The Political Economy of Trade Reform in Emerging Markets

The Political Economy of Trade Reform in Emerging Markets

Crisis or Opportunity?

Edited by Peter Draper, Philip Alves and Razeen Sally

This timely book brings fresh analysis to the important issue of trade policy reform in emerging markets.

Chapter 8: South Africa

Philip Alves and Lawrence Edwards

Subjects: economics and finance, international economics, political economy, politics and public policy, political economy

Extract

Philip Alves and Lawrence Edwards INTRODUCTION South Africa’s trade policy reform is still very much a work-in-progress. The efficacy of reforms undertaken thus far is disputed, and the most likely direction reforms will take in future is increasingly difficult to predict. The changes in economic policy in the 1990s – towards stabilization and liberalization – depended on the confluence of three forces. First, an intellectual battle within the ANC itself, and among its alliance partners – the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) – had to be won.1 This in turn required key members of the ANC leadership and the first post-1994 cabinet to understand and promote arguments in favour of a liberal economic policy regime in South Africa. Second, the global policy thrust had to have been in favour, broadly, of more liberalization rather than less. This was guaranteed by widespread adherence to the principles embodied in the so-called Washington Consensus, which reached its zenith in the early to mid-1990s, just when South Africa embarked on its path to economic opening. As such, proreform arguments within South Africa would receive international support and backing. Third, events had to play a role. The peaceful transition from apartheid to democracy is the single most important event in modern South African history. Since every aspect of South African life was in such flux during this period, there was something of a blank canvas for incoming policy-makers to work with – the country was going to be rebuilt, law by...

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