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

Karl Pauw and Liberty Mncube

Working Papers from University of Cape Town, Development Policy Research Unit

Abstract: For a large proportion of the South African population social welfare grants are an important source of income. Rapid increases in government expenditure on social security between 2000 and 2006 has further increased poor households’ reliance on welfare grants and has been important in the fi ght 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 surfacing in policy circles from time to time. However, as we argue in this paper, various constraints to such expansions of the welfare net exist. Whereas in the past much of the increased expenditure on social security provisioning could be fi nanced out of government revenue overruns, it is likely that further increases will only be possible through a reallocation of government expenditure. Already there is evidence of a substitution taking place within the social budget: expenditure on education and health seems to have deinclined in favour of increased welfare transfer expenditure. This, 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 will only put further pressure on health and education services, as well as the agency responsible for disbursing and monitoring welfare payments in the country. We argue, therefore, that budgetary and service delivery constraints, at the present moment, present a strong argument against any expansion of the social welfare system in the immediate future.

Keywords: social security net; social welfare; welfare grants; South Africa (search for similar items in EconPapers)
JEL-codes: A1 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2007-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published in Working Paper Series by the Development Policy Research Unit, September 2007, pages 1-52

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http://hdl.handle.net/11427/7272 First version, 2007 (application/pdf)

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Working Paper: Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ctw:wpaper:07127

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