Is ANC using its incumbency advantage to retain power: an investigation of political budget cycles in South Africa.

Maningi, Panashe Gabrielle
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Incumbent governments tend to induce political budget cycles (PBCs) during election years by increasing consumption spending just before an election and contracting spending thereafter. The research report demonstrates that even though South Africa has a dominant party framework, the African National Congress (ANC) which is the ruling party, has both an incentive and ability to use its incumbency advantage to retain power by creating PBCs on the national level and provincial level. This empirical study which is based on a data set consisting of annual observations of the South African national budget from 2001 to 2019, provides evidence of PBCs on the national level in the budget balance, provincial equitable share and social services, as well as evidence of political revenue cycles in total revenue and tax revenue for the 2004, 2009 and 2019 elections but not 2014. On the provincial level, fluctuations in transfers are detected during election years in all provinces except in the Eastern Cape and North West provinces. I show that the magnitude of PBCs on the national and provincial government levels are more pronounced in the earlier elections and have since decreased suggesting that the ability of the ANC to induce PBCs may be diminishing
A research report presented for the degree of Master of Economic Science to the Faculty Commerce, Law and Management, School of Economics and Finance, University of the Witwatersrand, 2022