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Financialisation shapes the ways in which middle-income countries and their nonfinancial corporations integrate into global supply chains and the global financial system. This integration in turn shapes the ways in which these corporations engage with financialisation. To unpack these dynamics, we advance an integrated analytical framework to explore specific sources and processes of financialisation that emerge and operate across micro, meso and macro levels. First, we adopt different concepts of rents to unpack variegated sources of financialisation related to the firm’s investment and financial activities, their value chain position, market structure, and political economy contexts. Second, we articulate financialisation processes specific to the middle-income country context through which rents are extracted. We apply our framework to three case studies of non-financial corporations in South Africa, a middle-income country undergoing premature deindustrialisation and financialisation. The selected corporations operate in different sectors and occupy different positions within their respective supply chains: Sasol in chemicals, Shoprite in retail, and MTN in Information and Communication Technology (ICT) services. Our integrated framework reveals highly heterogeneous sources and processes of financialisation which intersect at the three different levels.

Sustained investment in productive capabilities and fixed-capital formation is a key driver of inclusive and sustainable structural transformation. Both historically and compared to other middle-income countries, South Africa has performed poorly in terms of sustaining domestic-productive investments. This failing has coexisted with the development of a stock market with the second-highest level of capitalization over gross domestic product (GDP) in the world, and high levels of profitability across several economic sectors. This chapter provides new evidence on the specific ways in which financialization of non-financial corporations in South Africa has resulted in low investment performances, focusing on two large, publicly listed corporations operating across different economic sectors between 2000 and 2019. The analysis shows that, despite sector heterogeneities: (1) corporations have increasingly financed operations, capital expenditure, and distributions to shareholders with debt; (2) the US dollar-denominated share of this debt has grown rapidly, exposing corporations to increased exchange and interest rate risk; and (3) distributions to shareholders, driven by dividends rather than share repurchases, have risen markedly. These financialization dynamics are attributed to the distribution of power in the domestic political economy and the subordinate nature of South Africa’s integration with global finance. Driving financialization, these two mutually reinforcing factors have undermined the translation of profits into domestic investment, reducing its capacity to drive structural transformation.

Informal payments for healthcare are widespread in sub-Saharan Africa. They are often regressive, potentially limiting access to quality healthcare, particularly for the most vulnerable, and can have catastrophic consequences for households. Yet there is little empirical research that uses theory-driven hypotheses to explore what influences informal payments and, especially, from health workers' perspectives. Consequently, we have explored the characteristics of health workers and facilities influencing informal payments in Tanzania, examining two hypotheses: health workers with power and position in the system are more likely to receive informal payments, and transparency and accountability measures can be bypassed by those who can game the system. We conducted a cross-sectional survey of 432 health workers from 42 public health facilities (hospitals and health centres) in 12 district councils from Pwani and Dar es Salam regions in Tanzania. Our dependent variable was whether the health worker has ever asked for or been given informal payments or bribes, while explanatory variables were measured at the individual and facility level. Given the hierarchical structure of the data, we used a multilevel mixed-effect logistic regression to explore the determinants. Twenty-seven percent of 432 health workers ever engaged in informal payment. This was more common amongst younger (

With recent changes in the global economy, policy makers are increasingly turning from global value chains to regional and national value chains as drivers of structural transformation in the global South. This paper examines economic and social upgrading in the Tanzanian textile and apparel sectors, with a particular focus on how outcomes vary across value chains, i.e. with value chain directionality. We also analyse industrial and trade policies at the national, regional, and global levels to see the extent to which they allocate rents that enable firms to capitalize strategically on the benefits offered by different value chain types. Data are drawn from fieldwork comprising a firm survey and semi-structured interviews with policy makers, as well as from official sources. We find that national, regional, and global value chains each offer distinct opportunities in terms of functional, product, process, and end-market upgrading as well as other economic and social outcomes and that while policy rents have been critical to the outcomes observed, there is scope to improve multi-scalar industrial policy design to achieve rapid structural transformation.