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South Africa’s crisis: Calling things by their true name

 
20 April 2017
Brian Levy warns that the magnitude of what is at stake in the current crisis in South Africa is at risk of being underplayed 
 
The promiscuous use of the accusation of ‘corruption’ to cover all sins risks obscuring the nature of South Africa’s current crisis. As per ESID’s ‘political settlements’ approach, it is helpful to look beyond the details of venality, and identify some deeper patterns. But these alternative framings need to be handled with care. There is a risk that the result could be to inadvertently and wrongly take the edge off a sense of urgency.
At this moment of crisis, there are two misframings in particular that potentially have pernicious consequences. The first is an over-eagerness to describe any and all shortfalls vis-à-vis ‘good governance’ in binary terms – as ‘proof’ that a rule-bounded polity and economy has been entirely overtaken by patronage. The second is a conflation of the distinction between patronage and predatory kleptocracy. Both end up, inadvertently, downplaying the magnitude of what is at stake.
A binary framing of the tension between rule-boundedness and patronage along the above lines underplays the differences between the patterns of governance in low-, middle- and high-income settings – and the ways in which these differences are aligned with systematic differences in the ways in which polities and economies function.

Measured in purchasing power parity, South Africa’s current per capita income is four times that of Kenya, twice that of Nigeria, and  similar to that of middle-income Brazil and Thailand. (Also worth noting is that it is less than one-fourth that of Australia or the United States). These differences in income are mirrored in the most robust available estimates of variations in the quality of governance. South Africa’s 2015 scores on both government effectiveness and control over corruption are somewhat above both the global median. The country scores better than middle-income Brazil, Colombia, Mexico, Thailand and Turkey. South Africa’s scores are way higher than those of lower-income Kenya and Nigeria.
The point is not simply an empirical one. As Nobel-prize-winning economist Douglass North and his colleagues have explored in depth, underlying a continuum in the balance between personalised patronage and impersonal rule-of-law institutions is the reality that political, economic and institutional development co-evolve. Increasingly complex polities and economies are underpinned by increasingly complex (and increasingly impersonal) rules. (The authors also underscore that there is no teleology: polities, economies and institutions can go backwards as well as forwards.)
As a middle-income country, South Africa’s economy and polity continue to be anchored (albeit imperfectly) in impersonal rules. This (relative) rule-boundedness is underpinned by the size of its middle class, the complexity of its economic organisations, and (so far) the shared commitment across most of the diverse political spectrum to constitutional mechanisms for resolving conflict. The forces that can mobilise in support of rule-boundedness are thus far more powerful than they are in most low-income countries, in Africa or elsewhere. (But it is important to note that, as I have argued in joint work with Alan Hirsch and Ingrid Woolard, unless South Africa’s extremes of inequality are addressed, the stresses on the country’s institutions will continue to be  large.)
Bur recognising that there is a continuum between rule-boundedness and patronage also underscores that, on both the economic and political dimensions, South Africa potentially has a long way further to fall from its current messy institutional realities. And for a middle-income country such as South Africa, should the forces committed to rule-boundedness lose out entirely, the downside is much deeper than in lower-income countries.
This brings me to the second dangerous mis-framing – a conflation of the distinction between patronage and kleptocracy. As Harvard’s Merilee Grindle explored in her brave book, Jobs for the Boys,  patronage itself functions along a spectrum. Here is how she put it:
‘Patronage systems are not synonymous with bad governance …. Ministers and other high level officials have the capacity to use their appointment power to attract highly qualified staffs to carry out specific policy initiatives …. Managers with discretion over hiring have significant opportunities to create islands of excellence …. Discretion in hiring can provide means for escaping the rigidity of personnel laws and regulations.’ (p.261).
But:
‘Inherent in the flexibility that makes patronage systems available for a variety of goals is the problem of their instability and politicization …. with considerable potential for unwise use and the undermining of the public purposes of government …. The fatal weakness of patronage systems is that they are capricious, not that they are inevitably incompetent.’ (p.32)
At the limit of this capriciousness is predatory kleptocracy.
As I have argued elsewhere, ‘state capture’ goes beyond patronage – both in kind, and in consequence. It involves predation without restraint. As theorists of grand corruption sometimes like to put it, ‘a fish rots from the head down’. Once predatory kleptocracy takes hold, a downward economic and political spiral can unfold rapidly. That is why it is so urgent to call what is happening by its true name.
Rule-boundedness and patronage fall along a continuum, and most middle-income countries are located somewhere in the middle. They depend for their functioning  not on ‘good governance’, but on complex,  ‘good enough’  economic and political institutions. The tension between rule-boundedness and patronage is a game of inches, one which plays out incrementally over the medium term. But at the far end of the continuum lie predatory kleptocracy and institutional breakdown. If the forces currently struggling to protect South Africa’s imperfect, but functional institutions were to lose to predatory kleptocracy, then watch out below….
An earlier version of this piece appeared in The Conversation.