Institutional change, property rights and economic performance in post‐apartheid in South Africa

Abstract

This article examines redistributive institutional change in South Africa within the theoretical framework provided by North (1979; 1981; 1991) and Eggertsson (1990). By drawing a distinction between the productive potential of an economy and institutionally feasible production possibilities, we can develop an analytical structure for evaluating how alternative systems of property rights can affect productive activity in South Africa. Although this exercise cannot predict actual outcomes in South Africa, it does accord property rights a central role in a specific theory of institutional change, and accordingly may assist in determining how certain forms of institutional change can influence economic performance in a transitional democracy.

Notes

I should like to thank participants at the ‘Markets and Reform in the New South Africa’ session of the 69th Annual Conference of the Western Economic Association International in Vancouver, Canada, on 2 July, 1994, and especially Professor Philip Black of the University of Cape Town and Professor Zane Spindler of Simon Fraser University, for helpful comments on an earlier draft of the paper. I should also like to thank an anonymous referee for helpful comments on an earlier and longer version of the paper.

Department of Economics, University of New England, Armidale NSW 2351, Australia.