Are poverty traps inevitable in a polarised society like South Africa? This Journal of Development Studies article investigates social capital and blockages to upward mobility using quantitative and qualitative data from the 1990s. Large numbers of South Africans are indeed trapped in poverty. Social relationships are most helpful for non-poor households. For the poor, social capital at best helps stabilise livelihoods at low levels and does little to promote upward mobility. Poverty alleviation therefore requires more proactive efforts to ensure that households have a minimum bundle of assets and access to the markets needed to increase them.
The post-apartheid period in South Africa saw further deepening of inequality and poverty. National economic policy in the first post-apartheid government adopted the liberal stance of the so-called Washington Consensus. The GEAR (Growth, Employment and Redistribution) programme displaced the emphasis that the ANC and its allies had initially given to direct government responsibility for meeting basic human needs. South Africa under GEAR focused on fiscal discipline and incentives for private investment, and waited for the poor to benefit from an expanding free market economy.
This confidence appears to have been misplaced. New asset-based approaches to poverty and poverty-dynamics, and further qualitative analysis of the post-apartheid period, show that large numbers of South Africans are trapped without a pathway out of poverty.
- Estimates identify a dynamic asset poverty threshold. Households that begin with an asset base expected to yield a livelihood less than two-times the poverty line are predicted to collapse towards a low-level poverty trap. Households that begin above that threshold are estimated to advance over time.
- The qualitative analysis found particular patterns underlying mobility dynamics, and broadly confirms the quantitative finding of a dynamic poverty threshold and a low-level poverty trap equilibrium.
- While social connections often attempt to help households look for work, get by in times of need, or cope with shocks, they are not connections that provide pathways out of poverty.
- Poverty causes conflicts over resources and other strains among family and among neighbours, further diminishing sources or potential sources of support.
- Social capital becomes more narrowly constructed and increasingly ineffective as a mechanism of capital access for poor people in a country facing a legacy of horizontal inequality and social exclusion.
South Africa has living standards that are on average significantly above those in countries where chronic poverty is assumed to be most severe. However, its peculiar polarised legacy of racially embedded inequality and poverty restricts the ability of South African poor to use social mechanisms of access to capital to engineer a pathway out of poverty. Implications include the following:
- The Government must now take affirmative steps to ensure that citizens are positioned to be able to respond to the new opportunities provided by the liberalised, post-apartheid economy.
- Governments must ensure that citizens have the minimum asset base and market access required to save, accumulate and succeed in a market economy.
