Guest blog by Sibusiso Thami Gambi, LEG’23
A key learning from the course is that, simply put: context matters. One cannot simply apply “best practices” blanketly. There is a ready example in South Africa’s public spending on education. The country’s spending (as a share of GDP) is higher than the OECD, but education outcomes have not nearly matched the size of this spend.
Benchmarking or “box-ticking” approaches to reforms have largely not been a key driver of growth accelerations, as highlighted by the research of Pritchett and Rodrik. Many best practice policy solutions downplay the starting point from which they are to address a particular challenge. In South Africa’s case, there are significant barriers (spatial, socioeconomic) just accessing physical and human capital that present significant “spanners in the works” and all but rule out a “copy-paste” approach.
Another key takeaway is the notion that inclusion is itself a growth strategy. These are not competing outcomes, as is argued in much of South Africa’s private-sector’s discourse, but rather complementary ones. The course reinforced existing literature that significant inequality contributes to poor physical and human capital accumulation, lower labour productivity, and lower investment due to the prospect of socio-economic instability. This must be championed by lowering fixed costs for the excluded population and raising the productivity of people outside of relevant networks.
One of the fundamental take-aways of this course relates to defining the problem correctly. I was able to redefine and update my growth problem to include measurable metrics of success or failure, i.e. moving from “Achieving inclusive growth” to “Achieving GDP growth that narrows income inequality”.
In defining the problem, one also need not overcomplicate or try to predict the course of the analysis, but rather look to directly engage with the relevant stakeholders (e.g. prospective investors) on their actual challenges. For example, we could enquire directly from prospective employers why they underutilise existing public sector portals for new job entrants. What are the specific concerns (e.g., administrative burden, low quality of potential candidates)? The action-learning oriented iterative approach to reforms benefits from not necessarily requiring a clear idea of the solutions to all the problems, as these will essentially be unearthed in the process. This works to make the growth challenge less daunting as well.
Another key insight is that, in terms of its economic complexity, South Africa is in a good position to accelerate its growth by entering into new products. This is an unexpected outcome from my perspective, that South Africa’s connectedness and the endowment of KnowHow is relatively strong. According to the Harvard Atlas of Economic Complexity, South Africa can leverage existing successes to take advantage of diversification opportunities specifically in plastics and industrial machinery.
South Africa’s growth challenge is a profoundly complex one. We are going into a strategic planning period over the next few weeks, and the timing of this course is rather opportune. The PDIA approach will inform how research problem statements are structured going forward, with emphasis on the authority, acceptance and ability (AAA) technique in order to raise the probability of success.
My initial fishbone diagram touched on the main growth challenges facing South Africa, however it was subsequently clear that there was insufficient deconstruction of the problems and that there is room for more granular “entry points” to solving the problems. While there has been some refinement to the initial fishbone, this continues to be an iterative and difficult process.
What has also been encouraging is the overall approach makes tackling the growth challenge less daunting. Furthermore, it does not necessarily require an overly resourced team or going through draconian channels. Smaller nimble teams can achieve results that can build to greater outcomes. The team would benefit, however, from being multi-disciplinary and widely-networked given that, in practice, issues to be resolved span across multiple entities.
There is some work required, though, to build up reserves of permission and trust from people in authority. South Africa is unfortunately plagued not by policy uncertainty necessarily, but policy inertia that can only be decisively addressed by making it matter to decision makers.
To my mind, producing the “wins” necessary to maintain legitimacy and keep the backing of decision-makers will be one of the most difficult aspects to sustain consistently in practice, particularly in the current fraught and fluid political environment. In practical terms, reinforcing to decisionmakers what the problem could potentially look like “solved” helps to reinforce positivity and momentum and keep energy-stealing despair at bay.
It would also be immensely useful to get some consensus of the hierarchy where there are conflicting or competing policy outcomes. This prioritization would inform what is most urgent/impactful and therefore inform the sequencing of policy interventions.
Perhaps selfishly, I would like to suggest South Africa as one of the country case studies for the next course. South Africa is, unfortunately, a rather unique example of multi-dimensional poverty and inequality. The country remains one of the most unequal, if not most unequal, non-wartime countries in the world. Its inequality spans across incomes, across wealth, across means of production, across skills and education, and more broadly across opportunity. One would be hard pressed to find a harder nut to crack.
This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. 72 Participants successfully completed this 10-week online course in May 2023. These are their learning journey stories.