| Abstract: |
The African National Congress (ANC) can look back on eighty years of struggle
which resulted in the liberation of black Africans, the creation of a
democratic constitution and free elections. However, the last twenty years of
ANC rule has been criticized for the failure to bring higher living standards
for the formerly oppressed. With the party's dominance and the challanges
facing South Africa in mind, I estimate the effect of ANC power in
municipalities on economic, social and budgetary outcomes. To estimate the
causal effect of the party, this paper uses an instrumental variable approach
developed by Freier & Odendahl (2012) and a regression discontinuity design.
Taken together, the results point to an adverse effect of the party: less is
spent on repairs and water provision which in turn may explain why ANC power
seems to lower the share of individuals who have access to piped water and
electricity. Further, more resources are used on municipal employees and the
councillors themselves, while I find suggestive evidence of an increase in the
poverty rate due to the party. Lastly, although being their major political
support, we cannot conclude that the ANC affects black African's living
standards. From the IV analysis, I find indications that oppositional parties
many times have a more positive impact on outcomes as they gain power at the
expence of the ANC. |