The Impact of Growth and Redistribution on Poverty and Inequality in South Africa

This country study evaluates the experience of the South African economy with respect to
growth, poverty and inequality trends since the advent of democracy in 1994. The postapartheid
government took a defi nite turn toward greater spending on social security,
while job creation and a narrowing of the gap between the so-called fi rst and second
economies – the latter defi ned as the informal part of the economy that is also largely
removed from formal sector activities – enjoyed priority in its economic strategy. Despite
this focus on uplifting the poor it remains unclear to what extent government has been
successful. Some controversy exists around whether relatively fewer South Africans are
poor ten years after the democratic government came into power. There seems to be
greater consensus among analysts that inequality has increased. This study attempts to
shed some light on these issues, drawing on recent South African literature and data.