South africa’s coalition government – making the case for hope

In the aftermath of South Africa’s recent election, renewed hope has made an unexpected appearance. In difficult times, even small gains can be valuable. But, on occasion, much more is

possible. Small gains can feed on each other; momentum can build; a virtuous spiral can take hold. This may be such a moment. It’s not ordinarily a good sign when a party that governs from

the (more-or-less) centre becomes mired in disillusion, and then loses more than a quarter of its support to a newly formed ethno-populist outsider. But over the past three decades South

Africa has repeatedly managed to avert disaster. Apartheid was defeated; predatory ethno-populism has been contained. Perhaps the country’s propensity to snatch victory from the jaws of

defeat may be surfacing yet again. For this to happen, restraint rather than boldness is likely to be key. I’ve spent the past three decades working to find ways to achieve development gains

in the midst of governance messiness – globally, as part of a team in the World Bank (my 2014 book Working with the Grain summarises lessons learned from that experience), and then at the

University of Cape Town’s Nelson Mandela School of Public Governance (where I was the founding academic director) and Johns Hopkins University’s School of Advanced International Studies.

These experiences give me optimism that, once the immediate political jockeying is done, South Africa has enormous potential for a very rapid economic turnaround. FRAGILITY AT THE CENTRE

ISN’T NEW On the surface, what happened in South Africa’s election is straightforward. About 15% of the electorate turned away from the ruling African National Congress (ANC), led by Cyril

Ramaphosa, and voted instead for a party begun only a few months ago by the disgraced (though, of course, not in the eyes of his supporters) former president, Jacob Zuma. Because the ANC

lost its majority, it now needs to govern by coalition. Since 1997, South Africa’s experience of this mode of governance has been limited to sub-national levels, and doesn’t inspire

confidence. To realise the potential of the moment, the country needs to move beyond a political culture where false certainties abound. At first glance, the new coalition is hardly a recipe

for political stability and policy coherence. The loyal leadership centre surrounding Ramaphosa will continually have to navigate between its left wing’s discomfort with the new

arrangements (the Communist Party and the Congress of South African Trade Unions remain part of the African National Congress alliance), and threats to exit from some of the coalition

partners. But fragility at the centre of government is hardly a new phenomenon. As a South Africa-focused chapter of a new book on political settlements underscored, even without formal

coalition government the coherence of South Africa’s political settlement has been on the decline since the late 2000s. More important, this lack of coherence need not prevent a virtuous

spiral from taking hold. A VIRTUOUS SPIRAL Debates about how to get an economy moving generally focus on policy reforms. However, as economists John Maynard Keynes and Albert Hirschman

taught, in the short term the most potent drivers are not so much policy as people’s ideas of what the future holds. In a 2021 piece written for UNU-WIDER I spelled out how optimistic ideas

can reinforce each other to fuel a virtuous spiral – and, correspondingly, how pessimistic ideas can set in motion a vicious, downward spiral. The piece explored the interactions among four

drivers: DRIVER #1: whether political and economic elites view themselves as engaging in zero-sum contestation over how to share a fixed pie – or whether they are prepared to co-operate to

create new value, and share the benefits. DRIVER #2: whether the country’s citizens see the political, policy and institutional environment – the power and rules that govern their lives – as

legitimate. DRIVER #3: whether private investors are optimistic or pessimistic about the future. And (as influenced by each of the above): * the strength of political leadership’s

decision-making authority. South Africa’s experience demonstrates powerfully how these drivers can be mutually reinforcing – for good or bad. The first 15 years of democracy showed how a

virtuous spiral could build momentum. Co-operation among elites, hope among the populace at large and effective leadership led to an uptick in private investment and an acceleration of

growth. In time, though, the “miracle” faded. Many lost hope in the promise of a better future. In the 2010s, things went into reverse – fractious politics, civic disillusion, cynical

leadership and economic stagnation became the order of the day. A vicious downward spiral seemed to be taking hold. Now, after the electoral surprises, a new dawn of hope may be possible.

HOPE IS A FRAGILE FLOWER Less is more – for now. Hope is a fragile flower. Here, drawing on lessons I have learned over the past three decades, are three pointers that might help it to

thrive. First, the real world is forgiving of “good enough” policies that fall short of perfection. And despite the continual drumbeat of criticism, South Africa’s economic policy regime is

“good enough” to support growth. Macro-management has consistently been solid. And Operation Vulindlela – an initiative aimed at modernising and transforming electricity, water, transport

and digital communications – has been one of the unheralded successes of Ramaphosa’s first term. It has been unblocking a variety of structural constraints to renewed growth (in part by

making major inroads into the electricity crisis.) The ANC’s decision to govern in partnership with the centre-right, and to keep its distance from the more predatory and ethno-populist

segments of South Africa’s political landscape, is a new and unambiguous signal of its commitment to fostering rapid growth. Second, while South Africa’s new coalition government could

hardly be more disparate ideologically, its participants are united by a shared commitment to a thriving future for South Africa, and a shared sense that this will require a capable state.

Nevertheless, the zone of agreement between the coalition members is small. Outside that zone, the potential for bitter disagreement is huge. Push too hard and things could easily fall

apart. So, for the next two years or so, the urgent task is to focus on shared goals, and to avoid the kinds of policy and power conflicts that can turn hope into rancour, recrimination and

enmity. What are these shared goals? Getting growth going. Strengthening the foundations of public institutions. Improving public sector performance. Focus on these – and do so in the spirit

of “good enough”. But third, as South Africa has learned, a new beginning doesn’t last forever. For a few years, the 70% or so of South Africa’s population that live in – or near the edge

of – poverty may join in the optimism that can come from an economy that is on the move, and a public sector that is performing better. But at some point South Africa’s harsh structural

reality – the realisation that it will take more than a rising tide to lift all – will again re-assert itself. And it will be time to take on the more difficult questions of how to

simultaneously sustain economic dynamism, do more to reduce extreme poverty, and create new opportunities for upward mobility. But not yet. Not for the next year or two. Now is the time to

build momentum – to give a new season of hope a chance to take hold.