Developing the developmental state

Get more specific than the broad macro-economics of the Washington Consensus, and look at how the state-market combo affects poverty and inequality. This was the view of Professor Murray Leibbrandt at the Rhodes politics teach-in on Thursday.

Implementing his advice, he painted a picture of a South African imbalance: the market had generated an even more unequal society than in 1994, while the state sought greater equity.

And he noted a further imbalance: the unequal South African market still delivers resources to the state (taxes), but the state isn’t delivering properly to the poor.

“We must be one of the top five spenders worldwide on social welfare,” he said, pointing to the expansion of social grants since 2000.

These had definitely hugely affected poverty, and factors such as child nutrition, school attendance and performance in school. But Leibbrandt suggested that because there were no conditionalities for the receivers, unlike in many other countries, the impact might not be as high as it should.

In Brazil and Mexico, for instance, a child-support grant was only paid on evidence that the child attended school and had inoculations.

Leibbrandt pinpointed skills shortages in the state as responsible for poor delivery, referring to education as an example. While the state had increased average years of schooling from seven in 1994 to 9,5 today, it still only meant education up to the middle of secondary school — whereas markets wanted matriculants.

But seeing that education was not a public works programme, designed to give jobs to teachers, there could be opportunities for the market, and technology, to deliver more effectively, he argued.

The director of the Southern African Labour & Development Resources Unit at the University of Cape Town also warned that the proposed “developmental state” in this country had a resources glut — but it wouldn’t go on for ever.

“We’ve had a window, and we can do stuff, but we are not making the best use of the money.”

A critical question came from the floor: Couldn’t markets themselves work better for the poor (for instance in banking services)? In other words, much as the state’s role could be improved, the trick is also getting growth at the base of the social pyramid.