No abstract

Background: The aim of many public policies is to change behaviour. Governments tend to rely on regulations, taxes and subsidies to effect such change. These measures, which affect agents' economic incentives, have a mixed record. A key insight of the New Institutional Economics is that the efficacy of such formal institutions depends on the strength of their enforcement and the extent to which they are compatible with prevailing informal institutions.Aim: This article uses the road safety situation in South Africa as a case study to explore aspects of the relationships among formal institutions, law enforcement and informal institutions.Setting: South Africa has a strong suite of road safety laws but poor road safety outcomes. Methods:The article draws on ideas about the relationships between formal institutions, law enforcement and informal institutions to undertake a case study of the road safety situation in South Africa. Results:The article argues that improved law enforcement cannot fully solve the problem; complementary changes to the informal institutions shaping the behaviour of road users are essential. Conclusion:Institutional economists have to take a greater interest in the insights of research in behavioural economics, behavioural and cognitive science and other disciplines in order to provide useful advice in settings where such change is an important policy objective.

This paper discusses the nature and effects of social grants programmes in South Africa against the backdrop of international trends in the reform of social assistance systems. It shows that South Africa has a well-developed social assistance system that significantly reduces extreme poverty, in part because the grants are very well targeted. The review of existing literature and new evidence presented in this paper suggest that the grants influence the behaviour of recipients and potential recipients in various ways, not all of which are necessarily benign. The paper also highlights the scope for further research on the potential of workfare programmes, conditional cash transfer programmes and other innovative social assistance schemes in the South African context.

The accuracy of the National Treasury's projections of GDP and key fiscal aggregates is comparable to that of the projections of private sector economists, other reputable organisations and the fiscal authorities of other countries. The errors in the projections of the National Treasury have nonetheless been substantial in some years, and have increased from 2000/01 to 2010/11. This paper argues that the credibility of fiscal policy would have been severely tested if the largest annual errors in respect of the various aggregates had coincided. Against this backdrop, the paper makes the case for structured bi-annual discussions of government's forecasts during public parliamentary hearings as a mechanism for improving the accuracy and credibility of official projections. It also discusses the potential benefits for South Africa of two alternative mechanisms, namely fiscal councils and committees of independent experts.