Development Debate and Practice Revisiting the South African magisterial districts of 1999

During the constitutional talks that preceded the democratic election of South Africa in 1994, final agreement could not be reached on the position of all new provincial boundaries. This resulted in so-called ‘hard’ and ‘soft’ boundaries, the former referring to sections of boundaries on which there was general agreement, and the latter to those where there were still differences of opinion about their position between the negotiating parties. Yet, as the building blocks of the new provinces and as the regional units most often used for planning and administrative purposes, it is the magisterial districts that were most severely distorted by the system of apartheid. In view of the changes that are taking place in the local government system of South Africa currently, especially the new district boundaries that have been announced by the Demarcation Board in November 1999, the distorting effect apartheid had on the boundaries of the previous magisterial districts, is demonstrated in this article. Various distortions are pointed out and changes are suggested which could significantly improve local, provincial and national governance in South Africa, if implemented.     

The impact of environmental change on relocated communities in South Africa

The last thirty‐five years have seen the relocation of several million people in South Africa, for reasons related mainly to the implementation of the South African government policy of ‘apartheid’ or ‘separate development’. As a result, most studies of relocation have focused on the political causes and aspects of relocation, often to the neglect of its social consequences.

Community relocation, whatever its causes, involves the transformation of the physical and social environment in which people find themselves. This paper suggests that a focus on the nature and degree of environmental modification involved in particular cases of relocation will provide a useful start to understanding the social and economic consequences of relocation in South Africa. Various kinds of relocation (relating to Betterment Planning, Group Areas, relocation townships and closer settlements) are considered in these terms.     

The South African city in relation to international city form

South Africa's apartheid‐induced cities are on the threshold of a critical restructuring in the changing South Africa of the 1990s. The reform and planning of an effective post‐apartheid city require careful consideration of possible international similarities and links. This article seeks to provide answers to the following questions: What are the form and structure of international cities; what are the general characteristics of the South African city; and where do our cities fit in this international framework? Research has shown that the South African city corresponds to a multi‐faceted international profile of First World prosperity. Second World central intervention and Third World deprivation. While the South African city displays numerous similarities to international city form, it has obtained a unique character as a result of the legal enforcement of apartheid. Restructuring the post‐apartheid city will have to take account of the reality that the present South African city is intrinsically a deviant version of the colonial Third World city and that it is likely to revert increasingly to that city form as legal apartheid disappears.     

South African social security under apartheid and beyond 1

Under apartheid, the trappings of a welfare state for whites were created. Over time, social security was gradually extended to other groups, and recently social assistance benefits were equalised. This left South Africa with high social security levels for a middle‐income developing country. However, the social security system still largely reflects the historical needs of vulnerable white groups under apartheid, among whom unemployment was minimal, given their preferential access to jobs and education. Thus the social security system now has inadequate provision for the most vulnerable, the unemployed. In contrast, four out of five pensioners receive a means‐tested social pension — a major poverty‐alleviating factor in rural black communities. This article analyses the social security system against the backdrop of apartheid and the more recent democratisation, and assesses its major deficiencies, the forces acting for its expansion and the binding fiscal constraint.     

'Don't owe,won't pay!': A critical analysis of the Jubilee SA position on South African government debt

Jubilee 2000 (SA) supports the cancellation of South African national government (and other) debt on the grounds that it is odious debt from the apartheid years. The organisation has called for foreign creditors to cancel the debt voluntarily and has threatened to call for debt repudiation if such cancellation is not forthcoming. However, unlike voluntary debt cancellation, debt repudiation would probably have serious consequences for investment and growth. Furthermore, as most government debt has accumulated after the end of apartheid, and as most is domestic and marketable, the moral argument for repudiation is problematic. Jubilee 2000 (SA) is also calling for the government pension scheme (which owns a large proportion of the domestic government debt) to be restructured. Contributions to the pension fund may be excessive (as argued by Jubilee 2000), but the case is not clear. South Africa should publish a dual set of accounts in line with how other countries report their liabilities so as not to overstate the deficit in the eyes of investors.     

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 )     

Development policy and water services in South Africa: an urban poverty perspective

This paper explores the impact of overall macroeconomic development policy on water service delivery policy and urban poverty in South Africa. It scrutinises ambiguous definitions of ‘urban’ in the literature, which tend to obscure the extent of urban poverty in this country. This is crucial given that a large proportion of the urban poor live in informal settlements, which are sometimes lumped with rural areas. Informal settlements are generally characterised by limited essential services such as housing, water supply, storm-water facilities and sanitation services. Water services, like other social services, retain the racial imprint of apartheid. Consequently, water policy in South Africa attempts to address water issues from an equity perspective. By analysing the effects of the tariff subpolicy within the water policy, the paper recommends that free basic water should be made available only to poor households.     

Supporting Local Economic Development in Post-Apartheid South Africa

South Africa's apartheid era has left a bitter legacy of retarded economic development. Local Economic Development has been identified by the South African government as a key strategy through which issues of development and, more importantly, poverty alleviation can be addressed by local governments. This paper reviews current Local Economic Development policy in South Africa, before proceeding to an examination and analysis of the impact of the primary government support mechanism designed to promote such development initiatives, namely the Local Economic Development Fund. Whilst such support is of vital importance, far greater levels of intervention will be needed to fully address the massive scale of current local development needs.     

South Africa's ten years of democracy: development and media discourse

Newspapers play an important role in selecting, defining and communicating pertinent social issues, especially during changing times. Yet, in the case of the transition to a new dispensation in South Africa, it seems that there has been very little sustained analysis of the news media in terms of its approach to social change before 1994. Hence the apparent lack of vigorous public engagement about the interplay between contending relations of power and the way that conflictive relations are being dealt with in terms of either maintaining or changing the status quo. For example, even in instances where popular discourses were in favour of changing the apartheid order to a more humane society, it would appear that social change was discussed in a way that meant that any alternative understanding was based on an a priori set of assumptions about what would be a suitable socio-economic order for South Africa. Hence the contradiction between election promises of a ‘better life for all’ and the current increasing levels of poverty in South Africa.     

Overcoming underdevelopment in South Africa's second economy

This paper is a synthesis of the July 2005 Development Report published by the Development Bank of Southern Africa, Human Sciences Research Council and United Nations Development Programme (DBSA, HSRC and UNDP). The Report asks why, if the origins of economic dualism are rooted in the cheap, forced, migrant labour introduced by the mining industry and reinforced during apartheid, does dualism persist under democracy when all the relevant laws and many of the practices of the past have been abolished? The breakdown of apartheid did not immediately translate into improved material conditions for the majority of South Africans: 300 years of colonialism and 50 of internal colonialism had hard-wired a duality into the system. Two worlds, which may be conceptualised as the first and second economies, coexisted: a globally integrated world of production, exchange and consumption, and a constrained world of informality, poverty and marginalisation. This synthesis sheds light on the origin and nature of the ‘second economy’ metaphor, and suggests solutions.     

EXPLAINING THE GROWTH OF GOVERNMENT SPENDING IN SOUTH AFRICA

What determines government spending in South Africa? The paper estimates the determinants of real per capita government spending in the Republic of South Africa using annual data for the period 1960‐2007, a tumultuous period during which South Africa experienced a variety of internally imposed changes (e.g. the abolition of apartheid, changes in political institutions) and externally generated shocks (e.g. war, oil shocks). Using multivariate cointegration techniques, we find that per capita government spending, per capita income, the tax share and the wage rate are cointegrated, a result that supports the notion that government spending is associated not only with per capita income and the true cost of government service provision as given by the wage rate but also with the fiscal illusion caused by budget deficits. We also find evidence that per capita government spending was positively affected by external shocks. These external shocks seem to play a significant role in explaining the dynamics of government spending growth.     

The paradox of Black pupil enrolment growth rates in South African schools

In this paper, an outline is presented of a paradoxical feature of past trends in the demand for and supply of schooling to the Black population of South Africa. The paradox is that demand for Black schooling increased despite disincentives to do so under the apartheid policy. As background, a brief historical review of the provision of schooling to Blacks is also presented.     

Breaching the barriers: The segmented business and innovation system of handicraft exports in Cape Town

Twenty years after apartheid was formally abolished, black handicraft exporters in Cape Town still innovate significantly less than their white counterparts. This study explains these differences based on the segmentation of business and innovation systems, a novel approach that aims to contribute to a deeper understanding of path dependency in South Africa. The study concludes that the business system is segmented between formal and informal firms and that such segmentation is correlated with race. Despite path dependency, a group of black entrepreneurs has managed to breach the barriers, owing to the ongoing support of an intermediate organisation, intense networking and risk-taking.     

The legacy of the Separate Amenities Act: Perceptions of recreation and future planning in the Northern Province,South Africa

Since 1990, South Africa has been undergoing a socio‐political transformation from apartheid to non‐racial democracy. This transformation culminated in April 1994, with the first‐ever general election in which people of all races participated. However, in this period of change there has not been much integration of previously separate recreational spaces, especially in more conservative regions such as the Northern Province. This article examines the perceptions, knowledge and awareness of urban blacks with regard to outdoor recreation. It also explores their expectations under the new political dispensation, as envisaged by the Reconstruction and Development Programme (RDP) of the new government. Finally, it looks at five key aspects of planning and development for deprived communities, namely education, marketing, structural constraints, public participation in development, and the development of tourism.     

SYNCHRONISATION BETWEEN SOUTH AFRICA AND THE U.S.: A STRUCTURAL DYNAMIC FACTOR ANALYSIS

This paper studies the synchronisation of the South African and the US cycles and transmission channels through which supply and demand shocks from the US affect economic activity in South Africa in a structural dynamic factor model framework. We find, using the full-sample period, US supply shocks are transmitted to South Africa through business confidence and imports of goods and services; while US demand shocks are transmitted via interest rates, stock prices, exports of goods and services, and real effective exchange rates. Second, there is a decrease in integration over time translated by a drop in synchronisation of cycles. The impact of an increase in comovement of GDP is outweighed by the structural reforms initiated by the government after the end of apartheid. Finally, the idiosyncratic component still plays an important role in the South African economy.     

Skills in South Africa: The journey towards credible planning

ABSTRACT

Since 1994 the state has instituted active labour market policies to redress the apartheid skills legacy. The skills planning challenge continues to be how to coordinate efforts for the provision of the right skills to support inclusive economic growth, ensuring an alignment is achieved between what is required in the labour market and the supply from the education and training system. This article traces the South African journey of skills planning from late apartheid until the current time period in 2014 through a historical analysis of the political economy. The analysis reflects on the relationship between state formation in South Africa and the role of the state in directing skills development, and in the more recent period how skills planning responds to both the demands of the economy and ameliorating the historical legacies of education and skills exclusion.     

THE EFFECT OF THE SOUTH AFRICAN OLD AGE PENSION ON LABOUR SUPPLY OF THE ELDERLY

In this paper, we estimate the effect of the means tested South African Old Age Pension on labour supply amongst the elderly African subpopulation in South Africa. We find significant decreases in employment rates and labour supply. Those who remain employed beyond the pensionable age are more likely to work in jobs with flexible hours of work, and work even fewer hours than people in similar jobs who are not pension age‐eligible. Our results suggest that governments do need to consider the labour supply related incentives provided via its various welfare programmes.     

Wages and Wage Inequality in South Africa 1994–2011: Part 2 – Inequality Measurement and Trends

We analyse the long‐term trends in wage inequality in South Africa, using household survey data. We show that the trends in household income inequality are largely driven by changes in wage inequality. Given the detailed nature of our series we show that measurement issues and breaks in the series need to be dealt with in order to draw robust conclusions from the data. Most standard inequality measures show that wage inequality has increased over the period. Nevertheless the choice of measure matters, because there are different trends in different parts of the distribution. It appears that the distribution below the median has become more compressed, while the top of the wage distribution has moved away from the median. The inequality in the labour market translates into even higher inequality in society given that high earners tend to live together with other high earners while low wage individuals often end up sharing their incomes with the unemployed. Furthermore there are many South Africans with access to no wage income. Given the trends analysed here it is not surprising that overall inequality in South Africa has not come down or has even increased since the end of apartheid.     

Wages and Wage Inequality in South Africa 1994–2011: Part 1 – Wage Measurement and Trends

We analyse the long‐term trends in wage inequality in South Africa, using household survey data. We show that the trends in household income inequality are largely driven by changes in wage inequality. Given the detailed nature of our series we show that measurement issues and breaks in the series need to be dealt with in order to draw robust conclusions from the data. Most standard inequality measures show that wage inequality has increased over the period. Nevertheless the choice of measure matters, because there are different trends in different parts of the distribution. It appears that the distribution below the median has become more compressed, while the top of the wage distribution has moved away from the median. The inequality in the labour market translates into even higher inequality in society given that high earners tend to live together with other high earners while low wage individuals often end up sharing their incomes with the unemployed. Furthermore there are many South Africans with access to no wage income. Given the trends analysed here it is not surprising that overall inequality in South Africa has not come down or has even increased since the end of apartheid.     

INFLATION IN SOUTH AFRICA: A TIME‐SERIES VIEW ACROSS SECTORS USING LONG‐RANGE DEPENDENCE

In this paper I examine the time‐series evolution of the log consumer price index series in South Africa, disaggregating the data by sectors. I examine the time period 1990m1‐2008m12, i.e. focusing on the post‐apartheid period. I used methodologies based on fractional integration using parametric and semiparametric techniques. The results indicate that the (total) inflation rate in South Africa is long memory, with an order of integration in the range (0, 0.5). The same happens with most of the data disaggregated by sectors with values of d above 1 in the log prices. Evidence of I(0) inflation is obtained in some cases for “fruits and nuts”, “vegetables” and “sugar”, and evidence of mean reversion in the log prices is only obtained in the case of “fish and other seafood”.