The report, Growth Through Inclusion in South Africa was produced by the Harvard Growth Lab, led by Professor Ricardo Hausmann. It outlines the results of an intensive two-year deep diagnostic into the causes of South Africa’s prolonged underperformance.
The research identifies collapsing state capacity and spatial exclusion as factors behind the South African economy’s decline and the disconnection from the economy of far too many South Africans’ labour, talents, and capabilities.
By exploring the cases of electricity and municipal government performance, the researchers arrive at four interacting causes of collapsing state capacity: gridlock on key decisions, ideologies that limit the full use of society’s capabilities, overburdening of state organisations with goals beyond their core missions, and systems of political patronage.
Effective inclusion of the marginalised black majority will require direct responses to spatial exclusion through urban and housing policies that will allow for more inclusive cities as well as new strategies to bridge ‘knowhow’ between the productive economy and rural areas of former homelands, which remain largely excluded.
South Africa must leverage global decarbonisation by pursuing opportunities to produce and benefit from renewable energy and by supplying many of the minerals, goods, services, and innovations that the world will need to address global climate change.