Country risk, capital flows and industrial structure: South Africa in the 1990s Research Notes for Small Group 1

South Africa has undergone a great deal of political change during recent years. One result of this change has been to affect the attractiveness of the investment climate within South Africa. This experiment is designed to examine how a change in the investment climate affects the domestic economy and other economies. As a result of political changes and uncertainties, investors have shown widely varying degrees of confidence in South Africa’s prospects over the last few decades. Figure 1 shows South Africa’s annual net international capital flows since 1960. Figure 1: South Africa’s net capital flows (nominal $m