What can economists do with South Africa's SAMs?

Abstract

The South African Central Economic Advisory Service has recently published a report containing social accounting matrices for the economy as a whole, and for eight planning regions. This article provides a critical evaluation of these SAMs.

The Black states are includes in the SAMs, and the national SAM identifies seven income categories, four race groups, and ten occupational categories. Interindustry transactions are portrayed in a twenty‐four sector inter‐industry matrix. The regional SAM includes an analysis of racial incomes, and interregional flows of transfers from households, and trade and government transfers. A paradoxical result is that African migrant workers, who often hold the lowest occupations, appear in the top decile of the distribution of African incomes in the national SAM. The SAMs do not identify rural households, African households, in the rapidly growing fringe settlements around the metropolitan regions, and informal sector activities, and the article argues that these SAMs provide a snapshot of the economy which is severely out of focus.

The SAMs are based on a 1978 input‐output table and 1980 expenditure patterns. Since then changes in wage levels, the strength of Black unions, and the exchange rate of the Rand may have caused significant alterations in certain coefficients in the economy, possibly making the SAMs unsuitable for modelling policy changes.

Notes

Institute of Economics and Statistics, University of Oxford.