Policymakers often work in the dark, as they try to make real impact on people’s lives. If you don’t have good data, being worked on by good researchers, it can be hard to know whether efforts are truly making a difference. In South Africa, one key area where data and evidence have been missing is on firms. The National Treasury, together with the UNU World Institute for Development Economics Research (UNU-WIDER), have embarked on a multi-year programme to address this problem.
On the 20th floor of the National Treasury in Pretoria sits a computer that contains tax information on each firm — data that are already being collected yearly by the South African Revenue Service. The solution to the firm data problem in South Africa then, was not to generate new data, but to follow international best practice and open up this existing data to researchers with the hope that research can help lead to better policy. This newly available data has the potential to be a game changer for research — and for policy in the country.
According to Duncan Pieterse of the Macroeconomic Analysis Unit at the National Treasury: “What this data allows us to do is to look back in time and understand what has been the impact of government policy. Did we get the value for money we expected to get, and how can one redesign those programmes going forward to make better use of these resources?”
The Desk at the Treasury documentary highlights the role that UNU-WIDER played in the project. The Institute provided both international expertise and a connection between researchers and policymakers. This connection gave both sides the confidence that the data could be used to answer important policy questions.
A long-term aim of the project is to not only evaluate and improve policy, but to build capacity, both within the research community in South Africa and within the policy departments of the South African government. In this sense, it is one of the most innovative projects of its kind in Africa. With the success in South Africa, other countries in the region are looking to follow.
Konstantin Makrelov, Chief Director of Modelling and Forecasting at the National Treasury, points to some areas in which the project is already having an impact: “The work on the Employment Tax Incentive, on the learnership allowance, the work on capital vs. employment incentives, and how they affect labour costs has directly fed into the Treasury’s policy decisions.”
The Desk at the Treasury is the second of the new UNU-WIDER mini-documentaries. You can watch A Two-Way Street here and read more about the project that brought rise to this work, Regional Growth and Development in Southern Africa project.
• • •
The views expressed are those of the author(s), and do not necessarily reflect the views of UNU-WIDER or the United Nations University, nor the programme/project donors.
This article originally appeared on the blog of the UNU World Institute for Development Economics Research (UNU-WIDER).