Can South Africa avoid macroeconomic populism?

Abstract

Many South Africans fear that a future democratic government will choose (or be forced) to apply a variety of irresponsible macroeconomic policies in an attempt to deliver short‐term benefits to the hitherto politically disenfranchised and economically disempowered. The post‐war experiences of a number of Latin American countries indicate that such macroeconomic populism has disastrous economic and social consequences, especially for those groups which are supposed to gain. In the Mont Fleur Scenarios, macroeconomic populism is termed the Icarus scenario (Mohr, 1992). This article examines the likelihood of such a ‘fly now, crash later’ scenario of macroeconomic mismanagement evolving in South Africa in the foreseeable future. It discusses various definitions of populism and macroeconomic populism; the salient features of the populist cycle as manifested in a number of Latin American countries; the sources of macroeconomic populism in Latin America and the reasons that certain governments took the populist route in spite of previous outcomes in their own or in other comparable countries; the reasons for the absence of populism in Colombia; and the general lack of populism in the region in the 1990s. Finally it seeks to arrive at a list of questions or criteria which can be applied to South Africa.

Notes

University of South Africa.

Paper presented at the biennial conference of the Economic Society of South Africa, Pretoria, October 1993. The author thanks Chris Torr, Yvonne Kemp, Tony Seeber, Piet‐Hein van Eeghen and Louis Fourie for useful comments and suggestions. The usual disclaimer applies.