Business Economics and Public Policy Papers

Document Type

Journal Article

Date of this Version

2013

Publication Source

American Law and Economic Review

Volume

15

Issue

1

Start Page

1

Last Page

38

DOI

10.1093/aler/ahs023

Abstract

South Africa's transition from apartheid to democracy has been successful because its federal governance has provided protection for the economic elite from maximal redistributive taxation. Federal governance creates a “hostage game” in which the majority central government controls tax rates, while elite-run provinces control redistributive services. South Africa has found an equilibrium that has improved the welfare of the white minority and the black majority. However, the success of the federal structure depends on the patience of the majority and their demands for redistributive public services. An impatient and more radical majority party threatens the current equilibrium.

Copyright/Permission Statement

This is a pre-copyedited, author-produced PDF of an article accepted for publication in American Law and Economics Review following peer review. The version of record Robert P. Inman, Daniel L. Rubinfeld; Understanding the Democratic Transition in South Africa,American Law and Economics Review, Volume 15, Issue 1, 1 March 2013, Pages 1-38, https://doi.org/10.1093/aler/ahs023 is available online at: https://doi.org/10.1093/aler/ahs023

Embargo Date

1-11-2015

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Date Posted: 27 November 2017

This document has been peer reviewed.