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Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints

  • Kalie Pauw

    ()

    (Development Policy Research Unit (DPRU))

  • Liberty Mncube

    ()

    (University of Cape Town)

For a large proportion of the South African population, social welfare grants are an important source of income. Since 2000, rapid increases in government expenditure on social security have further enhanced the contribution of welfare grants to the income of poor households and have thus been important in the fight against poverty. Given these apparent successes, many are calling for further expansions in social security provisioning, with the idea of developing conditional cash transfer schemes occasionally surfacing in policy circles. However, as we argue in this Country Study, there are various constraints to such expansions of the welfare net. Whereas in the past much of the increased expenditure on social security provisioning could be financed out of government revenue overruns, further increases are likely to be possible only through reallocation of government expenditures. There is already evidence of substitution taking place within the social budget since education and health expenditures have apparently declined in favour of increased welfare transfer expenditures. This trend, we argue, is untenable and may harm the already weak education and health services in South Africa. Conditional grants linked to school attendance and visits to health clinics would place further pressure on health and education services, as well as on the agencies responsible for disbursing and monitoring welfare payments in the country. We argue, therefore, that budgetary and service delivery constraints currently present a strong argument against expansion of the social welfare system in the immediate future.

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File URL: http://www.ipc-undp.org/pub/IPCCountryStudy8.pdf
File Function: First version, 2007
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Paper provided by International Policy Centre for Inclusive Growth in its series Country Study with number 8.

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Length: 38
Date of creation: Jul 2007
Date of revision:
Publication status: Published by UNDP - International Poverty Centre, July 2007, pages 1-38
Handle: RePEc:ipc:cstudy:8
Contact details of provider: Web page: http://www.ipc-undp.org
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  1. Servaas van der Berg & Ronelle Burger & Rulof Burger & Megan Louw & Derek Yu, 2006. "Trends in Poverty and Inequality since the Political Transition," Working Papers 06104, University of Cape Town, Development Policy Research Unit.
  2. Laura B. Rawlings, 2004. "A New Approach to Social Assistance: Latin America’s Experience with Conditional Cash Transfer Programs," World Bank Other Operational Studies 11813, The World Bank.
  3. Rawlings, Laura B., 2004. "A new approach to social assistance : Latin America's experience with conditional cash transfer programs," Social Protection Discussion Papers 30165, The World Bank.
  4. Case, A. & Deaton, A., 1996. "Large Cash Transfers to the Elderly in South Africa," Papers 176, Princeton, Woodrow Wilson School - Development Studies.
  5. Das, Jishnu & Quy-Toan Do & Ozler, Berk, 2004. "Conditional cash transfers and the equity-efficiency debate," Policy Research Working Paper Series 3280, The World Bank.
  6. Thurlow, James, 2002. "Can South Africa afford to become Africa's first welfare state?," FCND briefs 139, International Food Policy Research Institute (IFPRI).
  7. Fabio Veras Soares & Sergei Suarez Dillon Soares & Marcelo Medeiros & Rafael Guerreiro Osório, 2006. "Cash Transfer Programmes in Brazil: Impacts on Inequality and Poverty," Working Papers 21, International Policy Centre for Inclusive Growth.
  8. Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," World Bank Economic Review, World Bank Group, vol. 17(1), pages 1-25, June.
  9. Servaas van der Berg, 2002. "Issues in South African Social Security," Working Papers 01/2002, Stellenbosch University, Department of Economics.
  10. Murray Leibbrandt & Laura Poswell & Pranushka Naidoo & Matthew Welch & Ingrid Woolard, 2005. "Measuring Recent Changes in South African Inequality and Poverty using 1996 and 2001 Census Data," Working Papers 05094, University of Cape Town, Development Policy Research Unit.
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