally where neoliberal adjustment of the sort championed by President Thabo Mbeki and Finance Minister Trevor Manual has produced a socially progressive outcome, especially in a country like South Africa, which is marked by extreme disparity and poverty.     

An econometric model of the monetary sector in Indonesia

The purpose of this article is to develop an econometric model of the Indonesian monetary sector over the period 1969–80. Before we constructed such a model, we tested the hypothesis that there is a causal relationship between money supply and the aggregate price index using quarterly data. The hypothesis of a causal relationship from prices to money was supported while the hypothesis of contemporaneous causality could not be easily dismissed.

In the model, both money supply and the aggregate price index were used as endogenous variables and they were decomposed into several disaggregates. The possibility of a structural break after the oil price shock (post‐1973) was examined using forecasting criteria. The predictive performance for 1969–73 is better than for 1974–80.     

The post-communist left and the European Union: The Czech Communist Party of Bohemia and Moravia (KSČM) and the German Party of Democratic Socialism (PDS)

This article traces the development of two post-communist parties—the Czech KSČM and the German PDS—illustrating how they may continue to shape hard left policy in an expanded European Union (EU). It analyses three policy areas in detail (security and defense policy, employment policy and policies towards the institutional reform of the EU) and argues that, providing the parties avoid internal ideological conflict, they may come to play significant roles in influencing hard left policy in future years. The PDS is likely to act as a bridge for other hard left groups with more conservative agendas while the much larger KSČM may attempt to shift the ideological balance back towards more structurally conservative anti-capitalist policies.     

Addressing the Challenges of Adaptation to Climate Change Policy: Integrating Public Administration and Public Policy Studies

With growing attention on formulating the “right” policies and programs to address climate change, the contribution that policy work will make in fostering adaptive capacity needs to be examined. Policy capacity is crucial to policy formulation and should be at the heart of climate mainstreaming. There are six hypotheses about the nature of climate-based policy work based on a survey conducted of Canadian federal and provincial government employees in the forestry, finance, infrastructure, and transportation sectors. To measure the simultaneous effects on perceived policy capacity, an Ordinary Least Squares regression was conducted. Among the key findings was that the increased demand for climate change science within an organization resulted in a decreased perception of policy capacity. Policy work was largely focused on procedure activities rather than on evaluation. The model found that networking was critically important for perceived policy capacity. Effective policy formulation will involve the participation of others normally not associated with traditional policy work. Evidence-based policy work illustrates that policy success can be achieved by improving the amount and type of information processed in public policy formulation.     

Portfolio Behaviour in a Flow of Funds Model for the Household Sector in India

We estimate a flow of funds model for the household sector in India, within the Almost Ideal Demand System (AIDS) framework, and examine the demand for money and the substitution effects between money and other financial assets. The restricted long-run model, obtained using cointegration techniques, provides stable equilibrium relationship between I(1) variables and broadly satisfies the axioms of rational choice in consumer demand theory. We find that financial sector reform exerts a significant impact on the interest rate structure and household portfolio preferences; specifically, there is strong substitutability among risk-free assets and a possible speculative effect in the stock market, while the exchange rate strongly influences the demand for money. These findings all have important policy implications.     

Price policy,poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.     

Exchange rate policy and price level changes: Casualty tests for Turkey in the post‐liberalisation period

The purpose of the present study is to examine the relationship between exchange rate changes and price level changes in Turkey during the 1980s using some modified Granger causality tests. During this period, Turkish exchange rate policy was characterised by considerable flexibility, in contrast to the long‐standing policy of fixing the exchange rate until a foreign exchange crisis necessitated devaluation. The weight of the evidence presented suggests that Granger causality runs from price level changes to exchange rate changes but that there is not feedback causality from exchange rate changes to price level changes. This conclusion is not altered by the inclusion of a money supply variable. Thus, for Turkey, exchange rate adjustment does not seem to have created a vicious cycle of currency depreciation leading to inflation as is often feared. Whether this result will hold for other developing countries which adopt flexible exchange rate regimes will require further testing.     

The Political Economy of Institutions,Stability and Investment: A Simultaneous Equation Approach in an Emerging Economy. The Case of South Africa

The modern theory of investment identifies the importance of uncertainty to investment. A number of empirical studies have tested the theory on South African time series, employing political instability measures as proxies for uncertainty. This paper verifies that political instability measures are required in the formulation of the investment function for South Africa. It also establishes that there are distinct institutional factors that influence the uncertainty variable such as property rights and crime levels. We find that rising income and property rights lower political instability, and that rising crime levels are positively related to political instability. The inference is that political instability in South Africa may not represent uncertainty directly, since it is systematically related to a set of determinants. Instead, uncertainty would have to be understood as being related to a broader institutional nexus that in concert may generate uncertainty for investors. The paper highlights the significance of getting institutions right to ensure that uncertainty is kept to a minimum by providing a predictable long-term environment. Stability at a systemic level appears crucial if investment rates are to rise in South Africa and this paper demonstrates that stability in turn is driven by a sound institutional environment that has multiple dimensions.     

The bank of italy in the european system of central banks

This article illustrates the legislative and organizational changes affecting the Bank of Italy as a consequence of its participation in the European System of Central Banks (ESCB). The Bank of Italy, while losing its independence in setting national monetary policy, will take part on an equal footing with the other member central banks in setting the single monetary policy for the Union through the participation of its Governor in the Governing Council of the European Central Bank (ECB). The implementation of the single monetary policy and the management of both the exchange rate regime and the official reserves will be decentralized.     

The new diplomacy of the South: South Africa,Brazil, India and trilateralism

In the aftermath of 9/11 surely of great significance is the reassertion of the South – North divide as a defining axis of the international system. In this context the emergence of a coterie of Southern countries actively challenging the position and assumptions of the leading states of the North is an especially significant event. The activism on the part of three middle-income developing countries in particular—South Africa, Brazil and India—has resulted in the creation of a ‘trilateralist’ diplomatic partnership, itself a reflection of broader transformations across the developing world in the wake of globalisation. This article will examine the rise of the co-operative strategy known as ‘trilateralism’ by regional leaders within the South. Specifically it will look at the relationship between emerging regional powers in the context of multilateralism, as well as at the formulation and implementation of trilateralism. As with previous co-operative efforts in the developing world, the prospects of success are rooted in overlapping domestic, regional and international influences on South African, Brazilian and Indian foreign policies. The article will conclude with an assessment of these influences over the trilateral agenda.     

Introduction to a Special Section on ‘Exchange Rate Pass-through in Developing and Emerging Markets’

Abstract

The interest in exchange rate pass-through (ERPT) in emerging market and developing economies has burgeoned in the last two decades. Small, open and trade-dependent economies embody special features that can make it difficult to obtain reliable estimates of ERPT. This Special Section includes a survey of recent research in developing and emerging market countries on ERPT, focusing on the monetary policy relevance of ERPT.

The frequent misspecifications that produce unreliable ERPT estimates are highlighted. Many empirical issues raised in the survey are illustrated by the macro- and the micro-economic empirical studies on South Africa (SA) included in this Special Section, and an earlier published JDS paper on ERPT in SA.     

A practical model for the management of resistance to change: An analysis of political resistance in South Africa

Change is usually accompanied by resistance -- a neglected and not well understood facet of applied O.D. and large social system change efforts. The management of resistance, just as the rest of the change intervention, should be a planned, systematic, continuous and actively managed process.

The model described in this paper supplies an approach to actively manage resistance according to a systematic and methodological plan. In South Africa this model has been used for two purposes: as a practical management strategy for dealing with resistance during O.D.-projects in business, industry and also in other social settings; and for purposes such as research and as a framework to come to grips with resistance of political parties and other interes groups in these times of major political and social changes. This model is explained and then applied to analyse the resistance of various groups to political changes in South Africa.     

The BRICS and global governance: China’s contradictory role

The impact of rising powers generally and the BRICS - Brazil, Russia, India, China and South Africa - in particular on the existing global order has become controversial and contested. Donald Trump’s nationalist foreign policy agenda has raised questions about the BRICS willingness and capacity to provide leadership in place on an American administration that is increasingly inward looking. As a result, the rise of BRICS poses potential normative and structural challenges to the existing liberal international order. Given its geoeconomic significance, China also poses a potential problem for the other BRICS, as well as the governance of the existing order more generally. Consequently, we argue that it will be difficult for the BRICS to maintain a unified position amongst themselves, let alone play a constructive role in preserving the foundations of ‘global governance’.     

Adding rooms onto a house we love: Central banking after the global financial crisis

This article examines the extent to which central bankers have been willing and able to rethink their beliefs about monetary policy in the wake of the global financial crisis. We show that despite the upheaval, the core pre‐crisis monetary policy paradigm remains relatively intact: central bankers believe that they should primarily pursue price stability through targeting a low inflation rate in a transparent manner, and that they need operational independence in order to achieve this goal. In a bid to address post‐crisis conditions and maintain their credibility, however, central bankers have also layered new elements onto this paradigmatic core. We document both the resilience of pre‐crisis beliefs and the process of layering using computer‐assisted text analysis and qualitative analysis of 13,586 speeches given between 1997 and 2017 by central bankers from around the world.     

How Vulnerable are Arab Countries to Global Food Price Shocks?

Abstract

We estimate pass-through effects of international food price movements into domestic food prices for 18 countries in the Middle East and North Africa, using threshold regressions. International price movements transmit to various degrees into domestic prices. Transmission is mostly asymmetric, pushing domestic price levels up as increases in international food prices are typically passed through, but declines are rarely transmitted. This situation is indicative of policy and market distortions, notably the presence of food subsidies in the context of fiscal constraints. Hence, both international prices and their volatility matter for domestic inflation, yet domestic factors also play a role.     

Improving Industrial Policy Intervention: The Case of Steel in South Africa

We contribute to the lack of tools to support efficient industrial policy-making, especially in the mineral beneficiation policy literature. To address this vacuum, we adapt the product space analysis approach to incorporate an input-output value chain lens. This framework is applied to the case of steel in South Africa to derive novel insights regarding the (in)efficiency of implementing a downstream linkage-based beneficiation policy. Our dynamic analysis approach allows for interactions with the rest of the product space. We find that a ‘leap-frogging’ approach to development within the value chain may be more optimal than a strict beneficiation based industrial policy.