*Electronic Theses and Dissertations (PhDs)
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Item Assessing alternative monetary policy frameworks and instruments in selected African economies(2017) Chiumia, Austin BelewaThis thesis contains three core chapters that assess the performance of alternative monetary policy frameworks and instruments in stabilizing 10 selected African economies. Literature and practice show that Advanced Economies (AEs) and Emerging Market Economies (EMEs) are mostly adopting the ination targeting (IT) framework. This framework relies on active use of the interest rate as a policy instrument for macroeconomic stabilisation. Di⁄erent from AEs and EMEs, the majority of African countries are characterized by low nancial market development, frequent supply shocks and volatile terms of trade. These features impede the e¢ ciency of the IT framework and the interest rate instrument. Supply shocks imply that ination is not only demand driven. Volatile terms of trade translate into excessive exchange rate uctuations. Due to these factors, policy practice in Africa remains largely divergent from the global trend. Authorities still rely on monetary aggregate targeting (MAT) with de facto managed exchange rates. However, the MAT framework is also failing to stabilize economies. This follows instability of the key factors, such as the money demand, upon which the framework is anchored. Furthermore, controlling exchange rate movements is a challenge due to weak balance of payments positions. It is not surprising, therefore, that the majority of African economies still remain in the grip of macroeconomic instability. Ination and GDP targets are rarely met and they also remain volatile. The perverse macroeconomic features and the perceived failure of the MAT regime have necessitated the search for alternative monetary frameworks and instruments. In this study, we join the search by specically focussing on three questions. First, given the macroeconomic landscape in Africa, what is the relative performance of the interest rate vis--vis the monetary aggregate as instru ments for macroeconomic stabilization? Secondly, how do these instruments perform when apart from ination and output stabilization, monetary policy also engages in smoothing exchange rate uctuations? Thirdly, what is the relative performance of ination targeting vis--vis nominal GDP targeting as alternative monetary policy regimes for macroeconomic stabilization in African economies? Although the success of monetary policy largely relies on appropriate conguration of monetary policy frameworks and instruments, answers to these questions remain controversial and scanty for African economies. In order to address these questions, we formulate a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. In this model, money is non-separable from consumption in the utility function. We estimate the model using the Maximum Likelihood method with quarterly data mostly from 1990 to 2014. The data is obtained from the International Financial Statistics (IFS). The thesis has ve chapters. Chapter 1 is the general background to the research problem. Chapters 2, 3 and 4 are distinct but related core chapters addressing three specic research questions. Chapter 5 is the conclusion. In Chapter 2, we compare the performance of the monetary aggregate and the interest rate as alternative instruments for stabilizing ination and output in 10 selected countries. Results show that the monetary aggregate is superior in stabilizing 5 economies. In the other 5 countries, it is the interest rate instrument which performs better. In the former group of countries, the monetary aggregate plays a relatively large role in macroeconomic dynamics while in the latter the interest rate is more signicant. These results partly reect di⁄erences in nancial market development between the two groups of countries. Overall, we nd a weak role of the interest rate compared to the monetary aggregate in driving aggregate demand dynamics. The exchange rate is also found to be a key driver of macroeconomic dynamics. Our re v sults suggest three things: First, authorities in Africa need to be cautious of a blanket adoption of the interest rate as a sole monetary policy instrument. Second, authorities will nd it di¢ cult to stabilize economies using the interest rate based frameworks. Third, exchange rate stability is key to macroeconomic stability in Africa. In Chapter 3, we extend the authoritiesobjective function. In addition to minimizing ination and output volatility, authorities also use the interest rate or money supply rules to smooth exchange rate uctuations. The results show that macroeconomic performance is enhanced when authorities smooth exchange rate uctuations in 4 of the 10 countries. The gains from exchange rate smoothing mostly arise from a reduction in ination and exchange rate volatility but not fromoutput. In the other 6 countries, exchange rate smoothing worsens macroeconomic performance. These results reect the fact that the exchange rate exerts a relatively large inuence in macroeconomic dynamics in the rst group of countries compared to the latter. Exchange rate smoothing therefore minimizes the pass-through of the exchange uctuations to ination and output leading to better performance. Overall, the ndings suggest that exchange rate smoothing is harmful in Africa. Where exchange rate smoothing delivers gains, appropriate thresholdsofsmoothingneedtobeobservedtoavoidpolicyinducedmacroeconomic instability. Authorities should also smooth temporal rather that structural shifts in the exchange rate level. In Chapter 4, we compare the performance of ination targeting (IT) vis-vis nominal GDP targeting (NGDPT) as alternative monetary policy frameworks for macroeconomic stabilization. We examine the strict and exible versions of these policy regimes. We also include a hybrid regime which combines elements of IT and NGDPT. Results show that the hybrid regime performs better in 5 countries. In the other 4 countries, it is the strict ination targeting that performs better. In 1 country, exible ination tar vi geting is optimal. The results also reveal that demand shocks dominate but are closely trailed by supply and exchange rate shocks in explaining macroeconomic uctuations. The multiplicity of signicant shocks is key in explaining the dominance of the hybrid regime. The hybrid regime successfully handles shocks that can neither be optimally handled by the IT regime nor the NGDPT regime alone. These results have several implications. First, demand management alone is insu¢ cient to stabilize African economies. Second, identifying dominant shocks is critical for choosing robust monetary policy regimes. Third, the multiplicity of signicant shocks implies that choosing monetary policy frameworks and hence macroeconomic management process is more complex for African policy makers. Overall, the results have several policy implications which are outlined in Chapter 5. First, they suggest a cautious approach towards generalized adoption of the interest rate over the monetary aggregate as a monetary policy instrument in African economies. This contradicts the current wave of monetary policy changes sweeping across African countries. Secondly, the signicanceoftheexchangeraterenderscredencetoexchangeratesmoothing in Africa. The ndings, however, suggest that exchange rate smoothing can either enhance or worsen macroeconomic performance. Where it enhances macroeconomic performance, authorities must carefully consider the thresholds of smoothing to avoid creating macroeconomic instability. Authorities need not ght structural shifts in exchange rates levels through smoothing. This would help to preserve the shock absorbing role of the exchange rate. Finally, the prevalence of demand, supply as well as exchange rate shocks makes the hybrid monetary policy regime which combines elements of IT regime as well as NGDPT regime to perform relatively better in stabilizing the majority of the economies. Given the multiplicity of shocks, authorities inAfricaneedtocomplementdemandmanagementwithpoliciesthataddress supply side and exchange rate bottlenecks to ensure sustainable macroeco vii nomic stability. Overall, the ndings suggest that there is scope to improve monetary policy performance in Africa by adopting suitable frameworks and instruments. The results also highlight the problem of tackling monetary policy issues with a "one size ts all" approach.Item A Multi-dimensional framework for adopting Physical Address System in a developing country(2017) Ditsela, JeofreyThis thesis is about the adoption of an Information System (IS) at a country level. Information Systems literature addresses adoption of IS at an individual level, organisational level or national/country level. Each level of analysis has its own complexities. However, literature acknowledging these varied complexities has not been forth coming. That is, literature has more studies done at either individual or organisational, and hardly at national or country level. This thesis argues that the adoption of an information system (also referred to as an innovation) at country level is a multi-dimensional and multi-level phenomenon. Existing literature and previous studies have hardily addressed fully, this complexities and multi-dimensionalism, although it has been noted that countries experience and internalise the innovation adoption, as a social process, differently. The study was on a developing country adopting a Physical Address System (PAS), herein seen as an IS innovation. In this thesis, PAS is seen as a social system comprising of artefacts (digital and visual representations), physical world, residents and organisations as stakeholders. The goal of the study was to conceptualise a multi-dimensional framework for adopting a Physical Address System, in the context of a developing country. Since the thesis argument is that the adoption of IS at a country level is even more complex, varied theories were employed as lenses to tackle the various aspect of the study. These lenses are the Diffusion of Innovation, the Stakeholder Theory, Upper Echelon Theory and the Contextualist Approach. Following the interpretivist philosophy, a case study was employed as a research strategy, using Botswana as a developing country case. The research design included semi-structured interviews with stakeholders, observations, policy documents. The data was analysed, discussed, synthesised and interpreted using thematic framework analysis method. Informed by the empirical evidence and the existing literature, this thesis conceptualises that the adoption of the Physical Address System ought to be done sensitive to the developing country as a multi-dimensional social system. This multi-dimensional social system includes the roles of stakeholders, determinants of innovation and context. The contribution of the thesis is in four folds; theoretical, methodological, practical, and contextual. Theoretically, the thesis conceptualised a multi-dimensional framework for the adoption of the Physical Address System in a developing country. Methodologically, the thesis contributed by following an interpretive philosophy and a case study as appropriate for understanding the complexities of adopting an information system, employing a case. Practically, the thesis, through the framework, may inform practitioners with ways to adopt a physical address system. Contextually, the thesis gives insight into the uniqueness of a developing country adopting an information system. Keywords: Developing Country, Adoption, Physical Address System, Stakeholder Theory, Upper Echelon Theory, Diffusion of Innovation, ContextItem Rail infrastructure developments and their productivity impact with special reference to institutions in five Southern African development community countries(University of the Witwatersrand, Johannesburg, 2023) Dzawanda, Bernard; Ferddeke, Johanes W.; Mahonye, NyashaThis thesis investigates the determinants of rail infrastructure investment and its impact on productivity growth in Botswana, Namibia, South Africa, Zambia and Zimbabwe for the period 1960 to 2018. The descriptive analysis of rail infrastructure data covers the period from 1939 to 2018. With the exception of South Africa, data availability limited the study analytics to start from 1960. The five Southern African Development Community (SADC) countries share a common history in terms of development, and their rail networks are interconnected. The focus of the study is on the quantity of rail infrastructure. Based on the augmented Bond, Mairesse, and Mulkay (1997) investment model, we apply the Pooled Mean Group estimator of Pesaran, Shin and Smith (1999) on novel datasets of rail infrastructure measures to estimate the drivers of rail infrastructure investment and efficiency in Botswana, Namibia, Zambia and Zimbabwe. Estimation results suggest that economic, geostrategic and institutional factors drive rail infrastructure investment, efficiency and productivity growth in the four countries. GDP is found to have an insignificant impact on rail infrastructure investment. South Africa being distinctly different from the other four countries provides a different contextual setting to investigate the determinants of rail infrastructure investment and efficiency, and its impact on productivity growth. We separately apply time series analysis in the case of South Africa using the Bounds Test technique of Pesaran, Shin and Smith (2001). Estimation results suggest that GDP has a significant negative impact on rail infrastructure investment in South Africa. Government investment has a significant negative impact on rail infrastructure investment. Research results suggest that geostrategic factors have a significant positive impact on rail infrastructure investment in the four countries, and insignificant on rail infrastructure efficiency except in the case of passenger rail infrastructure investment where the impact is negative. In contrast, geostrategic factors have an insignificant impact on rail infrastructure investment in South Africa except for mixed rail infrastructure investment where the impact is negative. The impact of geostrategic factors on rail infrastructure efficiency in South Africa is found to be positive.Item Social reproduction, labour markets, and economic change in South Africa(University of the Witwatersrand, Johannesburg, 2023) Francis, David Campbell; Valodia, ImraanThe South African rural economy, and its relationship to the industrial economic heartlands, has been the focus of study for many decades. In the 1970s, Harold Wolpe provided an incisive materialist analysis of apartheid. He argued that the rural economy served as a site of the reproduction of labour for capitalism in urban South Africa, thus ensuring a supply of cheap labour. His cheap labour thesis has formed the backbone of political economy analysis in South Africa ever since. But Wolpe, and other such as Mike Morris, who studied the relationship between the rural economy and the development of capitalism in South Africa, were largely unconcerned with the highly gendered nature of cheap labour, despite the fact that women were actively excluded from mining and the industrial economy by law, and played a critical role in the reproduction of life and labour in the Bantustans. Following the end of apartheid, the legal barriers preventing women from working in the main economy were dismantled, and women’s labour force participation rose rapidly. But this legal equality has not translated into substantive equality: women in rural areas continue to be significantly worse off economically than men. Unemployment rates are significantly higher for women, and they earn lower wages than men, even where they do the same work. Women continue to undertake far more unpaid work than men, and girl and women-headed households are more likely to live in poverty. Furthermore, despite well-developed literature on South Africa’s political economy, we know little about the productive and reproductive lives of rural women in contemporary South Africa. This thesis critically re-examines Wolpe for the 21st century by providing a materialist, gendered analysis of the economy of Agincourt, Mpumalanga, an area which remains on South Africa’s geographic and economic periphery. It shows how households in this part of rural South Africa are responding to the ways in which capitalism in South Africa has changed in the post-apartheid period. This thesis illuminates the important links between labour force participation, paid work, unpaid work, and livelihood strategies among households in the Agincourt area. It argues that focusing on the role of South Africa’s rural areas as sites of the reproduction of labour, as per the cheap labour thesis, ignores the highly gendered nature of social reproduction and its contribution to the reproduction of both labour and life. This thesis further contends that the role of South Africa’s rural areas cannot be investigated or theorised without a specifically gendered approach which includes women’s work in the analysis. It adds to our knowledge about an area of South Africa which is important in its own right. And Agincourt is also emblematic of the conceptual and methodological challenges of studying rural areas and their relationship with the economic 8 heartlands of urban South Africa in a way that does not marginalise the economic lives of women. It further contributes methodologically and epistemologically to studying the intersection of paid and unpaid work. It draws on a mixed-methods approach – a household survey of 600 households and 24 in-depth interviews – to investigate women’s economic lives in this marginalised place, and to re-examine the relationship between South Africa’s economic core and its periphery from an explicitly gendered perspectiv