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Devising Social Security Interventions for Maximum Poverty Impact

Year: 2002
Working paper number: 013
Author: van der Berg, Servaas
Unit: SSU

Social security, designed to provide protection against various contingencies, is not well suited to the elimination or redress of large-scale, endemic poverty, nor is it effective against the deep poverty caused by events such as the Great Depression. Social security on its own cannot overcome poverty of this magnitude, particularly in developing countries. For reasons of fiscal and administrative capacity, inter alia, social security usually expands through piecemeal reforms rather than through grand schemes. The basic income grant was, in its conception, just such a grand scheme and its proponents' untempered enthusiasm has unfortunately done harm to the cause of social security's realistic expansion. Now even the Taylor Committee, after initial enthusiasm, has accepted that a basic income grant is not viable. And so the time has come to return to the job at hand for social security: to painstaking and piecemeal analysis, to the careful weighing of alternatives, and to informed debate. This article attempts to contribute to this end. We show that the South African social security system, though very advanced for a country at this level of per capita income, still has pervasive gaps in its coverage and is close to the limits of its capacities. Yet the Constitution obliges government to work towards the progressive expansion of social security and in this article we support incremental and targeted social security interventions as the strategy most likely to contribute to poverty reduction. We use an analysis of 1995 income distribution data to assist us in identifying where such social security interventions are most likely to have a significant poverty alleviating effect.

Publication file: wp13.pdf