On the impact of provincial development policies in South Africa

ABSTRACT

Although South Africa is one of the biggest economies in Africa, poverty and income inequality persist and a vast number of households lack access to water and sanitation services. Provincial governments have implemented the Provincial Development and Growth Strategy to improve standards. We evaluate its effects on selected development indicators. Using a generalisation of the Difference-in-Differences method, we study the effects on four development indicators: food security, economic well-being, and water and sanitation security. We use secondary data from the General Household Survey, collected between 2002 and 2017 and conclude that (i) the policies improve development indicators; (ii) the effects are heterogeneous across racial and geographic distributions of households. Long-term economic stimulators, such as employment opportunities and education for vulnerable communities, are needed to improve household welfare across the provinces. Programmes emanating from these development policies should be ongoing and continuously adapted to fulfil the specific needs of the local groups.

KEYWORDS:

• Provincial development and growth strategies
• provincial poverty reduction strategies
• development indicators
• difference-in-Differences
• roll-out-of programme approach

JEL:

• O12
• O38
• Q18

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The PGDS is a long-term policy framework and not a cash transfer, it provides basis and implementation of development programmes within the province. For mor information: http://toolkit.cidb.org.za/Shared%20Documents/PG1-S05%20PGDS%20Guidelines%202005-07.pdf.

2 In this paper, cash transfer programs are considered as short-term policies, although the provision may last up to several years, the provision of transfers is relatively contingent compared to structural interventions and reforms.

3 A different strand of literature, rapidly growing in the agricultural economics literature, focuses on econometric models for observational data (El Benni et al., 2023). For recent applications the interested readers may refer to Bystricky et al. (2023) or Santeramo et al. (2023), among other papers collected in the Q-Open Special Issue Evidence-based agricultural and food policy – the role of research in policy-making.

4 Water Security given by 1 if distance between household and main water source is less than 200m and 0 otherwise. Toilet Security given by 1 if distance between household and toilet is less than 50m and 0 otherwise.

5 The Indian interaction effect was omitted due to collinearity. Coloured people are a multiracial ethnic group native to Southern Africa.