2. • 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.

3. • 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.

4. The study of the nature, principles and economic
consequences of
expenditure, taxation, €financing, and the
regulatory actions undertaken by the non-profit
making government sector of the economy.

5. • Procurement of private funds by the state
• Enacting a law to allocate private resources
• Positive economics
• Normative economics.

6. 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

8. • 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.

10. • Supplier of public goods and services
• Purchasing power
• Privatisation
• Public-private partnerships
• Taxes and levies
• Budget imbalance
• Government borrowing
• Impact of economy on government.