This working paper forms part of MISTRA’s priority research project, The Evolution of the Structure of the South African Economywhich is a critical analysis of the different pathways of economic restructuring, sustainable industrialisation and inclusive growth and development that could possibly characterise the country’s economy.  The research aims to provide an analytical account of sectoral evolution, changes in employment intensity; and the role of the state, labour, infrastructure and technological development in structural reform.


This chapter examines the relationship between a developmental state and social compacting, both conceptually and through historical precedents set in South Africa and the extent to which a social compacting approach could help to elevate economic growth, increase the rate of employment, and reduce poverty and inequality – all of which have been portrayed ad nauseum as the objectives of the South African state.