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Fiscal incidence of social spending in South Africa, 2006

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  • Servaas van der Berg

    () (Department of Economics, University of Stellenbosch)

Abstract

This paper presents the findings of a study undertaken for the South African National Treasury regarding the expenditure incidence of social spending in South Africa in 2006, and also regarding changes in incidence in the period following democratisation. Concentration ratios and concentration curves show that there have been considerable shifts in social spending incidence in the period 1995 (the year after democracy) and 2006, the most recent observation. In particular, social spending grants have become a major tool of targeting resources to the poor. Although the poor now get considerably more of social spending than their population share, the very skew underlying income distribution means that the post-fiscal situation still is one with great inequality. Moreover, evidence is presented that spending efficiency for social spending is low, thus there is only a tenuous link between social spending and social outcomes. Thus great shifts in social spending have had a limited impact on poverty and inequality in South Africa.

Suggested Citation

  • Servaas van der Berg, 2009. "Fiscal incidence of social spending in South Africa, 2006," Working Papers 10/2009, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers82
    as

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    File URL: https://www.ekon.sun.ac.za/wpapers/2009/wp102009/wp-10-2009.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:ilo:ilowps:485483 is not listed on IDEAS
    2. Miquel Pellicer & Vimal Ranchhod & Mare Sarr & Eva Wegner, 2011. "Inequality Traps in South Africa: An overview and research agenda," SALDRU Working Papers 57, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Servaas van der Berg & Krige Siebrits, 2010. "Social assistance reform during a period of fiscal stress," Working Papers 17/2010, Stellenbosch University, Department of Economics.
    4. Ada Jansen & Elizabeth Stoltz & Derek Yu, 2012. "Improving the targeting of zero-rated basic foodstuffs under value added tax (VAT) in South Africa - An exploratory analysis," Working Papers 07/2012, Stellenbosch University, Department of Economics.

    More about this item

    Keywords

    Fiscal incidence; Social spending; Poverty; Inequality; South Africa;

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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