Consolidating South African democracy: The political arithmetic of budgetary redistribution

African Affairs

Volumn 97, Issue 387, 1998, Pages 251-264

  Van Der Berg, Servaas ^a  

^a STELLENBOSCH UNIVERSITY   (South Africa)

Author keywords

[No Author keywords available]

Indexed keywords

DEMOCRACY; POLITICAL ECONOMY; PUBLIC EXPENDITURE; RESOURCES ALLOCATION;

SOUTH AFRICA;

EID: 0031926151     PISSN: 00019909     EISSN: None     Source Type: Journal    
DOI: 10.1093/oxfordjournals.afraf.a007928     Document Type: Article

References (34)

1. Philippe C. Schmitter, 'Dangers and Dilemmas of Democracy', Journal of Democracy, 5, (April 1994), p. 72.
2. Seymour Martin Lipset, 'Social conflict, legitimacy, and democracy', in William Connolly (ed.), Legitimacy and the State (Basil Blackwell, Oxford, 1984), p. 88.
3. Guillermo O'Donnell, 'Introduction to the Latin American cases', in Guillermo O'Donnell, Philippe C. Schmitter and Laurence Whitehead (eds.), Transitions from Authoritarian Rule: Prospects for democracy, Vol. 2 (Johns Hopkins University Press, Baltimore, 1986), p. 11.
4. Larry Diamond, 'Three paradoxes of democracy', Journal of Democracy 1, (Summer 1990), p. 10.
5. Adam Przeworski, 'Some problems in the study of the transition to democracy', in O'Donnell, Schmitter and Whitehead, Transitions from Authoritarian Rule.
6. Though I have previously used this term in a somewhat different context, it seems to fit under the internal dilemmas Schmitter discusses. See Schmitter, 'Dangers and Dilemmas of Democracy'.
7. Dombusch and Edwards define economic populism as 'a policy perspective on economic management that emphasizes economic growth and redistribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies'. R. Dornbush and S. Edwards, 'Macroeconomic populism', Journal of Development Economics 32, (1990), p. 247. Terence Moll has provided the best application to South Africa; Terence Moll, ' "The limits of the possible" Macro-economic policy and income redistribution in Latin America and South Africa', in John Suckling and Landeg White (eds.), After Apartheid: Renewal of the South African economy (James Currey/ Africa World Press, London/New Jersey, 1988); Terence Moll, 'Microeconomic redistributive strategies in developing countries', in Peter Moll, Nicoli Nattrass and Lieb Loots (eds.), Redistribution: How can it work in South Africa? (David Philip, Cape Town, 1991), and Terence Moll, 'Macroeconomic redistributive packages in developing countries', in Moll, Nattrass and Loots (eds.), Redistribution: How can it work in South Africa?
8. Dombusch and Edwards define economic populism as 'a policy perspective on economic management that emphasizes economic growth and redistribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies'. R. Dornbush and S. Edwards, 'Macroeconomic populism', Journal of Development Economics 32, (1990), p. 247. Terence Moll has provided the best application to South Africa; Terence Moll, ' "The limits of the possible" Macro-economic policy and income redistribution in Latin America and South Africa', in John Suckling and Landeg White (eds.), After Apartheid: Renewal of the South African economy (James Currey/ Africa World Press, London/New Jersey, 1988); Terence Moll, 'Microeconomic redistributive strategies in developing countries', in Peter Moll, Nicoli Nattrass and Lieb Loots (eds.), Redistribution: How can it work in South Africa? (David Philip, Cape Town, 1991), and Terence Moll, 'Macroeconomic redistributive packages in developing countries', in Moll, Nattrass and Loots (eds.), Redistribution: How can it work in South Africa?
9. Dombusch and Edwards define economic populism as 'a policy perspective on economic management that emphasizes economic growth and redistribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies'. R. Dornbush and S. Edwards, 'Macroeconomic populism', Journal of Development Economics 32, (1990), p. 247. Terence Moll has provided the best application to South Africa; Terence Moll, ' "The limits of the possible" Macro-economic policy and income redistribution in Latin America and South Africa', in John Suckling and Landeg White (eds.), After Apartheid: Renewal of the South African economy (James Currey/ Africa World Press, London/New Jersey, 1988); Terence Moll, 'Microeconomic redistributive strategies in developing countries', in Peter Moll, Nicoli Nattrass and Lieb Loots (eds.), Redistribution: How can it work in South Africa? (David Philip, Cape Town, 1991), and Terence Moll, 'Macroeconomic redistributive packages in developing countries', in Moll, Nattrass and Loots (eds.), Redistribution: How can it work in South Africa?
10. Dombusch and Edwards define economic populism as 'a policy perspective on economic management that emphasizes economic growth and redistribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies'. R. Dornbush and S. Edwards, 'Macroeconomic populism', Journal of Development Economics 32, (1990), p. 247. Terence Moll has provided the best application to South Africa; Terence Moll, ' "The limits of the possible" Macro-economic policy and income redistribution in Latin America and South Africa', in John Suckling and Landeg White (eds.), After Apartheid: Renewal of the South African economy (James Currey/ Africa World Press, London/New Jersey, 1988); Terence Moll, 'Microeconomic redistributive strategies in developing countries', in Peter Moll, Nicoli Nattrass and Lieb Loots (eds.), Redistribution: How can it work in South Africa? (David Philip, Cape Town, 1991), and Terence Moll, 'Macroeconomic redistributive packages in developing countries', in Moll, Nattrass and Loots (eds.), Redistribution: How can it work in South Africa?
11. The term 'black' is used in this paper in its restricted sense to contrast the poorest racial group with whites; to simplify the analysis, little mention is made of the two groups occupying intermediate position, viz, coloureds and Indians. Blacks make up more than 70 percent of tne population, whites less than 15 percent.
12. Steven Friedman, Another Elephant? Prospects for a South African social contract, Policy Issues and Actors Series 4(1), (Centre for Policy Studies, Johannesburg, 1991), p. 2.
13. J. A. Döckel and A. V. Seeber, 'The behaviour of general government expenditure in South Africa 1948-1984', in Philip A. Black and Brian E. Dollery (eds.), Leading Issues in South African Macroeconomics: Selected readings (Southern, Johannesburg, 1989).
14. Such an opportunity cost calculation does not even consider the wasted manpower on the conflict, the destruction of economic resources, the loss of lives, or the economic growth opportunities foregone by having to continue with inward-looking industrialization in an internationally hostile environment.
15. Steven Friedman 'South Africa's reluctant transition', Journal of Democracy 4 (April, 1993), pp. 56-69, accurately portrays the lack of enthusiasm with which both sides to the conflict entered the transition.
16. If need rather than population share is adopted as the criterion for social spending, discrimination would be shown to be even greater. Then the goal should be horizontal fiscal equity instead of parity, i.e. treating everyone in a similar position similarly, using means tests or other criteria for directing resources at those with the greatest need.
17. Andrew Whiteford and Michael McGrath, Distribution of income in South Africa (Human Science Research Council, Pretoria, 1994) A more recent estimate based on the Living Standards and Development Survey points to a lower Gini coefficient (0·55) for blacks, but confirms growing inequality amongst black households. See Catherine Ann Janisch, 'An analysis of the burdens and benefits of taxes and government expenditure in the South African economy for the year 1993/94', Masters dissertation, University of Natal, Pietermaritzburg, 1960, p. 54.
18. Andrew Whiteford and Michael McGrath, Distribution of income in South Africa (Human Science Research Council, Pretoria, 1994) A more recent estimate based on the Living Standards and Development Survey points to a lower Gini coefficient (0·55) for blacks, but confirms growing inequality amongst black households. See Catherine Ann Janisch, 'An analysis of the burdens and benefits of taxes and government expenditure in the South African economy for the year 1993/94', Masters dissertation, University of Natal, Pietermaritzburg, 1960, p. 54.
19. For evidence in this regard see Servaas van der Berg, On interracial income distribution in South Africa', South African Journal of Economics 57, (1988), and Urban Foundation, Income Distribution Model, (Urban Foundation Policies for a New Urban Future, Johannesburg, September 1991).
20. For evidence in this regard see Servaas van der Berg, On interracial income distribution in South Africa', South African Journal of Economics 57, (1988), and Urban Foundation, Income Distribution Model, (Urban Foundation Policies for a New Urban Future, Johannesburg, September 1991).
21. John Sheahan, 'Economic policies and the prospects for successful transition from authoritarian rule in Latin America', in O'Donnell, Schmitter and Whitehead, Transitions from Authoritarian Rule, p. 162.
22. This also appears to be the 'Washington consensus', judging by recent studies by the World Bank and IMF: P. Fallon and L. A. Perreira da Silva, South Africa: Economic Performance and Policies. Informal Discussion Paper on Aspects of the South African Economy No. 7, (World Bank Southern Africa Department, Washington, D.C., 1994); Desmond Lachman and Kenneth Bercuson (eds.), Economic policies for a new South Africa, Occasional Paper 91, (International Monetary Fund, Washington, D.C., 1992). For a critical assessment, see Jonathan Stewart, An assessment of the growth prospects of the South African Economy: A survey of recent studies (Stellenbosch Economic Project Occasional Paper, Stellenbosch, 1994), who argues that these and other projections appear overly optimistic.
23. This also appears to be the 'Washington consensus', judging by recent studies by the World Bank and IMF: P. Fallon and L. A. Perreira da Silva, South Africa: Economic Performance and Policies. Informal Discussion Paper on Aspects of the South African Economy No. 7, (World Bank Southern Africa Department, Washington, D.C., 1994); Desmond Lachman and Kenneth Bercuson (eds.), Economic policies for a new South Africa, Occasional Paper 91, (International Monetary Fund, Washington, D.C., 1992). For a critical assessment, see Jonathan Stewart, An assessment of the growth prospects of the South African Economy: A survey of recent studies (Stellenbosch Economic Project Occasional Paper, Stellenbosch, 1994), who argues that these and other projections appear overly optimistic.
24. This also appears to be the 'Washington consensus', judging by recent studies by the World Bank and IMF: P. Fallon and L. A. Perreira da Silva, South Africa: Economic Performance and Policies. Informal Discussion Paper on Aspects of the South African Economy No. 7, (World Bank Southern Africa Department, Washington, D.C., 1994); Desmond Lachman and Kenneth Bercuson (eds.), Economic policies for a new South Africa, Occasional Paper 91, (International Monetary Fund, Washington, D.C., 1992). For a critical assessment, see Jonathan Stewart, An assessment of the growth prospects of the South African Economy: A survey of recent studies (Stellenbosch Economic Project Occasional Paper, Stellenbosch, 1994), who argues that these and other projections appear overly optimistic.
25. Ueb Loots, 'The post-apartheid challenge to fiscal policy', in Robert Schrire (ed.), Wealth or Poverty? Critical choices for South Africa. (Oxford University Press, Cape Town, 1992); also Lieb Loots, 'A tax strategy for redistribution', in Moll, Nattrass & Loots, Redistribution: How can it work in South Africa?
26. Ueb Loots, 'The post-apartheid challenge to fiscal policy', in Robert Schrire (ed.), Wealth or Poverty? Critical choices for South Africa. (Oxford University Press, Cape Town, 1992); also Lieb Loots, 'A tax strategy for redistribution', in Moll, Nattrass & Loots, Redistribution: How can it work in South Africa?
27. Loots, 'The post-apartheid challenge to fiscal policy'; see also Dennis Davis, 'Taxation in a post-apartheid South Africa', in Schrire (ed.), Wealth or Poverty?.
28. Loots, 'The post-apartheid challenge to fiscal policy'; see also Dennis Davis, 'Taxation in a post-apartheid South Africa', in Schrire (ed.), Wealth or Poverty?.
29. Servaas van der Berg, 'Social reform and the reallocation of social expenditure', in schrire, Wealth or Poverty?
30. Only social spending by government is covered here, so this definition of secondary income is somewhat limited.
31. However, the large reduction shown in the social benefits of coloureds and Indians may partly be a result of deficient baseline figures for these groups taken from the IMF study, Lachman & Bercuson, Economic policies for a new South Africa.
32. Andrew Donaldson, 'Restructuring social services', in Schrire (ed.), Wealth or Poverty? p. 147.
33. This does not even address the issue of redirecting resources within social programmes to areas of greatest need (e.g. to primary rather than tertiary education, or to primary rather than hospital-based health care). This is more properly covered in Donaldson, 'Restructuring social services'.
34. Friedrnan, Another elephant? Prospects for a South African social contract.