The study uses annual time series data from the South Africa Reverse Bank (SARB) from 1980 to 2020 to examine the effectiveness of fiscal policy on economic growth in South Africa. The Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root tests, as well as the Johansen Co-integration test, Granger causality test, and Vector Auto-Regression (VAR) method, were used in the study. Real GDP per capita (RGDP) is used as proxy of economic growth and gross fixed capital formation (GFCF), government expenditure (GEXP) and government deficit (GOVD) as the proxies of fiscal policy. The ADF test results show that all variables are stationary at the first difference, with the exception of GFCF and GEXP, which are stationary at I(0), whereas the PP test results show that all variables are stationary at I(1), with the exception of GEXP, which is stationary at I(0). At Maximum Eigenvalue, the four variables are not cointegrated. The findings of the Granger causality test demonstrated a unidirectional causation from GOVD to RGDP, as well as a bidirectional causality from RGDP to GFCF and GEXP. Error Correction Model Estimated using VAR shows that GFCF, GEXP have positive effect on RGDP whereas GOVD has a negative effect on RGDP in the short run. The findings also presented that the VAR's residuals are homoscedastic, which means they are normally distributed and have no serial correlation.

This study aims to explore the link between public investment and private investment in South Africa, using time series data spanning 40 years (1980–2020). Private investment is subdivided into credit to private sector (CPS) and foreign direct investment (FDI). Several econometric methodologies were used in the study, including the unit root test, cointegration test, and Error Correction Method (ECM). The Phillips-Perron (PP) test results point out that all the variables are stationary at levels with the exception of public investment (PI) which is stationary at first difference. The co-integration test reveals that the variables have a long-run equilibrium relationship. According to the findings of the ECM, public investment has a negative relationship with private investment (as measured by credit to private sector and foreign direct investment). The conclusion implies that in South Africa, public investment crowds out private investment. Other results revealed that, RGDP crowds in credit to private sector while crowding out foreign direct investment. Finally, the ECM findings show that government consumption expenditure crowds out credit to private sector and foreign direct investment. The residuals are homoskedastic and show no serial correlation, indicating that the model is adequate, according to the test for adequacy.

This study examined the link between tax revenue components and economic growth in South Africa, utilizing time series data for the period of 22 years. The stationarity of the variables was established using the Phillips-Perron (PP) unit root test, and the existence of long-run and short-run equilibrium conditions was tested using the Autoregressive Distributed Lag (ARDL) model. As a proxy for economic growth, the study used the real GDP growth rate as the dependent variable, with company income tax, personal income tax, taxes on international trade and transactions, taxes on income, profits, and capital gains tax, foreign direct investment, inflation, and gross savings as the independent variables. According to the PP findings, none of the variables are integrated at a higher order than one, i.e. (1). All variables are found to be cointegrated, and all explanatory variables have a long-run link with economic growth. According to the ARDL findings, company income tax, personal income tax, and taxes on international trade and transactions all have a positive long-run and short-run link with economic growth, whereas capital gain tax, foreign direct investment, and gross savings all have a negative long-run and short-run link with economic growth. The long-run coefficient is negatively related to RGDP, while the short-run coefficient revealed a positive link between inflation and economic growth, among other findings. Heteroskedasticity and autocorrelation are not present in our model, according to diagnostic tests. The CUSUM and CUSUMSQ values indicate that the model is structurally sound.

No abstract

The purpose of the study is to empirically analyze the effect of quality of governance on tax revenue in South Africa. This is done by analyzing a time series dataset covering 1996 to 2020. The study used voice and accountability, regulatory quality, government effectiveness, control of corruption, political stability and rule of law as proxies of quality of governance. Multiple regression analysis was performed to test hypotheses. Based on the regression results, all quality of governance variables in South Africa have a negative effect on tax revenue except corruption control. The findings of this study also include policy recommendations. The government of South Africa must design and implement effective ways to combat poor governance, which results in a tax revenue shortfall.