If you go to the emergency room with pneumonia and they diagnose a broken arm, don’t expect useful treatment. Effective cures must emanate from sound, evidence-based diagnoses. That holds for economic policy too, but all too often proposals derive from general theories rather than systematic analysis of our own real-world challenges.

The Treasury’s latest medium-term budget policy statement (MTBPS), like its revised discussion document on growth, illustrates this problem. It does not provide a consistent analysis of the factors behind SA’s economic ills and, as a result, its remedies are inadequate and patchy. Mostly it takes the easy route of blaming slow growth on poor governance. That ignores SA’s unique economic realities, especially unusually heavy dependence on mining exports combined with deep inequalities in income, ownership and education.

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