Economic policy has never been simply a technical, neutral exercise devised by impartial bureaucrats, and, in the modern world, the relationship between politics and economics has become ever more apparent and explicit. The nature of economic policy is determined by political variables and economic interests influence state priorities as much as the availability of material resources. Thus the adoption and legitimation of economic policies represents the advancement of political as well as economic interests, and the implications of economic policy are as much political as they are socio-economic. It can therefore be argued that the art of generating and implementing a particular set of economic policies is, at one level, merely ‘the continuation of politics by other means’.

This ‘continuation of politics’ acquires added significance in societies that are in transition to a new political order. Political transitions enable different social groups to enter the political arena in new ways, and this creates possibilities for significant changes in economic policy. South Africa's democratic transition is a typical example. The debate around future economic policies became one of the central contests between contending social groups and political organisations. The contest revolved around three key issues: growth, poverty alleviation and inequality. The goals of growth and poverty alleviation are widely shared across the political spectrum but political actors have very different views on how to achieve these goals. Some believe in unhindered markets, whereas others argue for market regulation and the containment of excesses, but almost all recognise the moral and strategic responsibility of tackling these problems.

Inequality is another matter. Many political actors, some explicitly and others implicitly, believe that inequality is part of the modern economic condition, and a necessary price to pay for economic growth and poverty alleviation. Chaudhuri and Ravallion (2006), for example, cite the examples of the United States, and more recently China and India, to sustain their argument. Others, such as Stiglitz (2012) draw on western Europe's social democracies and developing states in South East Asia, to argue that that inequality can be reduced with appropriate policies and interventions if it is twinned with poverty alleviation and sustainable economic growth.