South Africa: Economic Development in Post-apartheid Society

Does ethnic heterogeneity contribute to economic development or impede it? This dissertation chooses to follow institutional economics approach to assess how such a relationship works in case of South Africa. As a country with unique ethnic composition of the population and troubled history of inter-group coexistence, it suits well the purpose of analyzing economic and political institutions. The analysis in the third section is the focal point of the paper. It is preceded by the first section which combines two streams of literature and introduces a coherent theoretical framework, and the second section where institutional development of the country is examined in detail and then generalized. The subsequent analysis shows that despite favorable settings of economic institutions, political institutions are not utterly beneficial for ethnic relations. This paper adds to the ongoing trend where detailed examination of a single country's settings is favored over vastly shallow and inconclusive quantitative research of institutions and ethnic heterogeneity in the literature.