in implementation of equitable growth policies and also by lack of resources. When the new democratic government came to power in South Africa in 1994, it had the task of reducing inequalities in a country that was deeply divided, not just economically but also spatially. The black townships were separated from white areas, and these townships lacked the basic resources and infrastructure needed to ensure a basic minimum standard of living. Thus, the problem of equitable development was not just related to equitable distribution of wealth but also to balanced development of regions which had developed unequally (McDonald and Piesse, 1999). However, equitable growth policies that were enacted by the government primarily focused on overcoming inequalities brought about by decades of white apartheid government by bringing more blacks into employment and firm ownership through the BEE program. The Broad-Based Black Economic Empowerment (BBBEE) legislation emphasized black participation in ownership and management, increasing the number of blacks in the workforce and increasing indirect benefits to the black population through preferences in procurement contracts and enterprise development (Horwitz and Jain, 2011: 302). What was required, but was lacking, was greater investment in sectors that would have increased productivity in the economy, such as education and health care, better physical infrastructure, and access by providing rural workers with access to productive land. South Africa continues to perform very poorly in most socio-economic indicators. Income inequality remains high, with 60% of the population taking in 10% of national income. Lack of access to basic education hampers access to higher education, with only 1.5% of the population having a degree in 2012. Land distribution remains skewed, with 8% of the population owning 70% of the land, after almost two decades of post-apartheid governments (Omilola and Akanabi, 2014: 566). Poverty continues to remain widespread, with inequality hindering poverty reduction efforts across South Africa (Barros and Gupta, 2017: 29).
Brazil is unique among BRICS countries in terms of both improvements in income equality and socioeconomic indicators since 2000. Brazil was the only BRICS country which saw its Gini coefficient decrease between 1990 and 2010. The other four BRICS nations saw income inequality increase with an increase in economic growth. Brazil also saw the steepest decline in infant mortality (69%) and child mortality (71%) among the BRICS countries (Mujica et al., 2014: 406).
This divergence from other BRICS countries is not surprising given significant shifts in political power that occurred in Brazil since 2000. The government of President Luiz Inácio Lula da Silva of the Brazilian Workers Party, which came to power in 2003, was left-wing in orientation. It laid considerable stress on reducing income inequality and implemented income transfer schemes to help poor Brazilians get access to health care and education. Brazil also spends about 23.7% of its GDP on direct transfers, pensions, education, and health (Lustig, 2016: 26), one of the highest among BRICS countries, and the impact of this is reflected in sharp improvements in socio-economic indicators that Brazil has demonstrated.
The income transfer schemes of the Brazilian government had two significant effects on the quality of economic growth. Some of the schemes, such as the Bolsa Famila scheme, were conditional transfer schemes which meant that the money transferred was used only for intended objectives — to ensure that expectant mothers visited antenatal clinics regularly and ensured that their children were properly vaccinated and attended school regularly. Other schemes such as the Continued Provision Benefits were unconditional transfer schemes which increased purchasing power among the poor. There is evidence to prove that such transfers led to increased private sector investment in underdeveloped regions of Brazil, particularly the North-East (Limoeiro, 2015). Brazil under the Workers Party government provides evidence, just as the Chinese case in the late 1940s and early 1950s, that targeted government intervention can have a significant positive impact on income equality and socio-economic development. However, as the experience of China demonstrates, such interventions can lose momentum as a result of significant changes in government policy leading to a reversal of policy gains.
China, despite its significant achievements in poverty reduction, gender equality, health care, and education, has experienced higher levels of inequality since beginning the process of liberalization and opening of its economy to Foreign Direct Investment (FDI). Household income inequalities have increased to levels which are considered ‘moderately high’ by international standards (Li and Sicular, 2014: 35). The disparities increased after the government established control after the Tiananmen Square uprising and focused on achieving rapid economic growth. Rising prosperity was not equally shared, and a society that was once largely egalitarian in character began to experience higher levels of inequality comparable to many of its East Asian neighbors. The increase in disparities was largely brought about by price reforms which increased costs to consumers. Reduction of government funding for health care and education, and introduction of user fees and higher charges has meant increasing disparity in access to them, especially in rural regions (Saith, 2008: 749). A second factor was the shift from a focus on agriculture to development of industries both through support for state-owned enterprises and FDI-led coastal industrial development. These coastal provinces were given benefits by way of tax concessions, regional autonomy, and the right to lease and sell land to foreign nations (Yao and Zhu, 1998: 146–148). The coastal development policies and the opening up to FDI in the 1990s led to mass migration of workers from rural to urban coastal cities, leading to greater inter-provincial inequalities in growth (Wei, 1999: 51). Inland regions were not given similar benefits. Provinces which are open to international trade and have seen increases in investment have also seen increases in income inequality (Chen, 2015).
Russia experienced a period of rapid economic growth after recovering from the initial phase of economic and social disruption caused by the collapse of the Soviet Union. This enabled the country to reduce poverty, which had sharply increased during the initial phase of the transition. However, one of the major problems that Russia has faced in ensuring greater equity in growth outcomes has been persistent, and increasing, income inequality (Benini and Czyzewski, 2007: 131–36). This makes poverty reduction and improvement in other social indicators dependent on government social sector spending. High commodity prices since 2000 helped the Russian government to increase spending on ‘populist’ social welfare programs aimed at increasing domestic political support. However, income inequality has increased, and in recent years when economic recession has forced cutbacks in government spending, there has been an increase in people living below the poverty line (Popova et al., 2018: 3). Wealth inequality has also increased quite substantially with levels of concentration of wealth increasing between 1995 and 2015 (Novokmet et al., 2017: 39). The share of national income of the top 50% of the population has increased to over 80% today from 70% in 1989. The share of the top 1% has increased to 45% (World Inequalities Report, 2018: 113).
Corruption and Political Capture
All five BRICS economies show high levels of income inequality and poor socio-economic indicators despite periods of high growth. In China, Brazil, India, and South Africa, income inequalities and levels of development are such that government intervention and subsidies are required to ensure maintenance of even minimum living standards among the poorest sections of society. Even Russia, relatively the most developed of the five economies with the highest per capita income, is impacted negatively by reductions in government spending on social welfare programs in times of economic crisis. What explains the high levels of income inequality and the failure of all five countries to ensure more sustained and inclusive economic growth? While there are undoubtedly country-specific reasons for this failure, there is one factor that is common to all five countries — high levels of corruption and political capture of government policy which impedes both the effectiveness and inclusiveness of growth. Political capture and corruption lead to non-inclusive growth in diverse ways. Political capture often leads to governments taking decisions which benefit a few firms or individuals to common detriment. It often leads to significant loss of government revenue as natural resources or assets are transferred at less than its true value. Corruption leads to inefficiencies in implementation of social welfare programs and raises social welfare costs significantly.
In India, the nature of state–society relations is such that personal relationships, particularly those related to caste, kinship, and social
