Acontecimientos Futuros
ENSEÑABA EN LAS SINAGOGAS de ellos, y era glorificado de todos."
The fundamental growth theory states that by increasing the inputs of labour and capital -- and the resultant productivity -- will lead to economic growth. However, given the financial state of the majority of the SADC members, it is highly unlikely that technological improvement and capital accumulation will be easily achieved. In addition, given the high HIV/AIDS death rate of sub-Saharan Africa, labour increases may not always possible.
The SADC needs to look at improving the ‗wider‘ fundamental determinants of growth. By improving institutions and becoming freer, the SADC will experience economic growth. The exponential relationship between GDP growth and economic freedom will continue to foster growth, once the initial steps towards freedom are taken.
151
Foreign aid is only a temporary lifeline. Simply receiving financial assistance will not spur economic growth. On the contrary, it may actually hamper development prospects. In order to sustain any growth, the SADC needs to develop sound governance, good economic policies and, most importantly, to improve economic freedom.
The SADC needs to focus on establishing an FTA amongst all its member States. All tariffs should be abandoned and trade encouraged amongst the SADC members. This will promote individual countries exporting those goods and services in which they have a comparative advantage, increasing the countries per-capita income and increasing growth. The spillover effect of the increased trade activity will positively benefit the Member States.
Countries that have reduced the direct involvement of government in economic activity show rising rates of growth. The individual SADC Members need to re-assess their central banks to ensure independence and transparency. A country‘s fiscal policy should adopt a less ‗by-the- book‘ approach and allow the market to take its course -- and only intervene as a last resort.
This study has made use of the overall economic-freedom index to study its effects on growth in the SADC. This is a very broad approach, as it has made use of an average of all the different components that make up the economic freedom index. Furthermore, comprehensive research can be undertaken by making use of the individual freedom components and testing their effect on economic growth.
A formal econometric model would have to be built for the SADC, with its emphasis on the components that make up the broader freedom areas. By building a model with the various
152
freedom components acting as the independent variables simultaneously, inferences can be drawn on their individual impact on economic growth, as well as the relationships between themselves.
This will illustrate the relationship of each component ceteris paribus, indicating which freedom components contribute the most to economic growth, which are insignificant, and if any have a negative impact. This will be useful when decisions need to be made about which economic freedom component to improve in order to obtain the optimal results.
153
REFERENCES
Abramovitz, M. 1986, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics.
United Kingdom: Edward Elgar Publishing Limited.
Adelman, I. 1958, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Adsera, A. Boix, C. & Payne, M. 2003, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Ayal, E. & Karras, G. 1998. Components of Economic Freedom and Growth: An Empirical Study. Journal of Developing Areas, vol.32, no. 3, pp. 327-338.
Ayittey, G.B.N. 1999. Africa in Chaos: A Comparative History. New York: St Martin‘s Press.
Baltagi, B.H. 2008. Econometric Analysis of Panel Data. 4th edition. John Wiley & Sons Ltd.
Barro, R.J. 1996, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Barro, R.J. and Sala-i-Martin, X. 2003, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Baumol, W.J. 1990, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics.
United Kingdom: Edward Elgar Publishing Limited.
Burnside, C. & D, Dollar. 1997. World Bank, Policy Research Department, Macroeconomic and Growth Division.
Collier, P. & Dollar, D. 2006. Globalisation, Growth and Poverty.
154
Easterly, W. 2003. Can Foreign Aid Buy Growth? Journal of Economic Perspectives. vol.
17, no. 3, pp 23 – 48.
Florida, R. 2010. Free, Tolerant and Happy. The Atlantic. Available:
http://www.theatlantic.com/international/archive/2010/04/free-tolerant-and-happy/39127/
Friedman, M. 1962, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Friedman, M. 1982. Capitalism and Freedom. Chicago: University of Chicago Press
Granger, C.W.J. 1969. Investigating Causal Relations by Econometric Models and Cross-Spectral Methods. Econometrica, Vol. 37, No. 3, pp 242-438.
Gwartney, J. & Lawson, R. 2009. Economic Freedom of the World: 2009 Annual Report.
Economic Freedom Network.
Gwartney, J.; Lawson, R. & Holcombe, R. 2001. Economic Freedom and the Environment for Economic Growth. Vancouver: Fraser Institute.
Hamilton, J.D. 1994. Time Series Analysis. Princeton University Press. Princeton, New Jersey.
Hill, C.R.; Griffiths, W.E. & Lim, G.C. 2007. Principles of Econometrics. United States of America: John Wiley & Sons.
Kaynes, J.M. 1930, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics.
United Kingdom: Edward Elgar Publishing Limited.
Kennedy, P. 1998. A Guide to Econometrics. 4th edition. UK: Blackwell Publishers Ltd.
155
Knack, S. and Keefer, P. 1995, in Snowdon, B., Vane, H.R. 2005. Modern Macroeconomics.
United Kingdom: Edward Elgar Publishing Limited.
Louw, L. 2006. Habits of Highly Effective Countries: Lessons for South Africa. South Africa: The Law Review Project.
Maleleka, D. 2007. Macroeconomic Convergence in Southern African Development Community. African Economic Conference. 17 November
Masson, P.R. and Pattillo, C. 2005. The Monetary Geography of Africa. Brookings Institute Press. Washington D.C.
Mbola, B. 18 Aug. 2008. SADC launches free trade area, South Africa.info. Available:
http://www.southafrica.info/africa/sadc-fta.htm
Mendenhall, W. and Sincich, T. 2003. A Second Course in Statistics: Regression Analysis. 6th edition. United States of America: Pearson, Prentice Hall.
Miles, M.A.; Holmes, K.R. & O‘Grady, M.A. 2006. Index of Economic Freedom.
Washington, D.C.: The Heritage Foundation and Dow Jones & Company, Inc.
Miller, J. & Holmes, K.R. 2010. Index of Economic Freedom. The Wall Street Journal.
Moinul Islam, A.N.M. and Salimullah, A.H.M. 2006. Effects of Private Investment, Economic Freedom and Openness on Economic Growth: LCD Experience. Asian Affairs. Vol. 28, No. 1, pp 46 – 68
Mrema, S.T. 2008. SADC Economic Integration and Statistical Framework: Issues of Definition, Measurement and Statistical Imrovement. IFC Bulletin. No. 32, pp 123 – 133.
156
North, D.C. 1990, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Office of the United States Trade Representative. 2005. Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act. Available:
http://www.ustr.gov/assets/Trade_Development/Preference_Programs /AGOA/asset_upload_file215_7746.pdf.
Organisation for Economic Co-operation and Development. 2006. International Development Statistics.
Parkin, M. 2005. Economics. 7th edition. United States of America: Pearson, Addison Wesley.
Population data from World Bank. 2006. World Development Indicators. Available:
http://www.worldbank.org/data/onlinedatabases/onlinedatabases.html
Rodrik, D. 2003, in Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
Rossouw, J. 2006. South Africa‘s Role in Macroeconomic Convergence in SADC. Internal documents of the South African Reserve Bank.
SADC. 2010. Available: www.sadc.int/
Schaefer, B.D. 2006. How Economic Freedom is Central to Development in Sub-Saharan Africa. Annual Report.
Snowdon, B. & Vane, H.R. 2005. Modern Macroeconomics. United Kingdom: Edward Elgar Publishing Limited.
157
Studenmund, A.H. 2006. Using Econometrics. 5th edition. United States of America:
Pearson, Addison Wesley.
Vega-Gordillo, M. & Alvarez-Arce, J.L. 2003. Economic Growth and Freedom: A Causality Study. Cato Journal, Vol. 23, No.2, pp. 199-215.
Zyuulu, I. 2008. Convergence in the SADC and African Economic Integration Process:
Prospects and Statistical Issues. IFC Bulletin, no. 32, pp 96 – 105.
158