0717513144
ASSIGNMENT 4: FINAL PORTFOLIO
Essence of public sector investment towards development of township
economy: A case of Soweto 2010 - 2020
Students name:
Student number:
Module : HRPUB83
i
, 0717513144
Table of Contents
Chapter One: Introduction, Background, Research Problem and Rationale ..................... 1
Introduction ......................................................................................................................................... 1
Background ......................................................................................................................................... 1
Study rationale and motivation ...................................................................................................... 6
Problem statement............................................................................................................................. 7
Research objectives .......................................................................................................................... 8
Research questions ........................................................................................................................... 8
Research concepts ............................................................................................................................ 8
Research methodology .................................................................................................................. 11
Research approach ......................................................................................................................... 11
Data collection .................................................................................................................................. 12
Research design............................................................................................................................... 12
Conclusion ......................................................................................................................................... 12
Chapter two: Literature review ..................................................................................................... 14
Introduction ....................................................................................................................................... 14
The foundation and benefits of public sector investment .................................................... 14
The downside of public investment ............................................................................................ 20
The confluence of public and private investment ................................................................... 23
Empirical studies ................................................................................................................................... 26
Contextualising South African public sector investment ..................................................... 30
ii
, 0717513144
Conclusion ......................................................................................................................................... 31
Chapter three: Major findings ....................................................................................................... 32
The different types of public investments .................................................... 32
The effect of public investments on community development................... 38
Recommendations (strategies of promoting public investment)........................................ 39
References ......................................................................................................................................... 42
iii
, 0717513144
Chapter One: Introduction, Background, Research Problem and Rationale
Introduction
Many governments have, since the turn of the new millennium shifted from public
sector-based economy to private sector. Such economic transitions have been
happening globally in regions such as Asia, Eurasia (Union of Soviet Socialist
Republics - USSR), Eastern and Central Europe and the Latin America as well as
Africa (Dobronravin & Jeifets, 2019). This follows the advocacy of various international
organisations such as the International Bank of Reconstruction and Development
(IBRD) /World Bank (WB), International Monetary Fund (IMF) as well as Organization
for Economic Co-operation and Development (OECD). Such shift has been labelled
by many as economic liberalisation, which is essentially inclined towards market
system, where decisions made by the private players is considered more vital to
move the economy forward (Banaji, 2020). However, there is widespread belief that
free market economy has failed in many instances since its first feature in 1770s as
advocated by scholars such as Adam Smith. Many development economists and
public sector scholars still hold that public sector investment is a crucial vehicle for
developing small economies. In this regard, public sector investment refers to the
various capital expenditures undertaken by the government for profit/revenue
purpose, social welfarepurpose as well as economic enhancement. This research was
therefore done to examine importance of public sector investment towards
development of township economy with a focus on Soweto.
Background
Nature, arguments and importance of public investment
According to Vluggen, Kuijpers, Semeijn and Gelderman (2020) investment by state
in public assets, through central or local governments and publicly owned corporations
has arisen historically from the need to provide certain (public) goods, infrastructure,
or services that are vital for national interest. Chornovol, Tabenska, Tomniuk and
Prostebi (2020) reveal that public investment has increased due to industrialization
and corresponding demand for new infrastructure to facilitate urban growth. Banaji
(2020) divides public investment into tangible investment in infrastructure (such as
1
ASSIGNMENT 4: FINAL PORTFOLIO
Essence of public sector investment towards development of township
economy: A case of Soweto 2010 - 2020
Students name:
Student number:
Module : HRPUB83
i
, 0717513144
Table of Contents
Chapter One: Introduction, Background, Research Problem and Rationale ..................... 1
Introduction ......................................................................................................................................... 1
Background ......................................................................................................................................... 1
Study rationale and motivation ...................................................................................................... 6
Problem statement............................................................................................................................. 7
Research objectives .......................................................................................................................... 8
Research questions ........................................................................................................................... 8
Research concepts ............................................................................................................................ 8
Research methodology .................................................................................................................. 11
Research approach ......................................................................................................................... 11
Data collection .................................................................................................................................. 12
Research design............................................................................................................................... 12
Conclusion ......................................................................................................................................... 12
Chapter two: Literature review ..................................................................................................... 14
Introduction ....................................................................................................................................... 14
The foundation and benefits of public sector investment .................................................... 14
The downside of public investment ............................................................................................ 20
The confluence of public and private investment ................................................................... 23
Empirical studies ................................................................................................................................... 26
Contextualising South African public sector investment ..................................................... 30
ii
, 0717513144
Conclusion ......................................................................................................................................... 31
Chapter three: Major findings ....................................................................................................... 32
The different types of public investments .................................................... 32
The effect of public investments on community development................... 38
Recommendations (strategies of promoting public investment)........................................ 39
References ......................................................................................................................................... 42
iii
, 0717513144
Chapter One: Introduction, Background, Research Problem and Rationale
Introduction
Many governments have, since the turn of the new millennium shifted from public
sector-based economy to private sector. Such economic transitions have been
happening globally in regions such as Asia, Eurasia (Union of Soviet Socialist
Republics - USSR), Eastern and Central Europe and the Latin America as well as
Africa (Dobronravin & Jeifets, 2019). This follows the advocacy of various international
organisations such as the International Bank of Reconstruction and Development
(IBRD) /World Bank (WB), International Monetary Fund (IMF) as well as Organization
for Economic Co-operation and Development (OECD). Such shift has been labelled
by many as economic liberalisation, which is essentially inclined towards market
system, where decisions made by the private players is considered more vital to
move the economy forward (Banaji, 2020). However, there is widespread belief that
free market economy has failed in many instances since its first feature in 1770s as
advocated by scholars such as Adam Smith. Many development economists and
public sector scholars still hold that public sector investment is a crucial vehicle for
developing small economies. In this regard, public sector investment refers to the
various capital expenditures undertaken by the government for profit/revenue
purpose, social welfarepurpose as well as economic enhancement. This research was
therefore done to examine importance of public sector investment towards
development of township economy with a focus on Soweto.
Background
Nature, arguments and importance of public investment
According to Vluggen, Kuijpers, Semeijn and Gelderman (2020) investment by state
in public assets, through central or local governments and publicly owned corporations
has arisen historically from the need to provide certain (public) goods, infrastructure,
or services that are vital for national interest. Chornovol, Tabenska, Tomniuk and
Prostebi (2020) reveal that public investment has increased due to industrialization
and corresponding demand for new infrastructure to facilitate urban growth. Banaji
(2020) divides public investment into tangible investment in infrastructure (such as
1
