Masters Degrees (Economics)

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Browsing Masters Degrees (Economics) by browse.metadata.advisor "Du Plessis, Sophia"

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    The importance of beliefs in shaping divergent economic outcomes
    (Stellenbosch : Stellenbosch University, 2021-12) Visser, Michiel van Breda; Siebrits, F. K. (F. Krige); Du Plessis, Sophia; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH SUMMARY : This thesis articulates the case for beliefs as a fundamental cause for divergent long-run development. This beliefs-centred approach is a synthesis of institutional and culture-based explanations of economic growth. New Institutional Economics provides the high-level incentive-based framework, while cultural primacy literature provides the necessary elucidations for hypothesising the channels of causality from beliefs to divergent decision-making across nations. The stated purpose of this thesis is (1) to inquire whether the relationship between beliefs, culture and economic outcomes can be analysed systematically, and (2) to provide examples of how particular beliefs could influence economic decision-making. In response, this thesis (1) briefly discusses the three recognised general causes of growth in economic literature, (2) provides a review of prominent narratives on the effect of culture on divergent development outcomes, (3) qualitatively investigates real-world anecdotes where different beliefs have had an observable effect on outcomes, (4) provides a rationale for investigating beliefs in economics and discusses the conception of beliefs in the Neoclassical model, (5) provides a theoretical framework for analysing the effect of beliefs (namely New Institutional Economics) and describes an individual-level cognitive model of belief formation (namely Shared Mental Models), and (6) provides a demonstration of a model to empirically test beliefs-based explanations of divergent development. This thesis critically reviews existing literature on the interaction between beliefs, culture and development, and finds that beliefs play a significant and interdependent role in causing divergent outcomes in development. Determining the exact magnitude and significance of the effect of beliefs is difficult due to the interdependence of prevailing economic incentive structures, i.e. there is an inextricable endogeneity between beliefs and prevailing institutions. Nevertheless, this thesis articulates methodologies to partially mitigate endogeneity concerns, which, in turn, provide a basis for future empirical research with richer datasets. For future research and replication, this thesis provides a succinct description of the methodology of the proposed systematic method of analysing the economic effect of particular beliefs and values. To perform this systematic analysis, datasets are required that combine the responses to questions on (1) respondents’ views, and (2) economic outcomes. Surveys that ask more questions to determine beliefs and values, individual-level economic outcomes and policy views, relevant controls, and possible instrumental variables, would provide analysts with richer data for more insightful analyses. Preliminary results show significant potential for employing this method in other contexts, such as political decision-making, the formulation of public information campaigns, public health, and the analysis of road-user behaviour. Additional contributions from cognitive science involving the formation and evolution of beliefs could further enhance the robustness of the preliminary arguments and findings on the effect of beliefs on divergent economic outcomes. This thesis concludes that beliefs seem to ultimately affect economic and political decision-making. Moreover, this thesis shows that there is at least one method of analysing the effect of beliefs systematically.
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    Is the law irrelevant...? : an institutional analysis of road safety outcomes
    (2022-04) Matulich, Nadia Antonette; Du Plessis, Sophia; Du Rand, Gideon; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH SUMMARY: This thesis aims to investigate the interaction between formal and informal institutions, and the enforcement thereof with the aim of developing an understanding of how to design holistic policy interventions that definitively change outcomes. Many governments choose to turn, primarily, to changes in laws and regulations in order to change economic outcomes. However, the field of institutional economics shows that simply considering legislation is not sufficient. Pejovich (1999) posits that it is extremely difficult to induce change if the formal institutions, or the law, and the informal institutions are not aligned, and that without appropriate accompanying changes in informal institutions and in enforcement, the law itself may be irrelevant in changing outcomes. This institutional framework is applied to consider the most appropriate policy mix for reducing road fatalities. This thesis takes Du Plessis et al. (2020a) as a starting point, which shows that South Africa seems to have ‘all the right laws’ needed to attain low road fatalities, however, outcomes remain poor, and that appropriate changes to enforcement and informal institutions are necessary. This study considers the incidence of road fatalities across the world against the backdrop of their formal institutions, enforcement, and informal institutions, so as better to understand the impact of these factors on economic outcomes. In addition to investigating enforcement, an attempt to open the ‘black box’ of informal institutions is made, to discern which attitudes and values seem to drive law abidance and road behaviour. This thesis combines data from the World Health Organisation on Road Safety, including data on road fatalities across countries, and different regulatory features within these countries, as well as data on norms, values and attitudes from the World Values Survey. Cluster analysis, principal component analysis and multiple correspondence analysis techniques, alongside ordinary least squares are employed, with the aim of exploring and understanding supplemental factors that need to be considered when employing law-making as a tool to change economic outcomes. It is found that, whilst laws still have an important role to play, it is the enforcement thereof that is of paramount importance for improving traffic fatalities. It is also found that in countries with a strong suite of vehicle safety standards, road fatalities are significantly lower than observed in countries without vehicle safety standards. Lastly, informal institutions were found to be strongly correlated with road fatalities. Notably, values associated with political and economic participation, as well as those with social liberalism are most strongly correlated with low road fatalities.