Impact of Macroeconomic, Institutional and Structural Factors on Inequality in South Africa

Income inequality especially remains high in South Africa. This article investigates the impact of macro-economic, institutional and structural factors on inequality across the nine provinces of South Africa. Using a panel data econometric technique, the determinants/ drivers of inequalities are estimated. The rate of openness (globalization) of an economy, the level of financial inclusion, the status of physical infrastructure, governance indicators, and socioeconomic and institutional factors are explored as explanatory variables. The article concludes with a presentation of the challenges and policy options required to address social and economic inequalities in South Africa.


Poverty, Inequality and the Nature of Economic Growth in South Africa

During the first decade of democracy in South Africa, the economy has recorded one of its longest periods of positive economic growth in the country’s history. One of the more vexing issues within the economic policy terrain in post-apartheid South Africa though, has been the impact of this consistently positive growth performance on social welfare, specifically income poverty and inequality. Many observers have highlighted the potential harmful consequences of persistently high levels of poverty and, particularly economic inequality, on the quality and sustainability of democracy (See for example Bermeo, 2009; Kapstein & Converse, 2008 and Wells & Krieckhaus, 2006). High levels of inequality have been linked to behaviours such as decreased voter turnout, depressed political engagement and high crime rates – all of which can have a negative impact on the quality of democracy. Increasing levels of income inequality also have the potential to divide citizens and contribute to social conflict. In such a situation, the diverse pressures on a government can lead to politicians resorting to surreptitious tactics such as “playing some voters off against each other” (Bermeo, 2009).


Poverty Trends in South Africa

Household expenditure surveys, like the Income and Expenditure Survey (IES) and Living Conditions Survey (LCS), are fundamental components to a survey programme of any statistical agency. They are an essential building block for the consumer price index (CPI) to stay current with the changing spending and consumption patterns of the country and are the best sources of data for the measurement of money-metric poverty and inequality. The consistent approach to the collection of expenditure data through these tools since the IES 2005/2006 allows us to measure trends in the poverty situation of the country between 2006 and 2011.


Inequality in Southern Africa

The Southern African region is characterised by unacceptable high levels of unemployment, poverty and inequality. In many cases, poverty and inequality are on the increase, particularly in countries in crisis such as Zimbabwe and Swaziland. Neither agricultural economies such as Malawi nor resource-rich countries such as Namibia, South Africa and Angola have been able to significantly reduce wealth gaps and the rates of poverty and unemployment.


Current Poverty and Income Distribution in the Context of South African History

In South Africa with its high levels of racial inequality, inequality in income distribution is especially large and persistent. For an upper-middle income country (in terms of GDP per capita and economic structure), South African social indicators (e.g. life expectancy, infant mortality or quality of education) are closer to those of lower-middle income or even low income countries. This reflects the unequal distribution of resources and opportunities. A small group of highincome earners sharply increases average incomes, but has little impact on average social indicators, which are low because of this very same inequality. Even in 1995, before the full advent of AIDS, South African life expectancy at birth was only 63 – ten years less than that of Panama, a country of comparable income, and four years less than that of the Philippines, a country with one-third of South Africa‟s per capita income (World Bank 1997).


Inequality in South Africa

South Africa is one of the most unequal countries in the world. It is often said to be the most unequal, but that is incorrect. A number of countries, for example Namibia and Seychelles, have higher gini coefficients (the measure most often used to measure income distribution) than does South Africa. There are a number of other countries that are clearly very unequal – some major oil producers for example – but, for obvious reasons, choose not to measure the extent of their inequality.


Gender inequalities in South African society

South Africa’s national policy framework for women’s empowerment and gender equality, which was drafted by the national Office on the Status of Women, was the focus of two hearings held in Durban last month. These gave participants from government and civil society the opportunity to discuss priority issues for national and provincial action plans, recommend structures and institutions for implementation and debate areas for cooperation between civil society and the Office on the Status of Women.

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Gender Equality and Social Dialogue in South Africa

This report constitutes the South African report for a comparative research project on social dialogue and gender equality being coordinated by the Industrial and Employment Relations Departments (DIALOGUE) of the International Labour Office (ILO). The research project aims to deepen knowledge on how gender equality issues are promote through social dialogue at the national level. The research project is being undertaken as a follow-up of the Conclusions of the Committee on Gender Equality adopted at the 98th Sessions of the International Labour Conference in June 2009 (International Labour Conference, 2009).


Women Empowerment and Gender Equality Bill

To give effect to section 9 of the Constitution of the Republic of South Africa, 1996,in so far as the empowerment of women and gender equality is concerned; to establish a legislative framework for the empowerment of women; to align all aspects of laws and implementation of laws relating to women empowerment, and the appointment and representation of women in decision making positions and structures; and to provide for matters connected therewith.


Inequality in Education

Several leading development agencies had posited education and equity as key themes at the onset of the 21st century. The United Nation’s Millennium Development Goal (MDG) No.2 “Achieve Universal Primary Education” and MDG No.3 “Promote Gender Equality and Empower Women” are devoted to educational attainment and equity on a global level. UNESCO’s Institute for Statistics (Sherman & Poirier 2007) recently published a book that compares education equity among 16 of the world’s largest countries. Although the focus of this UNESCO volume was limited—using access to formal schooling and allocated resources to education as operational definitions of equity in the case countries the selection of this topic by UNESCO emphasizes the urgency of education inequality analysis by and for educators, researchers, and policy makers. The World Bank’s World Development Report (WDR) features a global development issue thought to be especially timely.


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