The Post-Apartheid Development Debacle in South Africa: How Mainstream Economics and the Vested Interests Preserved Apartheid Economic Structures

Nelson Mandela and the African National Congress (ANC) were persuaded by mainstream economists and South African businesses to pursue neoliberal policies. The ANC implemented policies that made South Africa more open to international trade and financial flows along with privatization and austerity, other than a modest increase in social expenditures. After twenty-three years of such policies, we can judge their effectiveness. Unfortunately, neoliberalism worsened the inequality created under apartheid and failed to stimulate significant growth and development. This article documents the extent to which the maintenance of key apartheid-era institutions, under the guise of “market friendly policies,” undermined the prospects for long-term economic and human development in South Africa. This post-apartheid development debacle should go down in history as one of the great failures of mainstream economics and its neoliberal policy recommendations. Breaking the cycle of uneven development in South Africa will require fundamental changes in institutions, including changes in democracy, ownership structures, and the very nature of the economic system. This article offers some ideas for how an adjusted institutional structure might reconfigure the social provisioning process in South Africa to address racial divisions and lingering inequality.     

Gender,Generation and the Experiences of Farm Dwellers Resettled in the Ciskei Bantustan,South Africa,ca 1960–1976

This paper examines the experiences of farm dwellers resettled in rural townships in the Ciskei Bantustan during the decades of the 1960s and 1970s. Drawing on the oral testimonies of elderly residents of Sada and Ilinge townships, the paper shows how gendered and generational inequalities within households were crucial factors shaping individuals' experiences of resettlement from the farms. The paper engages with an older literature that regarded the abolition of labour tenancy and linked resettlement programmes as the final stage of farm tenants' proletarianization. It highlights the problems of this linear narrative, and argues that men and women experienced and understood this process in radically different ways. Male labour migration and the remnants of farm paternalism meant that while resettlement cemented the status of migrant men, for women and non‐migrant men this process was characterized by contradiction: on the one hand, escape from the spatial hegemonies of farm paternalism and, on the other, heightened economic exposure.     

Apartheid and business: Competition,monopoly and the growth of the malted beer industry in South Africa

The South African brewing industry experienced enormous growth in the apartheid era, following the lifting of prohibition on the sale of ‘European liquor’ to Africans in 1961. Successive international brewers and local entrepreneurs sought to benefit from increased demand in the 1970s but were unable to withstand competition from South African Breweries (SAB), the dominant player in the industry. A decade of intense competition in the brewing industry ended with the intervention of the cabinet of the Afrikaner Nationalist government. SAB's status as ‘sole supplier to the industry’ remained virtually unchallenged until the demise of apartheid and the end of South Africa's international isolation. The end of apartheid and changes in the global brewing industry brought renewed competition to the South African beer market in the late 1990s and early 2000s.     

Social Transfer Benefits and Retirement Decisions: Evidence from South Africa

Population aging poses a new challenge to the fiscal sustainability of social security programs around the globe. As life expectancy increases, among other reasons, many governments in developed countries have begun to reform key features of their programs, such as increasing the eligibility age for access to social benefits. However, as in the case of South Africa, some opt to decrease the eligibility age for access to such pension benefits. The South African old age pension, which is one of the most expansive cash transfers in developing countries, puts a significant monthly cash transfer in the hands of its recipients. This cash transfer is conditioned on age and a means test that is very generous to most South Africans. In this paper, we seek to understand the impact of such an increase in non‐labour income on the labour force participation of older men by exploiting a phased‐in reduction in pension eligibility age. We estimate that, at the median predicted market wage, pension age‐eligibility reduces the probability of labour force participation by approximately 9.85% points for single males and 15.45% points for married males.     

Occupational segregation by race in South Africa after apartheid

This paper investigates progress in reducing the high level of racial stratification of occupations after apartheid in South Africa. Empirical analysis, using census microdata and Labour Force Surveys, does not provide compelling evidence of sustained or significant desegregation. Occupations remain highly segmented by race, with blacks disproportionally holding low‐paying jobs (compared with whites), although segregation and segmentation also affect in a different way the other population groups (Indians/Asians and Coloureds). Less than a third of the occupational segregation and about half of the segmentation of Africans (with respect to whites) are related to their characteristics, especially their lower educational achievement, a gap that has been reduced over time. Segregation and stratification, however, remain when blacks and whites with similar characteristics are compared.     

Racial land zoning in urban South Africa

The imposition of the policy of apartheid upon South African urban areas after the National Party electoral victory in 1948, led to profound changes in spatial planning and population distribution. All urban places were zoned with sectors set aside for the mutually exclusive ownership and occupation of legally defined racial groups. Between 1950 and 1991 over 1 million hectares of urban land were zoned in racial terms. Massive population movements took place to fit the population to the plans, which had built-in disparities between groups in access to urban land. Even with the repeal of this legislation, South African cities exhibit the heritage of apartheid planning, with the racially defined zones still apparent in the urban form.     

THE EMERGENCE OF INSTITUTIONALISED SOCIAL DIALOGUE IN SOUTH AFRICA

This paper looks at the conceptual framework of social dialogue, investment in social capital and some international definitions of social dialogue as background to developments in this sphere in South Africa. Social dialogue is viewed as a mechanism for problem‐solving and reducing transaction costs. The paper considers the ramifications of the 1979 Wiehahn Report on labour relations, as well as the nature of social dialogue in the apartheid era and its workplace origins. Institutionally, the stepping stones to the emergence of the NEF and Nedlac are discussed, together with some of the issues involved in, and formal outcomes of, Nedlac over the past eleven years in public policy choices. It closes with an evaluation of institutionalised social dialogue in South Africa and its future. “With the transition to non‐racial democracy in 1994, it became the task of an ANC‐led government to attempt to resolve the economic contradictions that apartheid had created. To achieve this requires massive economic and social changes, great programmes of investment and structural change. It is necessary to create the vital human capital needed at every level, from rudimentary literacy to the highest ranks of science and technology; to overcome enormous deficiencies in all forms of social infrastructure, including housing, schools, health, and transport; to return land to the black population and restore ravaged rural areas; to expand black ownership of mining, industry, commerce, and finance; and to diminish enormous inequalities in income and wealth. The new regime has made a promising start, but South Africa's past will exert a powerful influence on its present and future for a long time to come, and these huge tasks will not be swiftly or easily accomplished.” Charles Feinstein (2005 )     

Elite Compacts in Africa: The Role of Area‐based Management in the New Governmentality of the Durban City‐region

Through reflection on the practical post‐apartheid (re)alignment of competing rationalities across the Greater Durban urban region, this essay teases out the interface between traditional and modern settlement management systems, and explores how governance cleavages are being renegotiated and mediated. It is suggested that, in building an integrated method of operating across the fragmented city‐regional scale and navigating the competing interests involved, the practice of African urbanism is being defined. Without making any claims for what may or may not be uniquely African city‐regional dynamics at the boundaries of tradition and modernity, what is clear from the Durban case is that both conventional city‐regional literature and new city‐regional ideas have glossed over the complexity of finding solutions to tensions between poor communities, urban managers, elected local authorities and the traditional rural elites of the functional city‐regions of Africa.     

Do Women and Ethnic Minority Directors Influence Firm Value? Evidence from Post‐Apartheid South Africa

Previous studies on the value relevance of board gender and ethnic diversity have produced mixed results. This paper re‐examines this relationship using hand‐collected data of 245 South African listed firms over the period 2008–2013. We document a positive and significant effect of both board gender and ethnic diversity on firm value. We also find that the increase in firm value is greater when boards have three or more women directors. In contrast, ethnic minority directors contribute less to firm value when there are three or more on the board. Furthermore, we document that ethnicity has a concave relationship with firm value, but gender does not. We demonstrate that in better‐governed firms, ethnic diversity is more value relevant than gender diversity. Our results also suggest that financial crisis is associated with the propensity to restructure boards along gender and ethnicity. This paper sheds new light on the effect of board diversity in South African firms as the government increasingly pursues policies aimed at eradicating the effects of apartheid. Our results are robust after controlling for self‐selection and various forms of endogeneity.     

Entrepreneurial Challenges in South Africa

ABSTRACT

This purpose of the research was to examine how entrepreneurs experience and deal with ethical dilemmas. In so doing, the author also uncovered some interesting aspects of entrepreneurial life in South Africa. This was a phenomenological study, based on interviews with seven entrepreneurs in established service-oriented ventures. For the purposes of this research, an entrepreneur was defined as a person who has created something of value and assumed the risk of establishing and managing a business around it. Each of the participating entrepreneurs was asked to describe their business, any dilemmas they've experienced, how they were handled, and what challenges they experience as an entrepreneur in South Africa today. This paper focuses on how entrepreneurs in South Africa view the challenges facing them. These include overcoming the legacies of apartheid, containing crime, fostering an acceptable business ethic, dealing with diversity, and facilitating reconciliation between ethnic groups.