Assessing State Capacity in South African Industrial Policy Design and Implementation in a Changing Global Landscape

Abstract

South Africa has sought to transform and reindustrialise its economy. Through its industrial policy, it has intervened in several manufacturing sub-sectors. Despite the numerous state interventions, the South African manufacturing sector continues to deteriorate. The shorting comings of industrial policy have raised fresh questions of whether the Department of Trade Industry and Competition (DTIC) and the state, including its private sector partners, have sufficient capacity to design and implement appropriate industrial policy. This paper aims to assess state capacity in South African industrial policy design and implementation. In so doing, it analyses developmental economic literature, including the Weberian state, the developmental state, the human capacity theory and the bureaucratic rationale theory. The evidence for this research was collected through interviews with key stakeholders in the industrial policy, including thought leaders, policy researchers, policymakers, and academics. The paper finds that to achieve successful policy intervention; the country needs to develop supportive institutions and systems in industrial policy across government departments and different spheres of government. It further argues that the state outsourcing policy research capacity, if used correctly, can be developmental; however, the incorrect usage of outsourced capacity is detrimental to state capacity