Institutional change and economic growth: the case of South Africa

The aim of this dissertation is to study the impact that an abrupt institutional change, in particular a democratic transition, can have on economic growth. Notably, my focus will be on the channels through which democracy affected economic development in a country which has recently undergone a process of democratization: South Africa. To do that, I do not limit my study to the analysis of GDP growth, unemployment rate and total factor productivity trends. In fact, I also delve into the overall economic and human development of South Africa, emphasizing differences among the population. Moreover, I use the results of recent Afrobarometer surveys, conducted on a random sample of the population, to measure the public sentiment towards the way the democratic regime is ruling the country. Data confirm that democracy was crucial in reversing the declining trend and directing the country towards a path of sustained growth. However, even though beneficial, the democratic regime alone did not solve all the issues of South Africa. On the contrary, as time went by, the newly established government has shown some limitations and is now facing big challenges when it comes to poverty, inequality, unemployment and corruption. Solving these problems will be crucial both for economic prosperity and for the very survival of democracy.