The Nordic Africa Institute – Publications

The transition from apartheid to democracy in South Africa is widely regarded as an exemplary case of an elite political settlement. Moreover, South Africa’s political history in the last two decades can certainly be understood in terms of the way old, new, political and economic elites interacted in different domains and sectors to resolve major collective problems and produce institutional solutions that would work – even if some of these solutions appeared contentious – and cater to broad interests.

The political settlement achieved by opposing elites produced a unique democratic pact. However, less attention has been paid to the economic pact achieved by these elites. As a liberation movement, the African National Congress (ANC) advocated nationalisation to undo the socioeconomic legacies of apartheid, but once the political transition had commenced, it discarded nationalisation. Instead, ANC elites opted for pro-business/market policies, which stabilised the economy and attracted much needed foreign direct investment. Their decision was partly attributable to the negotiated political and economic pacts that they concluded with National Party elites and ‘white’ capital. With the political or democratic pact in place, the negotiation and consolidation of the economic pact was achieved with the formation of numerous formal and informal coalitions with first ‘white’ and later ‘black’ capital to undo the economic legacies of apartheid. Not only did the pact result led to a stable political transition, it also in political and economic transformation.

More importantly, early signs are now evident of a developmental pact that may result in a successful developmental state capable of achieving equality and equity for all in post-apartheid South Africa.