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Working Paper 263 - Factor Productivity and Potential Output Growth in South Africa
Factors of production—labour, capital and technology—feature prominently in endogenous and exogenous growth theories. The efficiency and intensity of their use, and their productivity levels, have varied widely before and during South Africa’s period of democracy. In the four decades before the democratic transition in 1994, South Africa’s economy was characterized by a rapidly increasing average capital intensity and a rising average capital output ratio, alongside weak and often declining total factor productivity (TFP), and thus weak and declining economic growth.