International Finance Discussion Papers (IFDP)
May 2009
South Africa's Post-Apartheid Two-Step: Social Demands versus Macro Stability
Brahima Coulibaly and Trevon D. Logan
Abstract:
During Apartheid, there was little need for redistributional policies or to borrow for public works since the vast majority of the population was underserved. With the arrival of a representative democracy in 1994, however, South Africa faced a unique problem--providing new and improved public services for the majority of its citizens while at the same time ensuring that filling this void would not undermine macroeconomic stability. Over the past fifteen years, policy makers have achieved macrostability, but progress on social needs has been below expectations and South Africa continues to lag behind its peers. This paper reviews the progress made so far and examines the challenges ahead for the upcoming administration. Our analysis suggest an increase in skill formation as a possible solution to the policy dilemma of fulfilling the outsized social demands while maintaining macrostability.
Full paper (screen reader version)Keywords: Apartheid, social needs, stability, welfare, macroeconomy
PDF: Full Paper
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