The potential of social grants expenditure to promote local economic development and job creation

Research Report. Centre for Poverty Employment and Growth, Human Sciences Research Council

South Africa’s publicly funded social safety net, which consists of multiple conditional cash grants, has expanded considerably since a child support grant was added to the old age pensions and disability grants in 2002. Jacobs et al draw together local and global evidence on the developmental potential of social grants, including a typology of social grants, an assessment of the developmental impact of welfare transfers, and evidence on the extent to which vouchers might deliver larger developmental spin-offs than might cash grants and in-kind social assistance. This paper argues for developmental social policy and explores options to use social grant transfer instruments (cash, in-kind and vouchers) to achieve localised, pro-poor developmental outcomes. The debate is whether and to what extent social transfers should be limited to cash-based welfare supplements. In this regard, unresolved questions turn on whether and how social grants could be harnessed for broader pro-poor goals. The paper constructs a conceptual framework that connects the development potential of cash, in-kind and voucher payment options with development interventions targeting smallholder farm production, employment and child development. It brings together evidence on relevant local and global case studies, using a typology derived from the conceptual framework