2. Bureaucratic Fragmentation, Cash-Transfers, and Financial Markets: Policymaking in the Post-apartheid Neoliberal Landscape

This chapter further unpacks some of the economic and political incentives, as well as constraints, that have served to lock-in certain neoliberal orthodox policies over a twenty-five-year period in post-apartheid South Africa. Specifically, the chapter focuses on the country’s integration into the global financial markets and the consequences of this policy. It is argued that portfolio capital inflows have provided an excess of liquidity that has in turn enabled the governing party to finance its fiscal deficits, and hence social programmes, despite stagnant economic growth and low tax revenues. Moreover, financial liberalization has empowered global asset investors and provided them with a potential veto over more heterodox economic policies—such as capital controls and an expansive monetary programme. Thus, in the context of a fragmented bureaucratic landscape, the dominance of mobile investors in the post-apartheid period has empowered the Treasury over other bureaucratic centres in the realm of economic policymaking.