We find that the Gini coefficient on “pre-grant” income is 0.03 higher than when calculated on either reported income or simulated income. Chapter 1 began by gathering the evidence to show that the long-run development trajectory in South Africa has been one that has generated a very high-inequality society with a strong racial component to this inequality. The bottom half of the income distribution was reserved for black South Africans and, at any of a wide range of poverty lines, poverty was dominated by black South Africans. Historically this was the result of active racial privileging and discrimination in state policy.