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Ending poverty and accelerating growth in South Africa, through the expansion of its social grant system

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  • Fofana, Ismael
  • Mabugu, Ramos E.
  • Camara, Alhassane
  • Abidoye, Babatunde

Abstract

South Africa has one of the most extensive social assistance systems among developing countries; however, the proportion of the population below the national poverty lines remains relatively high. Thus, we develop a micro-macro framework to assess the economic growth implications of expanding South Africa’s social grant system under alternative conditions. We find that conditional poverty-alleviation social transfers foster growth while unconditional redistribution towards lower-income earners can hinder economic growth. From policy perspectives, we show that the transfer of purchasing power to extremely poor beneficiaries and their economic participation are required for poverty-alleviation social transfers to have positive economic outcomes.

Suggested Citation

  • Fofana, Ismael & Mabugu, Ramos E. & Camara, Alhassane & Abidoye, Babatunde, 2024. "Ending poverty and accelerating growth in South Africa, through the expansion of its social grant system," Journal of Policy Modeling, Elsevier, vol. 46(6), pages 1090-1102.
    • Handle: RePEc:eee:jpolmo:v:46:y:2024:i:6:p:1090-1102
    DOI: 10.1016/j.jpolmod.2024.07.003
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