Social Grants Dismantle Structural Poverty, They Don't Create Dependency

By Ebrahim-Khalil Hassen · 13 Jun 2009

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Picture: Sharon Schneider/Flickr
Picture: Sharon Schneider/Flickr

Do individuals spend their money better than families? This foundational question in the design of income support programmes for the poor has not been robustly debated. Instead, the strong and robust debates have historically focussed on the possibilities of the universal provision of state income support through a Basic Income Grant (BIG).

During his inaugural State of the Nation address, President Jacob Zuma expressed ANC policy to mean that future expansion of the social grants system would be linked to recipients fulfilling conditions, in addition to meeting requirements showing that their incomes fall below the means test.

The ANC manifesto commits the current government to expanding the eligible age for the Child Support Grant from 15 years to 18 years. However, this will be conditional on children staying enrolled and attending school. Moreover, media reports have indicated that the proposed income support for the unemployed will be linked to the condition of ‘continued job search’ -- although government has yet to confirm this approach.

Synchronously then, government intends expanding the social grant system, while attempting to ensure that it supports behavioural change.

The current policy position of government mirrors power dynamics in our society, which if they dictate policy, will continuously lead to ineffective and incoherent policy development and design.

On the one hand, the agenda for the expansion of social security has its strongest support amongst activists in the churches, trade unions and non-governmental organisations who campaigned for a Basic Income Grant (BIG). BIG supporters argue that the universal provision of income to all South Africans, would be administratively simple to achieve, affordable and most importantly, break the back of absolute poverty in South Africa. The shift towards introducing conditions in social security could be seen as a defeat for advocates of the BIG. However, these activists will appreciate that increasing the age for access to the child support grant and a serious consideration for some form of income support for the unemployed, are important victories.

On the other hand, the BIG proposals were questioned on both affordability and philosophical grounds. The affordability argument was not simply about whether government had the money or not. The other significant dimension was that taxpayers were already supporting a rapidly expanding social grant system, and would be reticent to support a further and even more rapid expansion. In its most potent propaganda, it indicates that 5 million taxpayers support a social grant system of 13 million people. In policy and media reports, this one liner carries weight, despite the fact that the poor do indeed pay taxes through the regressive VAT system, and that companies, in addition, provide taxes. Philosophically they argue that work is more important than grants, and that the South African state should be a ‘developmental’ rather than a ‘welfare’ state.

In effect, one could argue that there is a stalemate around social security issues that provides a context for the current trajectory government is taking. The expansion of social security appeals to advocates for universalism, whilst attaching conditions makes social grants more acceptable to its traditional opponents. This form of policy outcome is common in unequal societies, where the distinction between political and economic power results in two distinct and often-competing centres of power. In attempting to meet the competing aims of these centres of power, public policy descends into that well-worn reality of meaning everything to everyone and nothing much for the beneficiaries themselves.

Most importantly, the current proposals prop up the 'straw person' created in the debates on social security reform: the deserving poor.

There has been an underbelly to the debates on social grants, focused on describing the poor as lazy, deceitful, rent seeking and ultimately undeserving. In general opinion, the expansion of social grants is being blamed for a lack of entrepreneurship, making people lazy and providing the reason for increases in teen pregnancies.

The evidence, however, suggests that households receiving social grants are more likely to have children in school, engage in job search and that there is no correlation between pregnancies and access to grants.

The concept of the 'deserving poor' however seems to be an implicit underpinning, even if the majority of policy actors do not share its caustic rendering.

In some sense, it might be that as a nation, we have a need to be convinced that with a little effort and smidgen of assistance, our society can produce winners that would ensure success stories. In fact, there are individuals who, despite the odds, have succeeded and are justifiably praised.

However, to reach developmental targets, we need to focus not just on the exceptionalism of a few. We have to move millions out of poverty. In doing this, one has to accept that the structural features of our society do not permit rapid and sustainable upward mobility. In fact, just surviving from day-to-day takes a great deal of effort and, yes, hard work.

Studies of informal traders, as well as household surveys, provide ample evidence that to be poor, is hard work. In a society with opportunities, the fruit seller on the pavement would have ample access to training, credit and mentorship to move from the pavement to a formal business, or from the pavement to a classroom. The introduction of conditions will allow us to argue that we are not creating ‘dependency’, that independence and opportunity will be sustained.

However, the foundational question of providing grants to either families or individuals, immediately suggests that more thought is needed in the design of current proposals on social grants.

In a recent interview, the director of the celebrated Mexican conditional cash transfer programme asserts, "Co-responsibility is a key factor in this programme, because each family plays an active role in its own development." This programme like several others in Latin America and increasingly across the globe, provide conditional cash transfers to poor families, based on them performing certain tasks, such as, immunisation of children, attendance at schools and even participation in training programmes.

There are nuances in the design of each of the programmes; with some even having a basic component, which is non-conditional, together with conditional transfers. The evidence suggest strong compliance with conditions, such that in effect, the designers of the conditional cash transfer system are focussed on building cohesion and developmental strategies within a household. These programmes are not without their critics, who argue that the programmes do not provide mechanism for the accumulation of assets by poor households.

Importantly, 'families' in each of the programmes are not assumed to be nuclear families. Programmes cater for the diversity of households. The South African proposals, however, identify individuals and thus cannot make similar assumptions to the arguably successful conditional cash transfer programmes of countries like Mexico.

In response, one might argue that this means looking for 'deserving families' in South Africa.

In policy parlance one could argue that social capital would be built, household stability enhanced and programme compliance improved. Certainly the provision of grants to households would have a higher prospect of success. However, can we actually find these families?

A complicating factor is that the information systems in many developing countries for identifying the poor are significantly more developed than those in South Africa. In fact, South Africa does not have an official poverty line, but in effect, the means test provides a cut-off point.

Yet, as shown in the most recent Income and Expenditure Survey, take up in the bottom income quintile in South Africa has been lower than expected. This is sometimes due to not having official identity documents, or simply due to what development experts call informational asymmetries -- they simply do not know what they can access or how to access the grant system.

Despite the often-heroic efforts of social workers in government to ensure access, the problem of available facilitators in government is an important institutional issue. Non-governmental organisations have attempted to fill the gap. However, it is left to the discretion of many frontline workers to facilitate access to information and to highlight procedures.

Importantly, the National Income Dynamics Study (NIDS) being undertaken by The Presidency should fill the information gaps that currently hamper take up and extension. Moreover, it could also provide the basis for linking government workers with families to facilitate access. For example, in the Chilean programme, it is a requirement that recipients meet with a social worker.

In effect, our current proposals assume that weak and excluded people are able to navigate the bureaucratic process to access grants.

There is a truism that "grants will not solve poverty." However, for South Africa, the message should be that improving the design of social security could play a vital role in breaking structural poverty. This requires careful consideration of the current design for the expansion of social security. Refocusing grants to provide extended support to families would require a review of existing grants and possible consolidations.

Most importantly, it would provide a better option than current policy, which seems underpinned by the idea that we must not provide support to the "undeserving poor." South Africans must debate these proposals, because the design of new policies will shape our ability as a society to eradicate poverty.

Hassen is the founder of Zapreneur and Proposal Desk, both websites aimed at answering the question, "Can the Internet help South African small business?"

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24 Jun

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