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

Author

Listed:
  • Kalie Pauw

    () (Development Policy Research Unit (DPRU))

  • Liberty Mncube

    () (University of Cape Town)

Abstract

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.

Suggested Citation

  • Kalie Pauw & Liberty Mncube, 2007. "Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints," Country Study 8, International Policy Centre for Inclusive Growth.
  • Handle: RePEc:ipc:cstudy:8
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    References listed on IDEAS

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    Cited by:

    1. Gadom DJAL-GADOM & Armand MBOUTCHOUANG KOUNTCHOU, 2016. "Cross-County Poverty Comparisons In Chad: The Impact Of The Oil Revenues Redistribution Policy," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 44, pages 61-78.
    2. d'Agostino, Giorgio & Scarlato, Margherita & Napolitano, Silvia, 2016. "Do Cash Transfers Promote Food Security? The Case of the South African Child Support Grant," MPRA Paper 69177, University Library of Munich, Germany.
    3. Haroon Bhorat & Carlene Van Der Westhuizen, 2012. "Poverty, Inequality and the Nature of Economic Growth in South Africa," Working Papers 12151, University of Cape Town, Development Policy Research Unit.
    4. Haroon Bhorat & Morne Oosthuizen & Carlene van der Westhuizen, 2012. "Estimating a poverty line: An application to free basic municipal services in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 29(1), pages 77-96, March.
    5. Wiebelt, Manfred & Pauw, Karl & Matovu, John Mary & Twimukye, Evarist & Benson, Todd, 2011. "Managing future oil revenues in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options," Kiel Working Papers 1696, Kiel Institute for the World Economy (IfW).
    6. Margaret Grosh & Carlo del Ninno & Emil Tesliuc & Azedine Ouerghi, 2008. "For Protection and Promotion : The Design and Implementation of Effective Safety Nets," World Bank Publications, The World Bank, number 6582.

    More about this item

    Keywords

    Poverty; CCT; Inequality; South Africa; Opportunities; Challenges;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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