ECS3707 Assignment 7(COMPLETE ANSWERS) Semester 2 2025 - DUE 8 November 2025

ECS3707 Assignment 7(COMPLETE ANSWERS) Semester 2 2025 - DUE 8 November 2025; 100% TRUSTED Complete, trusted solutions and explanations. For assistance, Whats-App 0.6.7-1.7.1-1.7.3.9. Ensure your success with us... ASSESSMENT 7 ECS307-S2-2025 ECS 3707 ASSESSMENT 7 S2-2025 Year 2025 Semester S2 Module ECS 3707 Assessment 7 Assessment unique number Opens: Monday, 3 November 2025, 1:00 PM Due: Saturday, 8 November 2025, 4:00 PM Number of questions 2 Number of pages 8 Assessment total marks 100 Type of assessment Elective grouped assessment Elective group Summative Assessment date Duration 24 hours First Examiner Dr. R Lӧtter (nee Bezuidenhout) Second Examiner Dr. NW Gamede Third Examiner Dr. I Maloma Overview and general information Assessment content This assessment includes all lesson units, with main emphasis is on lesson 7 and lesson 8. The assessment focuses on a cross-country comparative analysis of South Africa and Argentina, examining institutional, economic, corruption, and socio-economic indicators. Students are expected to apply institutional economic theories, interpret FSI, CPI, and Freedom House data, and critically evaluate the impact of governance and institutions on development outcomes. Assessment format This is a short essay-type assessment consisting of four structured questions. Responses should be written in essay format, with students providing evidence-based analysis, theoretical application, and comparative discussion. Assessment overview The assessment requires students to demonstrate their ability to analyse institutional and governance factors alongside economic and socio-economic indicators in a cross-country context. It evaluates students’ capacity to integrate theory and empirical evidence, critically assess development outcomes, and present structured, coherent arguments. Assessment objectives In completing this assessment this assessment, students should be able to: Compare institutional and economic indicators across countries. • Apply institutional economic theory to real-world development challenges. • Critically assess the impact of corruption and governance on socio-economic outcomes. • Portray analytical and evidence-based essay writing skills. Assessment structure Summative (Weight: 25%) Applied short essay questions Submission guidelines Electronic submission via myUnisa in PDF format 2 Include your name, student number, and assessment title on the cover page. ASSESSMENT SOURCES AND ECONOMIC DATA Data requirements The data required to complete this assessment is accessible through the links provided below, or students may consult additional resources uploaded to the module website. Links and resources to answer this assessment Chapter 11 and 14 Todaro, Michael Paul, and Stephen C Smith. Economic Development. Thirteenth Edition. Hoboken, NJ: Pearson, 2020. APA: Todaro, M. Paul, & Smith, S. C. (2020). United Nations SDG goals Fragile state index South Africa: Argentina: Corruption perception index (social indicator CPI – not monetary) Corruption Watch global and South Africa – UNISA huge participant and contributor to research Failed state index - Political freedom – Freedom House South Africa: Argentina: World Bank: Public spending, public debt and economic growth Prohibited use of Artificial Intelligence (AI) The use of generative artificial intelligence tools (e.g., ChatGPT, Google Gemini, Copilot, Jasper, etc.) is strictly prohibited in the completion of your assessment unless explicitly authorised by the lecturer. economic policies, development planning strategies, or institutional reforms could be implemented to improve government efficiency, strengthen institutions, and enhance economic development, thereby optimising the economic outlook for the foreseeable future in both countries, considering that the youth will inherit the public debt. Using AI tools to generate content, summarise material, or formulate arguments is considered unauthorised assistance and a breach of academic conduct. If you use AI, the platform must be named and referenced according to the Harvard referencing method. Please include the prompts you used in an appendix. 3 Submissions detected to contain AI-generated content, partially or fully, will be investigated as potential academic misconduct. Students found in violation may face disciplinary action, including mark penalties, assessment failure, or further institutional consequences. Academic writing standards All submitted assessments must adhere to the standards of academic writing expected at the third-year undergraduate level. This includes: • Aligning and presentation of your work. • Presenting arguments in a clear, logical, and structured manner. • Using formal language appropriate for academic communication. • Signifying critical thinking and original analysis. • Supporting claims with appropriate evidence, theory, and relevant examples. • Citing all sources accurately using a recognised academic referencing style (APA or Harvard preferred). • Avoiding excessive use of direct quotations. Plagiarism Plagiarism is the act of presenting someone else's work, ideas, or words as your own without proper acknowledgment. It includes: • Copying from another student’s work. • Copying and pasting text from books, websites, or AI tools without citation. • Failing to paraphrase or quote correctly. • Submitting previously submitted work for another module or assessment without permission (self-plagiarism). All assessments will be subject to plagiarism detection software (e.g., Turnitin) or in-house screening. Submissions with high similarity reports or unattributed content will be flagged and formally reviewed. ASSESSMENT SCENARIO The silent tax: Corruption’s toll on South Africa and Argentina Blessed is the young for they shall inherit the national debt. Herbert Hoover (1874 – 1964) The statement ‘every dollar spent on corruption is a dollar less for development’ succinctly conveys the detrimental effect of corruption on economic growth. Corruption redirects resources that could be used for vital services, infrastructure, and poverty alleviation. Corruption, in both South Africa and Argentina, has become a silent but persistent tax on their economies, operating as a covert, repetitively opportunistic system driven by power, greed, and unwritten codes of dominance and fear (NWU, 2023). It erodes the foundations of good governance, and when governance is sacrificed, service delivery falters. influence of theoretical perspectives, specifically Keynesian demand-side economics, institutional economics, and governance theory (Public Choice), on the behaviour of foreign investors, multinational enterprises, and aid agencies. Assess the subsequent impacts on national economic growth and development, with specific reference to benefits and risks. Municipalities and provincial administrations in both countries exhibit alarming patterns where public resources are diverted from intended beneficiaries to private gain, leaving basic infrastructure projects incomplete and essential services crippled (Cowling, 2023). Empirical evidence confirms that corruption inflates the debt-to-GDP ratio, fuels budget deficits, and magnifies the negative effect of public debt on economic growth, particularly in developing 4 countries (Ibrahim, 2021). The UNDP (2022) estimates that up to 25% of public expenditure worldwide; equivalent to trillions of dollars; is lost to corrupt practices, with international bribery cases most linked to public spending. For South Africa, this loss translates into billions of rand annually, undermining fiscal space for critical programmes. Argentina, already grappling with recurrent debt crises, sees procurement overpricing and subsidy leakages pushing borrowing needs higher and choking macroeconomic stability. From a development economics perspective, corruption undermines domestic resource mobilisation by eroding the tax base, reducing domestic investment, and increasing reliance on external financing, thereby slowing poverty reduction efforts and widening inequality (UNDP, 2014; Lewis, 2017). The diversion of funds intended for welfare and infrastructure perpetuates a cycle of deprivation: in 2023, more than 18,2 million South Africans lived in extreme poverty, with projections showing this number will rise further (Cowling, 2023). In Argentina, inflation, currency instability, and corruption-induced misallocation of subsidies drive similar increases in poverty and social vulnerability. From an institutional economics perspective, weak enforcement of laws, regulatory capture, and entrenched patronage systems in both countries reinforce the persistence of corruption (North, 1990). In these institutional traps, rules are applied selectively, accountability mechanisms are compromised, and informal networks become more influential than formal governance structures. in institutional quality, corruption control, and political freedoms between South Africa and Argentina shape each country’s capacity to plan and implement effective long-term development policies. whether stronger institutions necessarily lead to better socio-economic outcomes, using evidence from both countries’ recent policy experiences. This results in distorted government planning, as budgets are shaped by political expedience rather than developmental priorities, leading to inefficient allocation of resources and missed growth opportunities. Ultimately, the impact is multidimensional: corruption suppresses economic growth, wastes scarce public resources, inflates public debt, disrupts development planning, undermines poverty alleviation strategies, and deepens -economic indicators (income inequality, human development) between South Africa and Argentina. Discuss how institutional weaknesses and governance challenges (as reflected in the FSI and CPI) contribute to persistent socio-economic disparities and evaluate the potential role of targeted poverty alleviation strategies in each context. Corruption Perceptions Index (CPI), analyse how varying levels of perceived corruption in South Africa and Argentina impact government efficiency, public investment quality, and private sector confidence. In your discussion, explain how corruption can become both a cause and a consequence of weak institutional frameworks, and relate this to cross-country growth outcomes. Addressing this requires not only anti-corruption enforcement but also institutional reform that dismantles entrenched networks, strengthens accountability, and restores public trust in governance. Using the Fragile States Index (FSI) and Freedom House indicators, critically compare the institutional resilience of South Africa and Argentina. how differences in political stability, rule of law, and state legitimacy have influenced each country’s long-term development path. Support your answer with reference to at least two specific institutional economic theories Without such reforms, the silent tax of corruption will continue to compromise the economic futures of both South Africa and Argentina. The notion that government spending can increase aggregate demand is a simplistic and often misleading concept. While it is theoretically possible for government spending to boost economic activity, the reality is far more complex. In practice, a multitude of factors, including the potential for crowding out private investment, inefficient allocation of resources, and the risk of inflation, often hinder the effectiveness of government spending in stimulating the economy (UNDP, 2022). In South Africa, State Capture reports have clarified how corruption in critical sectors, such as energy and transport, has undermined investor confidence. Foreign investors perceive higher operational risks, inflated costs, and unpredictable regulation in these sectors. Aid flows from programs, such as PEPFAR and the Global Fund, which are subject to oversight, remain vulnerable to procurement irregularities. This can divert resources away from the intended beneficiaries. In Argentina, recurring debt crises and high-profile corruption scandals, such as the ‘Cuadernos’ case, have led to volatile foreign direct investment (FDI). Foreign aid to Argentina has become increasingly conditional due to these issues. IMF support packages for Argentina often include stipulations for governance reform (IMF, 2025). However, many of these stipulations are only partially implemented, further dampening investor confidence. The economic chain (path dependency) across both nations is strikingly similar: Corruption → Misallocation of resources → Investor and donor distrust → Lower FDI and less effective aid → Reduced growth and higher debt → More corruption. Bribes distort market competition and inflate procurement costs, causing investors to prefer destinations known for their strong governance. For instance, in the mining industry, investors may choose Chile over Argentina or Botswana over South Africa. Concerned about inefficiency and misuse, donors often reduce aid, redirect it to NGO, or impose strict conditions related to transparency and governance, as documented in the literature on aid and corruption. Corruption can divert funding from critical projects, such as schools, clinics, and infrastructure, even when aid is delivered. This can lead to increased poverty, growing inequality, and social unrest. The World Bank and the UNDP have noted that corruption can make countries more dependent on aid rather than promote self-sufficiency. Furthermore, the UNCTAD (2021) has found a persistent negative correlation between high levels of corruption and sustained FDI in developing countries. Illicit income from corruption enters the economy in a manner akin to that of any other disposable income. Bribe recipients convert these gains through various means, such as luxury purchases, real estate, healthcare, education, or importing goods, and it contributes to household final consumption expenditure (HFCE) and can temporarily inflate GDP. However, this ‘artificial boost’ is misleading: It generates a short-lived increase in demand and secondary spending, but the benefits primarily go to a narrow elite, diverting productive public investment and degrading infrastructure quality. Over time, public trust is eroded, legitimate businesses withdraw, and investors become more cautious. Allowing corruption-driven spending to be mistaken for economic growth is comparable to using stolen fuel to power a car. The engine may run briefly, but without proper maintenance and legitimate investment, the engine will eventually break down and the costs will be significantly higher. As a result, a vicious cycle is created: corruption leads to misallocation, which discourages FDI and hampers aid effectiveness; the resulting slowdown in 6 development exacerbates poverty and inequality, making the economy even more susceptible to renewed corruption (UNCTAD, 2024; IMF, 2025).Most economists employ a multi-faceted approach by combining insights from three distinct economic development theories: Institutional economics, Keynesian macroeconomics, and Public Choice Theory to comprehend how corruption affects economic growth, inequality, and investment flows. This allows us to assign specific fiscal effects, financial resource flows, economic growth governance, and socioeconomic causal attributes to the diagram. Using the mind map provided, how would you categorise and assign specific effects to each economic dimension Bribes distort market competition and inflate procurement costs, causing investors to prefer destinations known for their strong governance. For instance, in the mining industry, investors may choose Chile over Argentina or Botswana over South Africa. Concerned about inefficiency and misuse, donors often reduce aid, redirect it to NGO, or impose strict conditions related to transparency and governance, as documented in the literature on aid and corruption. Corruption can divert funding from critical projects, such as schools, clinics, and infrastructure, even when aid is delivered. This can lead to increased poverty, growing inequality, and social unrest. The World Bank and the UNDP have noted that corruption can make countries more dependent on aid rather than promote self-sufficiency. Furthermore, the UNCTAD (2021) has found a persistent negative correlation between high levels of corruption and sustained FDI in developing countries.