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In this chapter, the following content will be discussed: Give a brief overview of different views of the role of government in the economy, list key issues confronting Southern African governments regarding their role in the economy, distinguish between the main institutional categories of the public sector, discuss the salient features of and trends in the size and composition of the South African public sector, discuss various aspects of the relationship between the public sector and the rest of the economy.
• • • • • Give a brief overview of different views of the role of government in the economy List key issues confronting Southern African governments regarding their role in the economy Distinguish between the main institutional categories of the public sector Discuss the salient features of and trends in the size and composition of the South African public sector Discuss various aspects of the relationship between the public sector and the rest of the economy • • Impact of the public sector (government) on resource allocation and distribution Market system vs political system – Price is the equilibrating mechanism – Political process addresses needs not satisfied in the market system • • • • • Political equilibrating mechanism: the ballot box Price: tax Features of SA’s current democracy Legacy of the past Fiscal challenges The study of the nature, principles and economic consequences of expenditure, taxation, financing, and the regulatory actions undertaken by the nonprofit making government sector of the economy • • • • Procurement of private funds by the state Enacting a law to allocate private resources Positive economics Normative economics Individualistic Public Interest Developmental State Key characteristic Maximisation of individual welfare Maximisation of social welfare or national interest Combination of individual & social interests Role of Government Correcting market failure Distribution of income Selective intervention Policy Focus Efficiency of resource allocation and economic growth Combating poverty and equity issues Way in which political & economic control is obtained & exercised • • Taxes (direct & indirect) Resource use – General government consumption – Investment: • • • General government Public corporations Transfer payments – Interest on public debt – Subsidies and current transfers • Total public sector resource mobilisation – General government – Public corporations • • • • • • • • Supplier of public goods and services Purchasing power Privatisation Public-private partnerships Taxes and levies Budget imbalance Government borrowing Impact of economy on government ... of the role of government in the economy List key issues confronting Southern African governments regarding their role in the economy Distinguish between the main institutional categories of the. .. the public sector Discuss the salient features of and trends in the size and composition of the South African public sector Discuss various aspects of the relationship between the public sector. .. of the nature, principles and economic consequences of expenditure, taxation, financing, and the regulatory actions undertaken by the nonprofit making government sector of the economy • • • •