Selected Issues Papers

Growth Benefits of Macro-Structural Reforms in South Africa: South Africa

By Andrea Medici, Elmer Li, Marina Mendes Tavares, Taehoon Kim, Alexis Meyer-Cirkel

March 31, 2025

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Format: Chicago

Andrea Medici, Elmer Li, Marina Mendes Tavares, Taehoon Kim, and Alexis Meyer-Cirkel. "Growth Benefits of Macro-Structural Reforms in South Africa: South Africa", Selected Issues Papers 2025, 023 (2025), accessed April 1, 2025, https://doi.org/10.5089/9798229005784.018

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Summary

South Africa's economic growth has stagnated over the past decade due to entrenched structural rigidities. This paper examines the impact of reforms addressing shortcomings in governance, business regulation, and labor market on output and employment. The analysis quantifies the potential economic gains from narrowing structural gaps in these three areas relative to peer countries. Reforms in governance and business regulation are found to boost medium-term output by up to 9 percent. Complementary labor market reforms could further bolster these gains and enhance employment. These findings emphasize the importance of a well-prioritized reform agenda to unlock South Africa’s growth potential and generate broad-based improvements in living standards.

Subject: Education, Emerging and frontier financial markets, Employment, Financial markets, Labor, Labor force, Labor force participation, Labor markets, Macrostructural analysis, Production, Structural reforms, Total factor productivity, Unemployment rate

Keywords: Business environment, Business regulation, Economic growth, Emerging and frontier financial markets, Employment, Governance, Labor force, Labor force participation, Labor market, Labor markets, Productivity, South Africa, Structural reforms, Structural reforms, Total factor productivity, Unemployment, Unemployment rate

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