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Archive for April 2015

How this man added more than 6000 jobs to the South African economy. With his left hand.

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On 18 November 2009, with 17 minutes left of extra time in a play-off FIFA World Cup game between the Republic of Ireland and France, Thierry Henry, France’s striker, handled the ball in the in-goal area, deflecting it to William Gallas who headed it into the back of the net. The goal allowed France to draw the game and win the play-off series of two games by two goals to one, which meant they qualified for the 2010 FIFA World Cup in South Africa while the Republic of Ireland did not.

Henry’s handball, I argue in a new paper with María Santana-Gallego, added close to R1 billion to the South African economy in tourism expenditure. Had Ireland qualified, far fewer tourists would have visited South Africa, as Ireland is a much smaller country (5 million vs France’s 66 million inhabitants). We use a gravity model to run counterfactual results: what would have happened had Ireland qualified instead of France?

France’s participation meant that 36,482 additional French tourists visited South Africa in 2010. In contrast, had Ireland qualified, our model predicts that only 8,234 additional Irish tourists would have arrived. The difference of 28,248 means that the ‘hand of Henry’ added R333 million in tourism expenditure during 2010 alone. The legacy effect is equally large: in the three years following the event, an additional 60,960 French tourists came to South Africa, whereas only 14,784 Irish tourists would have come had Ireland qualified for the finals. This means that tourism expenditure in South Africa during the three years following the World Cup was R545 million more because France qualified. In total, the ‘hand of Henry’ increased tourism expenditure in South Africa by an astonishing R878 million, or, using the shorthand of 12 additional tourists for each extra job, provided 6,202 more jobs.

The R1 billion touch... Thierry Henry in action against Ireland.

The R1 billion touch… Thierry Henry in action against Ireland.

The aim of our paper is to show that the tourism impact of mega-sport events like the FIFA World Cup is highly unpredictable, as it depends to a large extend on the which 32 countries qualify. Had Russia qualified instead of tiny Slovenia, or Egypt qualified instead of Algeria (both were involved in play-off games against the other), our model predicts that the South African economy would have benefited significantly more.

This, of course, is not directly useful information for tourism managers, as they cannot engineer such incidents, or influence the outcome of a play-off. But they could gear their expectations of tourist arrivals to the results of the qualification rounds. What is clear is that much of the economic impact of a mega-event like the World Cup can be determined by the random outcome of a single play-off game – or even, as in the ‘hand of Henry’ case, the ‘butterfly effect’ of a single incident.

Perhaps there’s a reason that Henry is considered a demi-god by Arsenal fans: It’s not every man that can create 6000 jobs in a split second. And do so by simply touching a ball (illegally) with his left hand.

Written by Johan Fourie

April 24, 2015 at 20:57

This is what nationalism can do to you

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Church square in Pretoria on the day South Africa became a republic

The consequences of nationalism: Church square in Pretoria on the day South Africa became a republic

Hendrik Verwoerd was the architect of apartheid. He was responsible for at least two of apartheid’s most infamous policies: the creation of the Bantustans and the Bantu Education Act (where he famously proclaimed:”There is no place for [the Bantu] in the European community above the level of certain forms of labour … What is the use of teaching the Bantu child mathematics when it cannot use it in practice? That is quite absurd. Education must train people in accordance with their opportunities in life, according to the sphere in which they live.”)  Most South Africans – black and white – now consider Verwoerd and his ideas nefarious: he led us down a road that we are still struggling to recover from.

But when and where did Verwoerd acquire his racist ideas of the world? Was it always there, simmering under the surface, allowed to boil over with the National Party victory in 1948? Or did context and circumstance gradually pull him in a certain direction? Was Hendrik Verwoerd the Evil One born or created?

I recently stumbled on a rather surprising paper. Written by Roberta Miller and published in 1993 in the Journal of Southern African Studies, the paper investigates the early professional life of Dr Hendrik Verwoerd. An immigrant from Holland, Verwoerd arrived with his missionary family in 1903 at the age of 2. After school, he moved to Stellenbosch to study Psychology, earning his PhD  (The Blunting of the Emotions) cum laude by the age of 23. He was immediately offered a position in the department.

Verwoerd received a bursary to study at Oxford (the Abe Bailey scholarship, which he declined because of Bailey’s imperial jingoism) but chose instead to travel to Germany for his post-doc education. Here he spent time in Berlin and Leipzig, learning the latest statistical techniques in the field, before traveling to America for a lecture and study tour. Miller explains that the quality of Verwoerd’s scientific articles improved remarkably after these trips. While in America, he received word that he had been appointed professor in Psychology and he had to cut short his trip to be home in time for the new academic year in 1928. Verwoerd is still, as far as I know, the youngest professor ever to be appointed at Stellenbosch University.

The remarkable thing, though, is that none of his early career research or teaching could have predicted his future policies. While American sociologists were proclaiming the innate intellectual differences between black and white people based on IQ scores, Verwoerd rejected these ideas. Miller (1993: 650) writes:

Verwoerd did not believe that there were any biological differences between the racial groups. He clearly recognised the distinctions between whites, coloureds, and natives that were made in South Africa and often presented population statistics in terms of the major racial groups in the country. In the context of discussions of population growth, for example, Verwoerd presented his classes with population statistics on natives, Asians, coloureds, and Europeans, and occasionally Jews. But although many South Africans argued that biological factors contributed to the development of civilisation, Verwoerd did not. ‘There are no biological differences among the big race groups as was argued earlier,’ he told his classes, adding that because there were no differences, ‘this was not really a factor in the development of a higher social civilisation by the Caucasian race.’

Verwoerd did not deny that there were measurable differences between the performance of blacks and whites in intelligence tests, but he told his classes that it was difficult to compare test scores across groups of people with different backgrounds and experience. The critical issue, he argued, was not whether there were differences in underlying intelligence, but rather whether the differences in the test scores of various groups were due to inadequate tests and differences in living conditions.

In fact, his academic career paints the picture of a caring, open-minded pragmatist. After five years as Professor of Psychology, in 1932, Verwoerd was appointed as professor in the first Department of Sociology and Social Work in South Africa, also at Stellenbosch University. He immediately began to work on community social welfare activities in Cape Town, mostly dedicated to solving the poor white problem which had become a huge economic and political issue of the time (exacerbated by the global depression).

Because he was not trained as a sociologist, he chose to follow the theories propagated in American universities. Miller (1993: 647) explains:

Certainly the general approach of American sociology sat well with Verwoerd’s own mild socio-political ameliorism. American sociology in the early twentieth century was marked by a pragmatic positivism, an impulse toward the amelioration of social problems rather than structural social change, and a methodological reliance on empirical data.

Verwoerd’s methodological approach was ahead of his time. But his research activities received less and less attention, as the scale of white poverty became clearer. He organised national conferences on poverty alleviation; in fact, he became the spokesperson for social work education. He also worked hard to reconcile English- and Afrikaans-speaking animosities:

Rather than promoting racialism between the English and the Afrikaners, however, Verwoerd’s speech, taken in its entirety, suggests that Verwoerd was instead anticipating a new approach to dealing with poverty in which the English and the Afrikaner worked together in social welfare programmes. His goal was to ensure that the Afrikaner became a part of the country’s welfare activities rather than to eliminate English participation in welfare.

Verwoerd firmly tied social welfare to the democratic state rather than to any social or ethnic group in the state. ‘In the past,’ he said, ‘charity had been the task of a few self-appointed philanthropists; welfare work is now the task of the democracy. New times bring new problems and need new tools’ (Miller 1993: 654).

None of this suggests that Verwoerd would become one of the largest social engineers of the twentieth century. And yet he did. What happened?

The answer: The rise of Afrikaner nationalism in the 1930s. Verwoerd increasingly became agitated with the (apparently persistent) plight of the poor Afrikaner, and thought that political change was the only vehicle to achieve this. In 1937, he was offered the editorship of a new Afrikaner newspaper – Die Transvaler – funded by the Purified National Party of DF Malan. He accepted the position.

After Verwoerd left Stellenbosch, he abandoned the non-partisan politics of civil society that had previously consumed his energies and became deeply involved in party politics. The man who had insisted on joint English and Afrikaner welfare activities emerged as a strong Afrikaner nationalist. The professor who had denied that there were intellectual and biological differences among Africans and Europeans and who had proposed research that assumed them both to be part of the same South African society ultimately became an advocate of apartheid as the means to encourage and protect the differences between these groups. Finally, the academic who had commended the Jews for their contributions to world culture espoused strongly anti-Semitic sentiments (Miller 1993: 660).

As I’ve written before, nationalism – an extreme form of patriotism marked by a feeling of superiority over others – is extremely dangerous. It accentuates artificial differences between peoples, using that as justification for policies of exclusion. It punishes ‘outsiders’, however defined by the ‘insiders’. It inevitably cannibalizes itself, but at an unspeakably high cost for society. And it can shape the minds of brilliant scholars, like Hendrik Verwoerd, to enact policies that will take centuries to undo.

Lest we forget.

Source: Miller, Roberta Balstad. “Science and society in the early career of HF Verwoerd.” Journal of Southern African Studies 19.4 (1993): 634-661.

This is how to build a world-class African university

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Rhodes will fall today. After several weeks of protest, the Council of the University of Cape Town ratified the decision to temporarily move the statue of Cecil John Rhodes from its central position on campus. The removal is a victory for the #RhodesMustFall campaign, which has, despite the attempts of some groups to score cheap political points, continued to insist that the aim is to fight institutionalized racism and a colonial heritage that marginalizes black South Africans. Listening to SRC chairperson Ramabina Mahapa, I find that I agree with many of his sentiments: Why must we have Latin music at South African graduation ceremonies? Why not African drums? Why must Jameson Hall only have paintings of white men? Why can’t African universities feel more African?

One further aim of the #RhodesMustFall campaign is to demand positions for more black academics at South African universities. And a curriculum that is not so Eurocentric.

It’s of course much easier to change a hall of paintings or a graduation procession than to change the demographic make-up of university staff. But because it is difficult doesn’t make it less important. Now that Rhodes has fallen, let’s consider how to change the racial profile of our top universities. I’ll focus on the challenges at UCT and Stellenbosch, which I consider as the two best universities in South Africa. The Times Higher Education World University Rankings list both of them in the top 300 universities globally. And because I understand the context, I will also focus on my own field – Economics.

Let’s be clear: there is no easy way to resolve the issue. There is no reservoir of unemployed black professors in South Africa. Take Economics. The best and brightest black talent we graduate find incredibly lucrative offers in banks and financial institutions (Nedbank, Allan Gray), consultancies (KPMG, Bain, Genesis), or government (national and provincial treasuries, or the Reserve Bank). These jobs are often in the metropolitan areas of Gauteng that are more appealing (and more affordable) for young black graduates to live, than sleepy Stellenbosch or quiet Cape Town. From the student’s perspective the pull-factors are strong.

The main task of universities is to do ground-breaking research that can make a fundamental difference to how we understand the world and interact with it. One way to judge which universities are the best at this is to consider the objective rankings that are published annually (there are now three global rankings that are generally considered the norm, including a Chinese one). The way you improve in these rankings is to improve the quality of your research, i.e. the scholars at your institution must undertake research that can be published in top international journals. The best way to access these top journals is to spend some time in America, because US universities remain at the frontier of science. China understands this. Every year, China sends 250 000 of their best students to study at US universities. (Chinese students make up 31% of all international students in the US.)

It is only slightly ironic that during the same week of the Rhodes protests at UCT, Rhodes House in Oxford announced a new deal with the Chinese government to extent the Rhodes scholarships to Chinese students. (This was apparently on request of the Chinese after discussions of 18 months.) If our universities are to improve their international rankings, we need to appoint scholars with experience of studying in the US (and, to some extent, Europe and Australia). That is why in the Economics Departments of UCT and Pretoria you will find a large contingent of foreign scholars. They bring expertise which not only improve the research quality of their institution, but also introduce their students to techniques and networks (and funding) that are world class. Can we really improve as a discipline if we remain isolated from the rest of the world, teaching the next generation the obsolete science of the past? No. As The Economist wrote two weeks ago, the world is going to university. If we are to deliver students that can compete on an equal footing with the rest of the world, our universities should appoint and promote those that work at the frontier of science.

This, in my opinion, suggests that we have to ask a different question. Instead of attempting to find answers to how we can employ more black scholars, we should be asking how can we ensure that our brightest black students attain the qualifications and experience to become world-class researchers. The latter question seems to have more clear-cut answers: we need to follow the Chinese example. A large scholarship programme for black South Africans to study at US universities will allow our students access to the best minds in the world. (If we want the same proportion as the Chinese, we should be sending 12500 students annually!)  Even Robert Mugabe understands this. He has a scholarship programme for the best Zimbabwean students to study at South African universities.

Imagine 12500 black students returning every year with a degree from a top US university! Most of them will find well-paying jobs in the private sector or government, where they will contribute to the economy by creating jobs or better policies. (Here’s another interesting fact: Iran has more US-graduated PhDs in its cabinet than the US Congress.) But a small minority of these returning students, perhaps only 50, will want an academic job because of the great lifestyle and the fulfillment that comes from scientific breakthroughs.

And, you know what, universities country-wide will fall over their feet to appoint these graduates. Because that, they will know, is how you build a world-class African university.

Written by Johan Fourie

April 9, 2015 at 08:47