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CID Working Paper No. 129

South Africa’s Export Predicament

Ricardo Hausmann and Bailey Klinger

August, 2006

A publication of the CID South Africa Growth Initiative

Abstract

This paper explores export performance in South Africa over the past 50 years, and concludes that a lagging process of structural transformation is part of the explanation for stagnant exports per capita. Slow structural transformation in South Africa is found to be a consequence of the peripheral nature of South Africa’s productive capabilities. We apply new tools to evaluate South Africa’s future prospects for structural transformation, as well as to explore the sectoral priorities of the DTI’s draft industrial strategy. We then discuss policy conclusions, advocating an ‘open-architecture’ industrial policy where the methods applied herein are but one tool to screen private sector requests for sector-specific coordination and public goods.

Keywords: South Africa, structural transformation

JEL codes: 055, F19, O14, O33, O40

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* See also the 7/27/07 Sciencenews article as well as the supplementary materials website.