The Developmental State

  1. What is a developmental state?
  2. Social partners and the People’s Contract

  1. What is a developmental state?

A developmental state plays an active role in guiding economic development and using the resources of the country to meet the needs of the people. A developmental state tries to balance economic growth and social development. It uses state resources and state influence to attack poverty and expand economic opportunities.  

In all countries the state plays some role in shaping the structure and output of the economy. States in different countries use a variety of instruments and policies like the regulation of industry and trade, the redistribution of incomes and assets, the use of fiscal and monetary policies and direct state ownership of key industries. The degree of state intervention depends on whether a government chooses to leave economic development and redistribution to the whims of the free market, or to be a more interventionist or developmental state.

In South Africa, we have committed to building a developmental state that efficiently guides national economic development by mobilising the resources of society and directing them toward the realisation of common goals. We place the needs of the poor and social issues such as health care, housing, education and a social safety net at the top of the national agenda.

A developmental state must be able to direct and support economic development through building a strong public service, creating an investor friendly environment, supporting small business development, using state owned enterprises effectively and driving strategic investment initiatives. The State has to play a role in keeping our economy competitive and close to the leading edge in the global development of knowledge and technology. The State has to be able to control its vast resources and directly apply them to the strategic tasks that will enable us to meet our goals.

The State needs strategic, organisational and technical capacity to play its developmental role.

Strategic capacity

Strategic capacity means the ability of the state to take the lead in defining a common national agenda, to mobilise all of society to take part in the implementation of this agenda and to direct society's resources towards this shared programme.

The developmental state must be able to unite the public sector, business, labour and civil society in a partnership geared to implement this shared programme.

The developmental state must also play a much stronger role in establishing clear, measurable and time-bound targets for common programmes, and for monitoring their implementation.

Organisational and technical capacity

The State needs the organisational capacity to ensure that it has the most effective and efficient structures and systems to realise its goals.  It has to improve systems and structures within each sphere of government, and national government has to provide the necessary cohesion to deliver the results needed.

The developmental state’s technical capacity is its ability to translate broad objectives into programmes and projects and to ensure their implementation. Economic growth and development need high quality and reliable government services – ranging from water and sewage to electricity generation, to transport and spatial planning.

Technical capacity also involves the state's capacity to plan and monitor the implementation of its programmes. It has to make effective use of intergovernmental and integrated planning across spheres of government and between different government departments.
All of these tasks require a stronger emphasis on the state's human capacity to carry out its work.

  1. Social partners and the People’s Contract

The success of a developmental state depends on the active involvement of social partners. Our approach to governance places strong emphasis on building a broad front for development that involves a strong relationship between government, labour, and business as well as other organisations that are formed by different groups of citizens (civil society).

Business, trade unions, religious organisations and other organisations like women’s, youth, sport and cultural organisations are often called the social partners of government. In South Africa we understand that government alone cannot grow the economy, solve all the community problems or deliver all the services to bring about a better life for all our people. Government needs to work together with all social partners and involve everyone in the effort to develop our country.

“The People’s Contract” is a phrase that sums up much of what we have described above. Government will work with all sectors in our society to build a better life for all. For example, when we talk of the “Moral regeneration campaign” government try to involve faith-based and educational organisations in a partnership. They are much better placed than government to reach their members and address moral issues that will help re-build our society.

When we want to address job creation and the economy, government has to work closely with business and trade unions. A forum like NEDLAC and the Growth Summit are mechanisms government use to involve them in a “People’s Contract” to work together for the benefit of our country and our people.