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AN ALTERNATIVE PERSPECTIVE ON SOUTH AFRICA'S PUBLIC DEBT, 1962‐1994
Author(s) -
CALITZ ESTIAN,
DU PLESSIS STAN,
SIEBRITS KRIGE
Publication year - 2011
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2011.01261.x
Subject(s) - debt , prudence , economics , internal debt , government debt , government (linguistics) , cash , perspective (graphical) , accrual , debt to gdp ratio , external debt , economic policy , monetary economics , macroeconomics , finance , earnings , artificial intelligence , computer science , philosophy , linguistics , theology
The history of public debt reflects the cumulative effect of fiscal decisions and real outcomes in the economy. In the South African case the published record on public debt distorts the historical perspective on the associated fiscal decisions. This paper shows the impact of adjusting the South African public debt on an accrual basis to take account of two major obligations assumed in the first half of the 1990s, namely actuarial pension fund deficits and government debt of the apartheid homelands. The adjusted series is less volatile and rose less steeply between 1989 and 1996 than the official, cash‐based debt series. Failing to account for the evolution of these obligations exaggerates the impression of weak fiscal discipline in the early 1990s and exemplary fiscal prudence in preceding decades.