Abstract

Many studies have evaluated the impact of trade liberalisation in South Africa. Our study proposes to evaluate the consequences of trade liberalisation when fiscal constraints and budget discipline lead government to reallocate the fiscal adjustment induced. More precisely, we will focus on the consequences on the education system and the consequences of students’ performances at school in long run. To evaluate the impacts of this tariff removal, we will use a Computable General Equilibrium model (CGE) to be able to capture the economy wide effects, and especially on the education sector. We present a tariff removal combined with three different fiscal options, and analyse the results on the education sectors. We found that the decrease in government spending has dramatic impacts on students’ behaviours in the long run, whereas an increase in the indirect tax on commodities affects the post-secondary education sector.

Key words: Trade policy, fiscal constraints, impacts of trade liberalisation, impact on education.