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- Respectively Professor, Department of Economics, University of Munich; and Lecturer, Department of Economics and Economic History, University of Port Elizabeth. The authors would like to thank Charles Simkins, Ros Hirschowitz, Debbie Budlender, Estelle de Jager, Annette Myburgh, Bala Rajaratnam, Richard Ketley and the participants of a workshop held at the University of Pretoria for helpful discussion, comments and suggestions. They would also like to thank the two anonymous referees. Funding from the British Department for International Development in support of this work is gratefully acknowledged.