Working Paper

The Rural Poor, the Private Sector and Markets: Changing Interactions in Southern Africa

Published on 1 August 2003

One of the central tenets of much current development thinking in southern Africa is that market-oriented strategies and private sector involvement must be the basis for future economic growth. This has underpinned structural adjustment and economic policy reform policies in the region over the last decade or more. It also underlies the argument for encouraging external foreign direct investment (FDI) as a motor for growth.

However growing evidence suggests that such a strategy has not paid off. Economic growth rates have been disappointing, private, and particularly foreign, investment has been limited, and employment in the formal sector has fallen dramatically. Structural adjustment and market liberalisation have clearly not delivered the developmental benefits claimed of them, and people’s livelihood opportunities have, it seems, declined over the same period and their levels of vulnerability have increased.

The increasing recognition that the standard neo-liberal prescriptions were not having the expected benefits, especially for poor people, has resulted in some rethinking about how best to redirect the benefits of globalisation and economic reform towards the poor, and how to offset some of the losses.

Thus ‘pro-poor growth strategies’, ‘making markets work for the poor’ and ‘growth for redistribution’ have become well-worn slogans. However, the practical and policy measures required, whereby the benefits of an engagement with a globalised economy, investment by the private sector and liberalisation privatisation measures can result in poverty reduction, remain vague.


Lyla Mehta

Professorial Fellow

Ian Scoones

Professorial Fellow

Publication details

published by
Mehta, L., Scoones, I. and Ashley, C.
SLSA Overview Paper, volume 34, issue 3


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