State capacity the missing link in country’s policy environment

SOUTH Africa’s fascination with grand ideas knows no bounds.

From as far back as the advent of democracy, arguments in favour of either a socialist model of development, characterised by nationalisation, or a mixed approach have been debated.

In 1996, when the ANC adopted the growth, employment and redistribution policy, known as Gear, it committed itself to a mixed economy of the state having a responsibility to provide the social net while creating a viable environment for the private sector to operate in a way that ensures shared growth.

One imagines that this decision has now been set aside.

Recently, arguments in favour of nationalisation have re-emerged.

There is nothing wrong with raising this debate, but everything wrong with avoiding a proper diagnosis to uncover the shortfalls of our economic policy thus far.

Can one argue that the poor performance of our economy and the failure to transform it are due to banks and mines being privately owned, instead of nationalised?

My answer is an emphatic no.

The missing link in South Africa’s policy environment is state capacity.

Even if we were to nationalise the mines and banks, state capacity would remain a stark reality and could become worse, given that the state has shown itself to be incapable of managing almost anything efficiently.

Its competence has declined sharply in recent years.

Those who call for the nationalisation of mines and banks seem to follow the untenable reasoning that since most sectors under government control are not functioning properly, it is only “fair” that we bring the banks and mines into the fold, to ensure that all are equal.

This is downward equality, where you adjust everything to the lowest common denominator instead of working towards improving things towards a higher standard.

Then there is a question about commitment to the values of nationalisation and whether those who have chosen to favour it are fighting narrow battles for political expediency.

Policy makers have a right to raise grand ideas when they feel the current policy framework is inadequate.

However, they shouldn’t think they can propose radical policy shifts without having to explain their role in the inadequacies of previous policy.

Those within the ANC calling for radical change in the form of nationalisation should first own up to their role in poor past performance.

ANC members should not be allowed to walk in and out of policy positions without having to explain themselves.

Having a mandate to devise and implement policy is not a licence to make arbitrary and whimsical decisions.

South Africa’s problems are not complex or abstract; they are fairly straightforward and practical in nature.

Consider for example the SA Social Security Agency (Sassa) debacle that unfolded this year.

The issue had nothing to do with grand ideas such as privatisation or nationalisation.

It was a matter of government officials, including political principals, having to avoid conflicts of interest when dealing with the provision of public services.

Whether or not one is in favour of nationalisation, good governance is always about following procedure openly.

At some point South Africa might have to raise the debate regarding nationalisation.

Doing it now presents a false route that will not lead to the improvement of service delivery.

The central issue, which requires rapid response, is the decline of state capacity and the dwindling legitimacy of the democratically elected government to implement policy.

The main cause of this problem is corruption. Until we have fully dealt with this, it seems to me that the whole debate about nationalisation remains a senseless jujitsu battle.

There is nothing wrong with raising this debate, but everything wrong with avoiding a proper diagnosis to uncover the shortfalls of our economic policy