The BRICS (Brazil, Russia, India, China, and South Africa) economic bloc aims to promote cooperation and growth among its members. South Africa joined BRICS in 2010, hoping to benefit from increased trade, investment, and a stronger international voice. This study investigates the impact of trade openness on South Africa's economic growth and development, comparing the pre- and post-BRICS periods (1991-2010 and 2011-2021 respectively). Existing research primarily focuses on the openness-growth nexus, neglecting the crucial role of economic development. This study aims to fill this gap by incorporating economic development indicators and analyzing both the short- and long-run relationships between trade openness, economic growth, and development in South Africa. The study uses the Human Development Index (HDI) as a proxy for development, offering a more holistic perspective than previous studies that used proxies like financial development or human capital accumulation. The impact of BRICS membership on South Africa's trade patterns, economic growth, and development is a key focus, especially considering BRICS's emphasis on economic cooperation and enhanced trade among its members. The research questions are: What is the trade-growth-development nexus in South Africa since joining BRICS? How has the openness-growth link affected South Africa's development? How do the effects of trade openness compare between the pre- and post-BRICS periods?

The literature review explores existing theoretical and empirical studies on the relationship between trade openness, economic growth, and development. While extensive research exists on the trade-growth nexus, with some studies suggesting a positive correlation based on theories like comparative advantage and endogenous growth, the results are mixed. The endogenous growth theory, in particular, highlights the role of trade openness in facilitating innovation and knowledge transfer, which is relevant in the post-BRICS context. However, there are also counterarguments suggesting that openness may be detrimental to growth if a country specializes in sectors with less research and development activity. The literature on the trade-development nexus is less developed, with previous studies employing different proxies for development, such as financial development or human capital accumulation. Few studies have examined the simultaneous interplay of trade liberalization, economic growth, and development, particularly using the Human Development Index (HDI). The study emphasizes the unique opportunity presented by South Africa's BRICS membership to study South-South trade relations and their impact on growth and development.

This study employs an augmented endogenous growth model, utilizing a Cobb-Douglas production function to capture the relationship between output, capital, labor, and trade openness. The model is expanded to incorporate human development index (HDI), exchange rates (EXR), foreign direct investment (FDI), government expenditure (GEXP), and employment (EMP). A three-stage approach is employed. Firstly, an Augmented Dickey-Fuller (ADF) test is used to determine the stationarity of the variables. Then, Johansen's cointegration test is applied to assess long-run relationships between the variables before and after South Africa joined BRICS. Granger causality tests are employed to determine the causal direction between the variables. Finally, a Vector Error Correction Model (VECM) is used to analyze both the short-run and long-run dynamics and relationships between the variables. The study uses annual data from 1980 to 2021, with the pre-BRICS period covering 1991-2010 and the post-BRICS period covering 2011-2021. Data on total trade (as a proxy for trade openness), GDP per capita (economic growth), and HDI (development) are obtained from UNCTAD and WDI databases. The AIC, SBC, and HQ criteria are used to determine the optimal lag length. Impulse Response Function (IRF) and Variance Decomposition analysis are also conducted to assess the dynamic effects of shocks to each variable within the VECM framework.

Descriptive statistics reveal that most variables do not follow a normal distribution in both pre- and post-BRICS periods. The ADF test indicates that all variables are integrated of order one, I(1). Johansen's cointegration test reveals two cointegrating vectors in the post-BRICS period, suggesting a more complex long-run relationship among the variables compared to the pre-BRICS period which only had one cointegrating vector. Granger causality tests reveal unidirectional causality between trade openness (LTRD) and economic growth (LGDP) in the pre-BRICS period, with LTRD Granger-causing LGDP. In the post-BRICS period, LGDP Granger-causes LHDI, while LTRD continues to Granger-cause LGDP. VECM results show that trade openness significantly and positively impacts economic growth in both periods. The VECM analysis also confirms the error correction mechanism; that is, that the variables' disequilibrium will adjust into long-run equilibrium. Impulse response analysis reveals that in the pre-BRICS period, positive shocks to HDI negatively impact economic growth and trade openness in the short run. In the post-BRICS period, positive HDI shocks have a more complex effect on economic growth, showing initial positive effects followed by adjustment. Variance decomposition analysis shows that before joining BRICS, trade openness was primarily driven by its own shocks and exchange rate fluctuations. However, after joining BRICS, exchange rate fluctuations increased their influence on trade openness, whereas the influence of FDI decreased. Exchange rates are the most important influence on economic growth fluctuations. HDI is primarily influenced by its own shocks in both periods.

The findings demonstrate a long-run positive relationship between trade openness and both economic growth and development in South Africa, particularly strengthened after joining BRICS. The unidirectional causality from trade openness to economic growth supports the argument that liberalized trade policies can significantly stimulate economic growth. The evolving cointegration relationships, shifting from one to two vectors after BRICS membership, highlight the increasing complexity and interdependence within the South African economy, reflecting a more integrated global position and the diversification of economic relationships. The VECM analysis reveals that the adjustment speed to long-run equilibrium significantly increased after BRICS membership, implying more responsive economic mechanisms and policy adjustments. The impulse response and variance decomposition analyses offer further insights into the dynamic interactions between HDI, economic growth, and trade openness. The initial negative short-term impacts of human development improvements on economic growth and trade openness suggest a resource reallocation effect. The varying responses in the post-BRICS period highlight the complex interplay of factors influencing these relationships.

This research demonstrates the long-run positive impact of trade openness on economic growth and development in South Africa, particularly enhanced post-BRICS. The findings highlight the importance of continued trade liberalization and suggest that policies should focus on diversification, mitigating exchange rate volatility, and promoting inclusive growth to maximize the benefits of trade openness. Future research could explore the role of technology, regional variations, the impact of the COVID-19 pandemic, and structural breaks on the relationships.

The study relies on aggregate data, potentially masking variations at the regional or sectoral levels. The model may not fully capture all factors influencing economic growth and development, and omitted variables could introduce biases. The study uses total trade as a proxy for trade openness, which may not fully capture all aspects of trade liberalization. Future research could explore alternative measures of trade openness and address the limitations mentioned.