How do wage subsidies support industrial decentralization? I am busy reading a paper that says, "The industrial decentralization policy in South Africa made some inroads, but disintegrated once wage subsidies were removed after 1994." I think it might be referring to the creation of separate homelands:
The logical conclusion of this process came in the 1960s and 1970s, when the apartheid government ‘‘elevated’’ the status of the African reserves to 10 putatively self-governing homelands, some of which were declared independent states. These homelands were thus set upwith their own assemblies, government departments, rights to confer citizenship, etc. The idea of ‘‘separate development’’ was that they would also have their own economies. But, given that these reserves comprised only 13% of the country_s land area, were often geographically isolated, and had terrible infrastructure, this was not plausible. Poorly conceptualized investments in agricultural irrigation schemes benefited mainly a few score white development experts and consulting firms. The industrial decentralization policy made some inroads, but disintegrated once wage subsidies were removed after 1994. The main source of formal employment within the homelands was no doubt the public service itself. The homelands thus had virtually no tax base, and so had to rely almost entirely on transfers from the apartheid government
Is it because wage subsidies provide stability for employment in a independent industry?
