Tag Archives: inequality

From crisis to renewal? Affordable housing and homelessness in Los Angeles

April 16, 2025 By in affordable housing, homelessness, Los Angeles, participation, public sector governance Tags: , , , , , , , , , , , , , 4 Comments

In dark times, I take inspiration from the great social scientist Albert Hirschman’s commitment to  the search for ‘a bias for hope’, for  “avenues of escape from exaggerated notions of absolute obstacles…. avenues in  which the inventiveness of history  and a ‘passion for the possible’ are admitted as vital actors”. Viewed from this perspective, the point of departure for effective action is not some idealized vision of how things should be, but  clarity  as to how things actually are – with this clarity providing the basis for a search for practical entry points capable of setting far-reaching cumulative change in motion.  This passion for the possible has inspired my research and practice for almost a half century; it is the guiding spirit of a new  cycle of research on the Los Angeles’ region’s twin crises of homelessness and scarcity of affordable housing (AHHLA)  that I introduce in this piece.

Los Angeles’ AHHLA crisis startles. LA County is among the world’s affluent locales, with a  2023 per capita income of over $78,000, well above the American average. Yet that same year about 55,000 people were living on LA’s streets, and over 30,000 of them had been there for more than one year.  Even more startling, every year about 60,000 people become newly homeless –  a cumulative total over five years of almost 3 percent of LA County’s population of 10 million.  For those who live in Los Angeles (among whom, having moved here in 2023, I now count myself) the AHHLA crisis is existential. But its significance goes beyond the local.

As recent books by Ezra Klein and Derek Thompson (2025) and Marc Dunkelman (2025) explore in depth, a broad national reckoning is underway to assess both how failures of progressive governance contributed to the rise of toxic populism, and what might be the contours of a renewed and effective progressivism.  AHHLA is ground zero of this broader crisis of contemporary American progressivism. In what ways did decades of progressive good intentions gone wrong fuel LA’s current crisis? Are there hopeful lessons to be learned from recent efforts to address AHHLA about how progressive approaches to governance can become part of the solution?

Here, to set the stage for addressing the above questions,  is AHHLA’s economic backdrop:

  • Over the past four decades, even as the affluent have thrived,  earnings have been stagnant for the poorer half of LA’s population. As of the early 2020s, 16.6 percent of LA residents lived below baseline (rent-adjusted) measures of absolute poverty – the highest percentage among California’s regions. (California is the state with the highest percentage in the USA.) In the absence of the public safety net, the LA percentage would be 26%.
  • Beginning in the 1990s, a combination of population growth, the end of the extensive margin and slow growth environmentalism/NIMBYism has resulted in an increasingly severe shortage of housing. Between 1960 and 1990, about  200,000 housing units were built each decade; between 1990 and 2020,  the decadal average was below 75,000 units. In 2023, 45 percent of the households that earn below LA County’s median income paid more than half their income in rent.
  • The unit costs of building publicly-subsidized affordable housing in Los Angeles are almost two and a half times the equivalent costs in Colorado and Texas; startlingly, within LA the total development costs per square foot are 50 percent higher for publicly-subsidized  than for unsubsidized, market rate housing built for private (self-pay) buyers.

Considered together, the combination of stagnant incomes, rising unit costs and a near cessation of new housing construction (except at the more affluent end of the market) was to make accommodation increasingly unaffordable for lower-income Angelenos. In important part, and as per the title of an influential book, Homelessness is a Housing Problem. More on all of this in coming weeks and months.

LA’s fragmented  governance arrangements have enabled the AHHLA crisis to fester. This fragmentation  is especially ill-suited to addressing homelessness – a multi-faceted ‘wicked’ problem  that calls for a multi-sectoral, multi-jurisdictional and multistakeholder  response. The roots of LA’s fragmented governance can be traced back (at least in part; racial ‘redlining’ also played a role….) to a century-long aspiration to avoid centralized, urban machine politics and cultivate instead more localized, small-town-like governance.  Some tasks are the responsibility of LA County government, and others are diffused among the County’s 88 municipalities, of which the City of LA (with a population of four million) is the largest. This fragmentation has been exacerbated by deepening commitment over the past half-century to open, often legally-mandated public deliberative processes in advance of any action, which further complicates local government’s decision-making.  

Moving towards more top-down governance (of varying degrees of draconianism) offers one possible response to fragmentation.  But widening the distance between citizens and local government risks worsening what already is a crisis of civic alienation from government in many countries (not least of which the USA) the world over. Might there be a third way, one that finesses the traps of top-down governance accompanied by citizen alienation, or civic participation plus ineffectual governance? 

In recent conceptual work (see here for an introductory overview), I have explored the potential and limits of this third way. The articles delineate three distinct channels through which ‘socially-embedded’ approaches to public governance might simultaneously  counter fragmentation, encourage participation  and enhance effectiveness:

  • A collective effort to enhance clarity as to goals;
  • Streamlined, transparent  and participatory approaches to performance monitoring; and
  • Collaborative, multistakeholder arrangements for service provision.

Recent initiatives in LA to reduce homelessness incorporate all three channels. Why these initiatives were adopted,, and whether they will continue to unfold in ways that contribute to reducing homelessness is the focus of an ongoing research project in collaboration with  the University of Southern California’s Professor Yan Tang (an eminent scholar in the tradition of Elinor Ostrom’s work on collective action). As our research will explore, one key to success is whether the protagonists in the LA efforts will be able to craft a credible way of sharing gains and burdens within a framework that can advance the collective interest. What follows will hopefully whet the reader’s appetite for the research project.  

Strikingly, at least since the early 2010s,  momentum for scaling-up and reshaping how LA responds to its homelessness crisis has come less from government than from civil society. The efforts have unfolded in two phases. In a first phase, political and civic leaders championed a series of ballot measures that successfully raised billions of dollars to address AHHLA. However, by the late 2010s, there was a dawning realization that the magnitude of the challenge went way beyond earlier perceptions. Not only was further financing required, effectively addressing the twin crises called for better  co-operation among multiple stakeholders – something that the region’s fragmented institutions were not well placed to achieve.  A 2021 report commissioned by civil society champions took stock of the governance challenges, and proposed a menu of reforms. Partly in response to this report, Los Angeles County’s Board of Supervisors  established a Blue Ribbon Commission on Homelessness Governance  and subsequently adopted its recommendations.

Since mid-2024, there has been an extraordinary burst of energy and  reform aimed at aligning LA’s multiple stakeholders  around a coherent governance platform for reducing homelessness. Major initiatives include:

  • The creation by LA County’s Board of Supervisors of a robust, formally-empowered multistakeholder platform, with a mandate to “help align the region’s approach to homelessness and provide critical accountability and oversight to ensure more meaningful results”.  
  • The  development and official adoption of specific, measurable targets for reducing  homelessness.  
  • The initiation of work by  the Los Angeles County Affordable Housing Solutions Agency (LACAHSA), established in a 2022 resolution of the California State Senate to increase the availability and affordability of housing in LA.
  • A radical restructuring (currently at an early stage, but on an accelerated timetable)  of the lead public  LA County and City agencies responsible for overseeing and implementing the LA region’s response.
  • A new effort to specify performance standards for each of the many elements that go into the homelessness response – as a necessary basis for both resource allocation and accountability.

The hope is that the above initiatives will together finally provide the coherence and momentum needed to make real inroads into  homelessness – and thereby  break a longstanding corrosive cycle of overpromising and then underdelivering.  Whether this will happen remains uncertain,  but if it does  LA could go from being seen as a notorious example of the failure of well-intentioned progressivism to effectively address urgent social challenges, to  becoming an exemplar of a renewed, legitimate and effective 21st century progressivism. What happens next thus matters well beyond LA itself.  Watch this space for further updates. 

Between South Africa’s frying pan and America’s fire

April 28, 2022 By in Uncategorized Tags: , , , , Leave a comment

Fueled by hope, I spent the 2010s travelling back-and-forth between South Africa and the USA, sharing  an optimistic approach to integrating governance and development strategies with mid-career practitioners at both SAIS and the Mandela School. But the subsequent decade unfolded in unexpectedly toxic ways in both countries. It felt important to complement with-the-grain pragmatism with an exploration of underlying challenges. A 2021 co-authored paper explored why things turned rancid in South Africa.  My new paper –  How Inequality and Polarization Interact: America’s Challenges Through a South African Lens, also published by the Carnegie Endowment for International Peace – takes a comparative perspective.  This post lays out five personal take-aways from the comparison. (Here’s a link to the paper’s executive summary).

Take-away #1:  Far more than is the case for contemporary South Africa,  America’s current wounds – increases in inequality since the 1980s, and their attendant social and political correlates –   have been self-inflicted.

Back in the 1970s, I had been  drawn to the USA by its openness, its commitment to freedom, equal dignity and equal justice for all – everything that the South Africa I left behind was not.  With its 1990s ‘rainbow miracle’ transformation from apartheid to constitutional democracy, South Africa became a new  beacon of possibility for people around the world who value democratic governance and inclusive societies. However,  the country’s subsequent reversals were not wholly unexpected. Three decades after the end of apartheid,  South Africa remains among the world’s most unequal countries, and its fraught racial history continues to fester – though the rawness and relative recency of the anti-apartheid struggle perhaps continues to offer some immunization against a further-accelerating downward spiral.   

For the United States, however, the converse may be true. In the decades subsequent to World War II, the combination of an equitably growing economy and a vibrant civil rights movement had fostered the hope of deepening economic and social inclusion. But  beginning in the 1980s, the benefits of growth became increasingly skewed, and  ‘culture wars’ became increasingly virulent. Complacency bred of long stability may have lulled America  into  political recklessness at the inequality-ethnicity intersection – a recklessness that risks plunging the country into disaster.

Take-away #2:  In both South Africa and the USA, the drivers of polarization have been multiple and mutually reinforcing; essentialist explanations that focus narrowly only on a single dimension –  economic, institutional,  cultural or racial  – and ignore the others are, at best, seriously incomplete.

The Carnegie paper distinguishes between polarization’s demand-side and its supply-side.  The demand-side comprises the way citizens engage politically – as shaped by power, by their perceptions of the fairness of economic outcomes, and by whether they frame identity  in inclusive or in us/them ways.  The supply-side comprises political entrepreneurs and the ideas they champion –  ideas about how the world works; ideas about identity. Mutually-reinforcing interactions between the demand- and supply-sides can become increasingly toxic – potentially even to the point of a doom loop that destroys constitutional democracy.

Take-away #3: Both South Africa and the USA need to be more pro-active in renewing economic inclusion  – but  making the shift from an inequality-fueling to an inclusion-supporting economy is less daunting than it might seem.

When considered through the lens of the interaction between inequality and ideas, pro-inclusion policies are less important as ends in themselves than for how they affect the willingness  of citizens to accept the rules of the game (including the distribution of economic outcomes) as broadly legitimate.  As South Africa’s rainbow miracle turnaround in the 1990s and early 2000s shows, a turn from anger to hope does not need a comprehensive package of pro-equity reforms. Rather, reforms that foster “good-enough inclusion”—some immediate gains that signal that things have changed, combined with credible signals that longer-term structural change is underway—can set in motion a virtuous spiral, which can be sustained as long as the momentum of  positive policy change continues to unfold over time.

Take-away #4: The influence of economic elites, though often obscured beneath the headlines,  has been central in both countries – for both good and ill. 

In South Africa, as Alan Hirsch and I explored in depth,  South Africa’s business establishment played a leading role in helping to midwife negotiations between the white minority government and the ANC.  In the USA, organized business was an important part of the elite consensus that fueled three decades of inclusive economic growth subsequent to World War II. In recent decades however, a segment of the elite  has actively financed  political entrepreneurs who have skillfully championed a combination of polarizing cultural discourse and distributionally regressive economic policies. This is a classic example of elite capture, a phenomenon familiar to scholars of comparative politics.  Paralleling what happened in 1980s South Africa, might America’s economic elites wake up to these risks and become more open to inclusive renewal?

Take-away #5: In settings that are open politically, turnaround will be achieved less by directly engaging  polarization’s most toxic champions, than by working around them.

Mass political mobilization was pivotal to South Africa’s shaking loose the shackles of apartheid – and new calls to the barricades might seem to be the obvious response to current political and governmental dysfunction.   However,  different times and different challenges call for different responses.  Currently, both the South African and U.S. governments are, at least aspirationally, committed not to accelerating polarization but to strengthening both inclusion and the institutional foundations of democracy. In such contexts, some compelling research suggests that what is called for is not fighting polarization with more polarization but lowering the temperature by fostering deliberative discourse, focused on positive, hope-evoking options. As happened once before in the USA,  the aim would be for a myriad of collaborative, problem-focused grassroots initiatives  to serve as potential building blocks for  a twenty-first-century social movement– a  movement that views cooperation in pursuit of win-win possibilities not as weakness but as key to the sustainability of thriving, open, and inclusive societies.

Between South Africa’s frying pan and America’s fire

April 27, 2022 By in governance, Uncategorized Tags: , , , , 1 Comment

Fueled by hope, I spent the 2010s travelling back-and-forth between South Africa and the USA, sharing  an optimistic approach to integrating governance and development strategies with mid-career practitioners at both SAIS and the Mandela School. But the subsequent decade unfolded in unexpectedly toxic ways in both countries. It felt important to complement with-the-grain pragmatism with an exploration of underlying challenges. A 2021 co-authored paper explored why things turned rancid in South Africa.  My new paper –  How Inequality and Polarization Interact: America’s Challenges Through a South African Lens, also published by the Carnegie Endowment for International Peace – takes a comparative perspective.  This post lays out five personal take-aways from the comparison. (Here’s a link to the paper’s executive summary).

Take-away #1:  Far more than is the case for contemporary South Africa,  America’s current wounds – increases in inequality since the 1980s, and their attendant social and political correlates –   have been self-inflicted.

Back in the 1970s, I had been  drawn to the USA by its openness, its commitment to freedom, equal dignity and equal justice for all – everything that the South Africa I left behind was not.  With its 1990s ‘rainbow miracle’ transformation from apartheid to constitutional democracy, South Africa became a new  beacon of possibility for people around the world who value democratic governance and inclusive societies. However,  the country’s subsequent reversals were not wholly unexpected. Three decades after the end of apartheid,  South Africa remains among the world’s most unequal countries, and its fraught racial history continues to fester – though the rawness and relative recency of the anti-apartheid struggle perhaps continues to offer some immunization against a further-accelerating downward spiral.   

For the United States, however, the converse may be true. In the decades subsequent to World War II, the combination of an equitably growing economy and a vibrant civil rights movement had fostered the hope of deepening economic and social inclusion. But  beginning in the 1980s, the benefits of growth became increasingly skewed, and  ‘culture wars’ became increasingly virulent. Complacency bred of long stability may have lulled America  into  political recklessness at the inequality-ethnicity intersection – a recklessness that risks plunging the country into disaster.

Take-away #2:  In both South Africa and the USA, the drivers of polarization have been multiple and mutually reinforcing; essentialist explanations that focus narrowly only on a single dimension –  economic, institutional,  cultural or racial  – and ignore the others are, at best, seriously incomplete.

The Carnegie paper distinguishes between polarization’s demand-side and its supply-side.  The demand-side comprises the way citizens engage politically – as shaped by power, by their perceptions of the fairness of economic outcomes, and by whether they frame identity  in inclusive or in us/them ways.  The supply-side comprises political entrepreneurs and the ideas they champion –  ideas about how the world works; ideas about identity. Mutually-reinforcing interactions between the demand- and supply-sides can become increasingly toxic – potentially even to the point of a doom loop that destroys constitutional democracy.

Take-away #3: Both South Africa and the USA need to be more pro-active in renewing economic inclusion  – but  making the shift from an inequality-fueling to an inclusion-supporting economy is less daunting than it might seem.

When considered through the lens of the interaction between inequality and ideas, pro-inclusion policies are less important as ends in themselves than for how they affect the willingness  of citizens to accept the rules of the game (including the distribution of economic outcomes) as broadly legitimate.  As South Africa’s rainbow miracle turnaround in the 1990s and early 2000s shows, a turn from anger to hope does not need a comprehensive package of pro-equity reforms. Rather, reforms that foster “good-enough inclusion”—some immediate gains that signal that things have changed, combined with credible signals that longer-term structural change is underway—can set in motion a virtuous spiral, which can be sustained as long as the momentum of  positive policy change continues to unfold over time.

Take-away #4: The influence of economic elites, though often obscured beneath the headlines,  has been central in both countries – for both good and ill. 

In South Africa, as Alan Hirsch and I explored in depth,  South Africa’s business establishment played a leading role in helping to midwife negotiations between the white minority government and the ANC.  In the USA, organized business was an important part of the elite consensus that fueled three decades of inclusive economic growth subsequent to World War II. In recent decades however, a segment of the elite  has actively financed  political entrepreneurs who have skillfully championed a combination of polarizing cultural discourse and distributionally regressive economic policies. This is a classic example of elite capture, a phenomenon familiar to scholars of comparative politics.  Paralleling what happened in 1980s South Africa, might America’s economic elites wake up to these risks and become more open to inclusive renewal?

Take-away #5: In settings that are open politically, turnaround will be achieved less by directly engaging  polarization’s most toxic champions, than by working around them.

Mass political mobilization was pivotal to South Africa’s shaking loose the shackles of apartheid – and new calls to the barricades might seem to be the obvious response to current political and governmental dysfunction.   However,  different times and different challenges call for different responses.  Currently, both the South African and U.S. governments are, at least aspirationally, committed not to accelerating polarization but to strengthening both inclusion and the institutional foundations of democracy. In such contexts, some compelling research suggests that what is called for is not fighting polarization with more polarization but lowering the temperature by fostering deliberative discourse, focused on positive, hope-evoking options. As happened once before in the USA,  the aim would be for a myriad of collaborative, problem-focused grassroots initiatives  to serve as potential building blocks for  a twenty-first-century social movement– a  movement that views cooperation in pursuit of win-win possibilities not as weakness but as key to the sustainability of thriving, open, and inclusive societies.

South Africa’s changing tolerance for inequality

April 3, 2021 By in Uncategorized Tags: , , , , Leave a comment

South Africa, along with many other countries, is struggling to renew hope in the wake of a difficult downward spiral. This struggle  is the focus of our new, co-authored  paper, to be launched on April 7th at a virtual event featuring Trudi Makhaya (economic adviser to President Ramaphosa) and Harvard’s Dani Rodrik. (Here’s a link to the event.)  

South Africa’s recent experience illustrates powerfully the fragility of hope. In the 1990s, the country was an iconic case of democratization. The subsequent collision between strong institutions and massive inequality makes its experience potentially of relevance not only for other middle-income countries, but also for many higher-income countries wrestling with a combination of a declining tolerance for high or rising inequality and institutions that seemed strong in the past but find their legitimacy increasingly being questioned.  

In a benign scenario, ideas, institutions, and growth all reinforce a hopeful, virtuous spiral. Ideas offer hope, encouraging cooperation, the pursuit of opportunities for win-win gains.  Institutions provide credibility that the bargains underpinning cooperation will be monitored and enforced. Together, ideas and institutions provide credible commitment, fueling economic growth. However, the benign scenario does not reckon with the ways in which persistent high inequality, accompanied by unresolved tensions between the distribution of economic and political power can both put pressure on institutions and catalyze a lurch from hope to anger. The consequence can be a cascading set of pressures, and an accelerating downward spiral. Turnaround calls for going beyond ‘with the grain’ approaches, and embracing a far-reaching vision and strategy of renewal.

The new paper, “South Africa: When Strong Institutions and Massive Inequalities Collide”,  co-authored with Alan Hirsch, Vinothan Naidoo and Musa Nxele has been published by the Carnegie Endowment for International Peace, in collaboration with the University of Cape Town’s Nelson Mandela School of Public Governance. It will be launched on April 7th at 10am (US East Coast time), at an open virtual event to be co-hosted by the CEIP’s Tom Carothers and Zainab Usman, and Faizel Ismail of the Mandela School, with Trudi Makhaya and Dani Rodrik as discussants.  A  modified version of the paper’s executive summary follows below

***

For South Africa’s first fifteen years of democracy, the combination of a shared willingness among stakeholders to believe in the power of cooperation and effective institutions that helped make promises of co-operation seem credible enabled the country to move beyond counterproductive conflict and pursue win-win outcomes. Growth began to accelerate, providing the fiscal means for addressing absolute poverty (as per Table 1), and offering some new opportunities for expanding the middle class. There were, however, some stark limitations in what was achieved. The poorest four deciles remain largely unemployed or underemployed, and mostly live in rural areas (designated during the apartheid era as “reserves” or “homelands”) and informal settlements around towns or cities.

Table 1. Some gains in reducing poverty, 1996-2011

19962011
Absolute poverty, with daily hunger28%11%
Access to:
 – electricity
58%
85%
 – piped water56%91%
Immunization coverage68%98%
Secondary school enrollment50%75%
Access to social grants (old age, child support, disability)2.4 million15 million

South Africa’s political settlement was built around four distinct sub-bargains:

  • A deal between the established (overwhelmingly white) economic elite and the country’s new political leadership. This included commitments to sustain the rule of law (including protection of private property), and to gradual ongoing economic transformation (including an elaborate program to support black economic empowerment, BEE).
  • A deal among the new political elites within the majority political party, the African National Congress (ANC).  The ANC is a broad tent encompassing many ideological proclivities; degrees of public-spiritedness; and regional, ethnic, and economic interests. Its implicit promise was that its formal structures, plus the structures of government, would channel this diversity toward a shared national purpose.
  • A promise of upward mobility. One aspect was a commitment to protect the interests of new (predominantly black) middle class insiders. Another aspect was a promise that a combination of education, job creation, and an end to racial discrimination would open up readily accessible opportunities for those on the cusp of middle-class status.  
  • A promise to reduce extreme poverty. A post-minority-rule redirection of public resources and services would benefit the whole population.

All of these sub-bargains except for the last one, which was pursued at least into the 2010s, were built on shaky foundations. Many BEE transactions straddled the boundary between rules-based and more personalized deal-making; who should participate in BEE initiatives became part of the ANC’s inter-elite conflict. Adapting to a transformed political order created new pressures for the public sector. Had South Africa been able to enjoy a combination of visionary leadership and East Asian rates of rapid economic growth for a sustained period, the expansion of opportunity throughout society might have trumped the limitations of the aspirational commitments. In reality, the country only briefly reached an annual rate of 5 percent from 2005 to 2008.

In 2009 Jacob Zuma became president, having won a bitterly contested struggle for ANC leadership. He inherited an economy that, though buffeted by the 2007/2008 financial crisis, seemingly was fundamentally sound. Indeed, in the initial years of Zuma’s presidency—which included the wildly successful, celebratory atmosphere of South Africa’s June 2010 hosting of the soccer World Cup—it seemed likely that the country would continue its positive trajectory and might even begin a new phase of renewal. 

However, a hopeful scenario was overtaken by a combination of events, deep-seated ongoing challenges caused by South Africa’s continuing extreme inequality, and Jacob Zuma’s approach to leadership.  The events comprised a change in presidential leadership and South Africa’s undisciplined and uncoordinated response to the global financial crisis, which short-circuited a virtuous circle of an economy and society on the mend. Subsequent to the global crisis, South Africa  failed to build momentum and (contrary to other MICs) stagnated, signaling that the global shock is not sufficient to account for the subsequent reversal.

The deep-seated ongoing challenge was the country’s persistent inequality. As Table 2 details, as of the mid-2010s less than a quarter of the total population, including essentially all white South Africans, enjoyed a standard of living that was middle class or better. More than all other middle-income countries, South Africans are either affluent or poor, with limited opportunities to move up the economic ladder.  There was ample reason for the majority of South Africans to feel that, notwithstanding the promises of mutual benefit, the deck remained stacked against them. This increased the vulnerability of South Africa’s political settlement.

Table 2. South Africa’s 2014 Population Distribution, by Ethnicity and Class

 TotalAfricanOther blackWhite
Chronic poor49.5%46.9%2.5%0%
Transient poor121020.1
Vulnerable151320
Middle class209.546.5
Elite3.50.60.52.4
% population100%80%11%9%
Source: Schotte, Zizzamia and Leibbrandt (SALDRU, 2017)

Over the course of his nine years in office, Jacob Zuma governed in an increasingly personalized way, with increasing recourse to polarizing rhetoric. When Zuma took office, many who backed him hoped that he would bring an inclusive, coalition-building, popular touch to leadership—a contrast to Mbeki’s remote, technocratic, and somewhat imperious style. In the event, Zuma proved to be a cunning, ruthless, and charismatic tactician.

The paper describes in detail three successive turns that set in motion what looked to be  an accelerating downward spiral of decline:

  • Rising pressure on institutions, sparked by the continuing ambiguities and unresolved tensions in the bargains between economic and political elites, and among the various influential sub-groups within the ANC itself.
  • A rising tide of disillusion when per capita income growth entered and remained in negative territory. Zero-sum contestation over public positions and resources at the national, provincial and local levels became acute.  Those on the cusp of the formal economy found themselves unable to consolidate middle-class status;  unemployment steadily increased.
  • An ideational turn toward anger, catalyzed by both genuine grievance and political opportunism. In the face of thwarted opportunity, an increasing number of South Africa’s population came to see the privilege enjoyed by the mostly white economic elite—and the tide of apparent corruption that seemed to be the only way that new elites could share in that privilege—as a provocation. In turn, opportunistic ethno-populist political entrepreneurs sought to use the disillusion to strengthen their position within inter-elite political struggles.

All the elements seemed to be in place for a fourth turn – a  rapidly accelerating cumulative slide, with weakened economic performance, institutional decay, anger and ethno-populism feeding on one another. The December 2017 election of Cyril Ramaphosa as leader of the ANC and his subsequent accession to the country’s presidency signaled a pause to this slide. However, three years later, President Ramaphosa has not been able to move decisively beyond a promise to “stop the rot” and offer a renewed positive vision. Hard hit also by the Covid-19 pandemic, the country is not out of the woods.

What has been missing so far has been a vision capable of renewing hope across South African society. The path of least resistance for established elites would be to return to “the basics,” reembracing the trajectory of the Mandela and Mbeki presidencies. However, for reasons detailed in the paper, such a muddling-through scenario is unlikely to have the broad-based political support needed for it to be sustainable over the medium term.

The paper suggests  a credible promise of upward mobility for a wide spectrum of society as the centerpiece of a next-generation inclusive development strategy for South Africa.  In the first fifteen or so years of democracy, the elimination of racial barriers and the country’s accelerating growth were sufficient to usher in a season of hope. However, once the low-hanging fruit of the opportunity opened up by the end of apartheid’s racial privileges was gone, the limited economic prospects of those outside the elite became evident. A credible promise of upward mobility would offer a vision of hope and possibility for better lives across society as a whole, renewing perceptions as to the legitimacy of the social and economic order. (The paper details some aspects of a strategy along these lines.)

South Africa’s experience suggests four potentially useful propositions for the many countries struggling to maintain a positive social, political, and economic trajectory in the face of a declining tolerance for high or rising inequality.

  1. The trajectory of change is a knife-edge. There is the potential to set in motion virtuous circles of positive interactions among ideas, institutions, and economic growth. At the same time, there is a substantial risk that unaddressed distributional imbalances can set in motion a cumulative downward spiral of decline.
  • Ideas matter—a hopeful vision of change, when combined with a “good enough” responsiveness to distributional concerns, can be sufficient to launch a positive trajectory.
  • Both ideas and institutions can be shields against adversity—but only up to a point. Hopeful ideas can evoke positive agency and help mobilize for collective action. Institutions can function as shock absorbers. However, both need reinforcement, including ongoing attention to festering imbalances.
  • Initiating a new cycle of renewal requires a set of ideas and actions which address in a “good enough” way the imbalances which had resulted in derailment.

Leadership needs to risk of mobilizing new coalitions capable of overcoming the vested interests that stymie inclusive change. Can South Africa’s leadership—and can leadership in other countries, where a similar sense of disillusion has taken hold—summon the necessary boldness to rise to this challenge?

*****

For the authors’ presentation, and Trudi Makhaya and Dani Rodrik’s perspectives on the paper, join the co-sponsored Carnegie and Mandela School event, on April 7th or view the session (via this link) at some later time