Abstract

Using data from two surveys evaluating South Africa's investment climate that were administered by the World Bank, I found evidence suggesting that there exists a relationship between perceptions of managers with regard to labour regulations and firm performance. Firms whose managers perceived labour regulations to be burdensome performed worse than other firms. They grew more slowly and were less likely to invest their profits in the establishment than other firms.
There is also evidence suggesting that where firms perceive labour regulations to be burdensome, they will substitute away from the conventional employment contract (regular or permanent contract) towards more atypical employment contracts (temporary or part-time contracts) which have a lower regulatory burden. There is evidence that also suggests firms are not limited in their ability to substitute towards this atypical employment despite limits imposed by South Africa's labour legislation. I found no evidence to suggest that firms who find labour regulations to be burdensome will choose to substitute away from labour towards capital.

About the Speaker

Dinga Fatman is an economist at TIPS. He joined TIPS in 2011 to provide research assistance in the industrial development pillar. He is in the process of completing his Master's degree in Economics at the University of KwaZulu-Natal. His Masters dissertation topic was entitled: “Labour Regulations and Firm Performance in South Africa”. Dinga's general research interests involve South Africa's investment climate issues.

Stephen Timm is a South African policy researcher and journalist who has written on small business and entrepreneurship for almost 10 years. Between 2003 and 2010 he wrote for Big news, a free sheet newspaper aimed at small business owners. He has since also written on small business for a number of other business publications, including Business Day, Business Report and Entrepreneur magazine. He currently writes for the government's news agency BuaNews, where he reports from Parliament. He has also travelled to four emerging countries in the last two years to research programmes and policies that the South African government can learn from to bolster support to small enterprises. Earlier this year he presented a research report, funded by the Department of Trade and Industry and economic think-tank Trade and Industrial Policy Strategies (TIPS) on what South Africa can learn from Chile and Malaysia to boost support to small businesses. The report was a follow up to a research report he presented last year for TIPS titled, How to boost support from small business: Lessons from Brazil and India. Timm also won the Africa SMME Award for Journalist of the year in 2005. He has a higher diploma in journalism from Rhodes University and a History Hons from UCT. He lives in Cape Town.

As Public Employment Programmes (PEPs) gain popularity as social safety nets the world over, there is very little that speaks to the problem of measuring their impact on local economic development (LED), yet this is a key part of the policy case for programmes such as the Community Work Programme in South Africa.

On further examination, this lack of methodological clarity seems to apply to impact evaluation of LED interventions in general – and is not confined to the context of public employment programmes.

This paper provides a scoping study of a range of methodologies currently in use, and assesses their strengths and weaknesses in relation to different dimensions of local economic development.

Please join us to discuss the paper and to contribute to the debate on this issue.

Ellen Hagerman has nearly 10 years of experience working on regional economic development issues including trade, infrastructure, food security and governance. She has worked for the Canadian International Development Agency (CIDA) for 13 years as a Program Manager and Senior Analyst and has covered a diversity of other issues including corporate social responsibility and global environmental issues. While at the Canadian High Commission in South Africa representing CIDA's regional program for Southern and Eastern Africa, she was responsible for managing CIDA support to the African Peer Review Mechanism, the African Capacity Building Foundation, Southern African Trust and Southern African AIDS Trust. She also led two donor working groups on HIV/AIDS and food security and was the donor representative on two working committees linked to the Comprehensive African Agricultural Development Program (CAADP). Ellen is also a professional facilitator and has facilitated sessions on human rights, gender equality and intercultural communications as well as recent meetings on HIV/AIDS, health and food security. Ellen recently completed a research paper on the challenges to regional infrastructure in Africa for DBSA and is working as a research fellow at TIPS providing advice and undertaking research on issues related to regional economic development.

Glen Robbins is a part time Researcher at the School of Development Studies, University of KwaZulu-Natal and freelance consultant specialising in regional and local economic development with a focus on regional and city economic development strategies, infrastructure planning and financing and trade and industrial policy. Previously he headed up the Economic Development and City Enterprises functions in the eThekwini Municipality (Durban). Since 2003 he has been involved in teaching and research at the School of Development Studies and has contributed journal articles and book chapters on subjects ranging from municipal infrastructure investment to industrial policy and local economic development. He has also authored and co-authored reports for the Cities Alliance, UNCTAD, ILO and other multi-lateral bodies. In recent years he has worked with UNCTAD on a range of research projects in Southern and Eastern Africa and has recently completed a report, together with David Perkins, on infrastructure and mining investment in Tanzania and Mozambique for the Making the Most of Commodities Project coordinated at the University of Cape Town and the Open University (UK).

Francis Fay is Deputy Head of Unit in DG Agriculture and Rural Development of the European Commission, in the unit for Africa, Caribbean and the Pacific, G20/G8 and FAO. He has been closely associated with the development of agricultural product quality policy, including the protection in the EU of geographical indications. Francis is also part of the EPA negotiation teams with each African region. He formerly worked on the US and Cabada desk in agriculture. He has a background in agri-environment policy and read law at Trinity College, Dublin in Ireland.

Dr. Robert Kirk is Senior Vice President at AECOM International Development and was until recently the Chief of Party at the Southern African Trade Hub.

Robert, who is an expert in the area of trade policy analysis, has extensive experience in regional trade policy. He was formerly a policy advisor to the SADC Secretariat and served as an advisor to the Ministry of Finance in Swaziland on the SACU renegotiations (1995-2000).

Dr. Kirk has published on the new Southern African Customs Union Agreement, on rules of origin, on Non Tariff Barriers in Eastern and Southern Africa.