A promise to reduce extreme poverty through a post-minority-rule redirection of public resources and services.Īll of these subbargains except for the last one, which was pursued at least into the 2010s, were built on shaky foundations.Another aspect was a promise that a combination of education, job creation, and an end to racial discrimination would open up readily accessible opportunities for those on the cusp of middle-class status. One aspect was a commitment to protect the interests of new (predominantly black) middle-class insiders. Its implicit promise was that its formal structures, plus the structures of government, would channel this diversity toward a shared national purpose. The ANC is a broad tent encompassing many ideological proclivities degrees of public-spiritedness and regional, ethnic, and economic interests. A deal among the new political elites within the majority political party, the African National Congress (ANC).This included commitments to the rule of law (including protection of private property), and to economic transformation, including through the Black Economic Empowerment (BEE) program. A deal between the overwhelmingly white economic elite and the country’s new political leadership.South Africa’s political settlement was built around four distinct subbargains: This increased the vulnerability of South Africa’s political settlement. There was ample reason for the majority of South Africans to feel that, notwithstanding the promises of mutual benefit, the deck remained stacked against them. Less than a quarter of the total population, including essentially all white South Africans, enjoyed a standard of living that was middle class or better. Gains for the poorest did little to alter their difficult economic and social realities. There were, however, some stark limitations in what was achieved. Increased fiscal space made it possible to broaden access to public services and to social grants, which reduced absolute poverty. Growth began to accelerate, which created new opportunities for expanding the middle class. This enabled the country to move beyond counterproductive conflict and pursue win-win outcomes. The result can be a cascading set of pressures and an accelerating downward spiral.įor the first fifteen years of democracy, South Africa enjoyed the advantages of both effective institutions and a shared willingness of stakeholders believed in the power of cooperation. However, such a benign scenario does not reckon with the ways in which persistent high inequality, accompanied by unresolved tensions between the distribution of economic and political power, can both put pressure on institutions and quickly change hope into anger. Together, ideas and institutions provide credible commitment, which fuels economic growth. Institutions assure that the bargains underpinning cooperation will be monitored and enforced. Ideas offer hope by encouraging cooperation and the pursuit of opportunities for win-win gains. Ideally, ideas, institutions, and growth all reinforce one another in a virtuous developmental spiral. Understanding why this collision occurred and worsened over time is relevant not just for other middle-income countries but also many higher-income democracies wrestling with similar tensions between a declining tolerance for high or rising inequality and institutions that seemed strong in the past but find their legitimacy increasingly being questioned. The collision intensified across the 2010s, resulting in economic stagnation and increasing threats to institutional integrity. Yet starting in the mid-2000s, the country began to experience a disruptive collision between its strong political institutions and massive economic inequality. South Africa was one of the 1990s iconic cases of democratization.
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