Answer to Question #192136 in Microeconomics for BEGONIA SHANTY

Question

Land has been a huge debate in south Africa over the past 10 years with the EFF pushing for a land redistribution to all South African citizens. Without a doubt, many people in townships have created jobs and streams of income through invention of small businesses in their yards (i.e Residence, crèche, tarvens and Spazas). Critically discuss the impact of land use regulations on the formalization and sustainability of these small business.

Answer 1

Land use rules give a person the right to use the land for agricultural plantings, or for running any other business. Household plots are not strategically important from the point of view of agricultural production. To do business on a house plot does not require intervention in large agricultural areas. Thus, the land-use rules are indirectly related to these types of small businesses.