The Evolution of Health and Welfare Policies in South Africa: Inherited Institutions, Fiscal Restraint, and the Deracialization of Social Policy in the Post-Apartheid Era

Abstract

Institutions which have died as creeds sometimes continue, nevertheless, to survive as habits. --Richard H. Tawney, 1931 (1) The central question in this essay is: Why is social policy reform program of post-apartheid African National Congress (ANC) government failing to achieve its egalitarian objectives? Many commentators locate answer in embrace of economic and social policies by ANC ruling party and abandonment of its historical commitments to redistribution of wealth of as contained in documents such as 1955 Freedom Charter, which called for sharing of the national wealth of country among all South Africans. (2) By neoliberalism, I refer to those economic strategies and political objectives that privilege market over state, and call for (1) diminishing of economic influence of state through privatization of state assets, (2) state becoming a non-intervening regulator of economic relations between capital and labor, (3) reduction in social support for poor and unemployed received through social security and other non-market mechanisms in favor of labor market based strategies such as works programs, and (4) erosion of concept of public good through an increased emphasis in social and economic policy on individual responsibility for social goods, such as health and education. The Growth, Employment and Re-distribution Strategy (GEAR), introduced by government led by ANC in 1996, had two main objectives. The first was to maintain internal fiscal restraint to eliminate rapidly government deficit while, simultaneously, reprioritizing existing national budget to meet social needs. Second, it aimed to implement economic reforms, such as lifting exchange controls, restructuring state assets, and developing a flexible labor market to facilitate a globally competitive, export-led growth path that would enable economy to expand by 6 percent and create 400,000 jobs annually. (3) All these features of GEAR may reflect neoliberal underpinnings to ANC government's development approach. It is problematic to suggest, however, that there was a singularly correct strategy to transform inegalitarian nature of South African society, which ANC had abandoned. I argue that transforming South African society is a more complex exercise than anticipated. It is conditioned by historical, institutional, and related fiscal arrangements inherited from apartheid era, which have constrained, if not radically limited, ability to transform post-apartheid landscape. To explain limitations imposed by various inherited institutions in access to and use of health and welfare services in first post-apartheid government in South Africa, I use concept dualism. These inherited institutions limit realization of social equity, whatever particular strategy of transformation. A more interesting line of inquiry is to consider manner in which South African state, before and since end of apartheid, has responded to these institutional limitations. In this essay I will review these institutional arrangements and their historical roots as they pertain to reform of various aspects of health and welfare policies, and will attempt to demonstrate manner in which current social policy problems in South Africa are neither new to post-apartheid era nor mere consequences of this political change. The essay will also examine shifts in post-apartheid fiscal arrangements, which aimed to decentralize health service delivery in context of a new system of provincial governments, which was institutionalized after democratic elections in 1994. These changes have had unintended consequence of creating a fiscal and administrative re-fragmentation of post-apartheid nation-state in a manner similar in surprising respects to specific and intentional racial fragmentation found under apartheid. …