Date of this Version
American Law and Economic Review
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.
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
Inman, R. P., & Rubinfeld, D. L. (2013). Understanding the Democratic Transition in South Africa. American Law and Economic Review, 15 (1), 1-38. http://dx.doi.org/10.1093/aler/ahs023
Date Posted: 27 November 2017
This document has been peer reviewed.