The extent of anti-export bias in the South African economy during the 1990s

Abstract

An analysis of trade incentives in the South African economy during the 1990s reveals two major findings. Firstly, the extent of the anti-export bias in South Africa's trade policy during the 1990s is less than is claimed in the empirical literature. The sectors subjected to an anti-export bias accounted for around 7 per cent of total output in 1990 and 21 per cent in 1999. Secondly, sectoral output growth did not strongly correlate with the prevailing trade incentives of the 1990s. Export production continued despite the prevalence of import substituting incentives in many sectors. Although further research is needed, this suggests that attention should also be given to other factors related to domestic competitiveness (e.g. skills development, productivity enhancement, competition policy, etc.) and market access if South African export production is to be significantly increased.

The views expressed in this article do not necessarily reflect those of the South African Reserve Bank. I am grateful to Greg Farrell (SARB) and an anonymous referee for comments on an earlier draft. Any errors are, of course, my own.