PB 15/43 - Labour and Unemployment in South Africa: Notes Towards a "Grand Bargain"

Ravi Kanbur​

Date of Publication: 
August 2015​

Abstract:  The problematic is very clear: high unemployment, high inequality and low growth, combined with a lack of consensus on what to do. The last point is important. There is no shortage of specific actual policies and interventions, as well as specific further proposals for policies and interventions, and there is no shortage of detailed debate and discussion around each of them.
But perhaps we should first investigate why there is such a lack of consensus. Is the matter purely a technical one to do with disagreements on design of policies and interventions, or is it more holistic than that, related to broader vision? Is it to do with which political constraints are taken as binding, and which are not? Relatedly, is it to do with a fundamental disconnect between the fact that the key interventions will only work through over a 7-10-15 year time horizon, while the political need is to deliver high growth, low unemployment and low inequality over a 3-5-7 year time horizon?
My basic argument is going to be that although we can - and we will - have detailed discussions about the pros and cons of specific proposals, it might be more fruitful to think in “grand bargain” terms, of a package of policies whose thrust is to balance alternative perspectives, whose differences cannot be resolved through technical debate, and to set the needs of short term political economy imperatives against the long time horizon needed for the working of policies and interventions to address deep structural legacies.

View Policy Brief: DPRU PB 15/43