South Africa Refutes One of Jeffrey Sachs’ Hypotheses Based on Commercialisation Index Scores

Abstract

Commercialisation index (CI) scores were developed for 20 countries by Sachs (2011) in a book published as a response to the international financial crisis that commenced in 2007 with the sub-prime crisis and is still prevalent in some economies. The CI scores measure the degree in which countries are oriented towards consumption and impatience (a “now” society demanding instant gratification of wants), rather than oriented towards collective consumption and regard for the future (Sachs, 2011:146). Sachs (2011) hypothesises that countries with high CI scores have (i) a high national poverty rate; (ii) with the largest share of household income accruing to the richest 1 per cent of the population; and (iii) a low level of development aid to poor countries. As South Africa is not one of the countries included in the CI scores developed by Sachs (2011), this paper (i) reports the results of a first compilation of such a score for the country and (ii) refutes one of Sachs’ hypotheses based on CI scores. South Africa has a particularly high CI score (third out of the 21 countries used in this comparison). South Africa confirms the first and second hypotheses put forward by Sachs (2011), but refutes the hypothesis that countries with a high CI score makes relatively low contributions in terms of development aid to poor countries.

DOI: 10.5901/mjss.2014.v5n23p444