Lesetja Kganyago: Institutions, leadership and the populist challenge

Keynote address by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the Arbitration Foundation of Southern Africa, Johannesburg, 13 February 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good day and thank you for inviting me to give this keynote address.

Let me join you all in congratulating Andile Nikani on his appointment as the Chief Executive Officer (CEO) of the Arbitration Foundation of Southern Africa.

Arbitrators work to achieve fair outcomes. Fairness is an objective that is valued universally, even by children from an early age. But arbitrators like you also achieve something else.

As the field of law and economics has shown us, when you apply economic reasoning to law, you often find that traditional legal approaches overlook the importance of efficiency. In a dispute, especially a professional dispute, parties fear long delays and excessive costs. If you get stuck in a process like that, even winning offers little consolation.

So let me commend you, not only for ensuring fairness, but also for doing it efficiently enough that parties freely choose you to resolve their conflicts and voluntarily accept your decisions.

For this keynote, I have chosen a subject that I hope will interest both economists and lawyers. I want to talk about the populist challenge to institutions and what it means for leaders.

The fact is that populism is widespread in the world.

It was once seen as a developing-country phenomenon − something rooted in places like Argentina − and not much of an issue in mature democracies. But no one believes that now, especially not since 2016, with the surprise outcomes of the Brexit referendum and the United States election. Last year − the year of elections − made that point even clearer. Whether we are talking about rich countries or poorer ones, there is no denying that we are in an age of populism. We need to reflect on why populist ideas have this appeal, and how we can respond.