Global Poverty Research Group

Governing redistribution: economic empowerment, informalisation and property regimes

Overview

This project explores the relationship between deliberative government intervention to reduce structural inequalities in the southern African region, and growth and employment responses. This research begins with the premise that widespread social wellbeing requires that economic accumulation regimes be inclusive, stable and enabled to provide occupations for the population. In a region characterised by historical injustice in the distribution of economic resources, low current levels of FDI, an HIV pandemic, and job retrenchment in its historically important mining and plantation sectors, ‘good’ economic governance is critical to promoting inclusive economic change. The current econometric literature on the relationship between income inequality and growth is inconclusive at a generic level, and indicates both regional and country specific variance in results. This research contributes to the debate by reviewing the experience of particular government policies in the area of black empowerment legislation on changes in employment rates and income (re)distribution. This develops the conclusion from earlier work in the CPRC that state-sponsored redistribution policy has an important role to play in changing underlying property rights regimes for the benefit of the poor. Further empirical work is planned to test whether the potential for poverty reduction derivative of these policies has been hindered by a racially-based exclusion of black empowerment companies from bank resources, and/or whether the corruption evident in policy implementation is undermining competitiveness and potential wealth redistribution. This research is important in terms of contributing to the debate on economic justice in southern Africa.

Reseachers to contact for this project

Sarah Bracking