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Oxford Economic Papers Advance Access originally published online on March 4, 2008
Oxford Economic Papers 2008 60(4):649-682; doi:10.1093/oep/gpn007
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© Oxford University Press 2008 All rights reserved

Does human capital generate social and institutional capital? Exploring evidence from South African time series data

Johannes W. Fedderke* and John M. Luiz{dagger}

*Department of Economics, University of Cape Town, Private Bag X3, Rondebosch 7701, South Africa; e-mail: johannes.fedderke{at}uct.ac.za
{dagger}Graduate School of Business Administration, University of Witwatersrand; e-mail: john.luiz{at}wbs.ac.za

JEL classifications: O4, O1, I2, Z13


  Abstract

This paper presents an analysis of the interaction of human capital investment and the development of social and political institutions. We find that human capital matters—for growth through its quality dimension; for distributional conflict by raising political aspirations. But human capital does not stand alone either. The level of economic development (output) matters, distributional (instability) conflict as well as the rights dispensation can come to influence human capital investment decisions in their own right. Social, human capital, political as well as economic dimensions are densely interwoven in webs of association.


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