South Africa: A Dynamic Social Contract

political and security landscape in Somalia: (1) the bargain between international partners and the federal government, which results in both dependency and detachment from the citizenry; (2) the negotiated two-level bargain between the central government and local strongmen, which intervenes in the relationship between the state and the citizenry; and (3) the coercive relationship between the violent insurgent group al-Shabaab and the citizenry, which exists parallel to the deals struck with the government and local strongmen.

Most alarmingly, while the official government struggles to establish a direct protection-taxation relationship with its citizens, al-Shabaab has successfully developed its own coercive deal. Across large swaths of the countryside, the insurgency has developed strategies to directly tax citizens across clan lines and to enforce their rule over these populations. Although their methods are extraordinarily abusive, the fact remains that these insurgents have forged a type of protection-taxation relationship that resembles a rudimentary social contract between citizen and state. While the official government has been unable to forge a direct deal with its citizens, al-Shabaab has learned how to effectively tax and govern local populations.

Why then has al-Shabaab had greater success in establishing direct protection and taxation across clan lines while the Somali government has not been able to provide a viable social contract with its citizens? An examination of the fragmentation of the social contract and an effort to model bargains as multiple and competing protection-extortion rackets show that these deals have created perverse incentives that encourage powerholders to behave in ways that undermine true state consolidation. International support for the Somali state has inadvertently encouraged these perverse processes and thus made it more difficult to create a normal social contract between state and citizen.

South Africa: A Dynamic Social Contract

South Africa’s political transition is arguably one of the most remarkable in history, but its evolution to an inclusive, prosperous society is still in process (World Bank 2018a). The fragility of the social contract is seen as a symptom of an “incomplete transition.” When many citizens are excluded from job opportunities and, hence, from joining the middle class, significant pressure is put on the social contract.

The case study (Watts 2018b) starts with understanding apartheid as a form of social contract predicated on an institutionalized form of racial exclusion, oppression, and inequality. Over the course of the twentieth century, the components of that contract were renegotiated around class and ethnic tensions within the white population as well as the changing strategies of coercion and consent with respect to the black and “colored” populations. The collapse of

this codified system of institutionalized racial segregation in the early 1990s produced a negotiated transition of the social contract based on pact-making, bargaining, and brokerage institutions.

The postapartheid social contract was a form of developmental welfarism that started during the Nelson Mandela presidency (1994–1999), though its specific institutional form took shape during the Thabo Mbeki era (1999–2008). It was organized around three policy platforms: (1) massive expansion of the social protection system, focusing principally on mothers and the aged; (2) a strong focus on “deracializing” control of the economy through affirmative action policies designed to fast-track the placement of black people into management and senior management positions; and (3) the transformation of white ownership of the economy through Black Economic Empowerment policies. Mbeki attempted to renegotiate the social contract through an organizational shift of political control away from the African National Congress itself to the presidency, an institution that he sought to build into a powerful apparatus of control and coordination at the center of the state. This shift was resented, particularly by provincial party bosses and black business classes, and the party reestablished control of the state by recalling a sitting state president.

The ascension of Jacob Zuma in 1999 marked a radical unraveling of a nascent democratic contract, displacing the African National Congress as the primary force for transformation in society. The democratic social contract was “repurposed” and replaced by a party hegemony operating like a shadow state, a well-organized network that strives to manage what is often referred to as the symbiotic relationship between the constitutional state and the shadow state. At the center of this repurposed social contract stands a plethora of “broker networks” linking the party elites, controllers, entrepreneurs, brokers, and middlemen, often transnational in scope and cutting across party, business, and ethnic lines.

The indicators developed for this report paint a complex picture of the social contract but one largely consistent with the sense of deepening corruption, state illegitimacy, and civil society activism. South Africa scores slightly above average for civil capacity but also higher for state capacity compared with other African states. The relatively high score for state capacity is driven by high state authority and state effectiveness compared with the other countries in the region, capturing bureaucratic capabilities and patterns of administrative and organizational performance. State capacity does properly reflect, however, the institutional inheritances from the apartheid state and the extensive state-building undertaken since 1994. Civil society capacity is, as expected, quite high, consistent with both the recent history of citizen pressure and engagement and the proliferation of civil society groups and organizations.

When social divides are large, as in South Africa, it is difficult to build a strong social contract. The lack of job opportunities, especially for young people,