Unemployment, Trade Liberalization and Adjustment in Post-Transition South Africa

Economic theory suggests that trade liberalization rewards relatively abundant factors of production — labor in most economically developing countries. In South Africa, trade liberalization has not benefited the locally abundant factor (unskilled labor). Instead, unemployment remains stubbornly high...

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Published inJournal of Asian and African studies (Leiden) Vol. 44; no. 6; pp. 698 - 718
Main Authors Segal, Michelle, Brawley, Mark R.
Format Journal Article
LanguageEnglish
Published London, England SAGE Publications 01.12.2009
Sage Publications Ltd. (UK)
SAGE PUBLICATIONS, INC
Subjects
Adjustment
Analysis
Apartheid
Developing Countries
Economic factors
Economic models
Economic Theories
Economic theory
Flexibility
Free Trade
Government policy
Labor
Labour market
Land ownership
LDCs
Liberalization
Manual workers
Markets
Ownership
Post-apartheid society
Production factors
Public policy
South Africa
Trade
Trade liberalization
Unemployment
Unionization
Unskilled workers
South Africa
unemployment
South Africa
factor markets
trade liberalization
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Summary:Economic theory suggests that trade liberalization rewards relatively abundant factors of production — labor in most economically developing countries. In South Africa, trade liberalization has not benefited the locally abundant factor (unskilled labor). Instead, unemployment remains stubbornly high. The legacy of apartheid explains this surprising result; apartheid distorted factor markets (including patterns in land ownership, unionization, investment, infrastructural development and more). The gains from trade will remain elusive unless the Government engages in policies targeting flexibility in factor markets to support trade adjustment. ANC governments have introduced some policies along these lines, but have refrained from taking on certain politically powerful constituencies within their own party.
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ISSN:0021-9096
1745-2538
DOI:10.1177/0021909609350041