In the current state of research on sustainable redistribution strategies in South Africa, it is. It is conceptually a tool for poverty alleviation, ignoring for the moment its other shortcomings raised in the remainder of this paper.
3] Building a welfare state through merit goods rather than universal grants
This required a permanent non-emergency provision for alleviating social distress in the allocation of the state budget. The following list of meritorious goods unfulfilled in the Swedish case provides a guide to the items still lacking in South Africa's current efforts to build a welfare state (Bergmann.
4] Economic and social rights and a basic income grant
An extrapolation of marginal spending decisions to a BIG, such as a hypothetical increase in income in the hands of certain poor people, may then be possible. Interestingly, prominent international institutions in the field of development now manifest a broader interpretation of their goals even when such goals are not explicitly linked to the fulfillment of human rights. Ironically, this would be a policy-driven obstacle to the serious implementation of the Bill of Rights in the South African constitution intended to exalt equality as a moral goal.
Those individuals at the bottom of the income distribution by this applied measure are considered the most deprived. Ö Increasing the level of education, training, skills and other human capital characteristics of those at the bottom of the ability distribution. There is a central objective the fulfillment of this "basic right" as an ingredient in the deepening of democracy.
5] The normative dimensions of income grants
- The principle of reciprocity is the most prominent omission from the local advocacy literature. There are no statements asserting that the individual’s
- Commitment to the freedom of every individual, for instance the real freedom stressed as the ultimate objective by Van Parijs and others, seems to be
- As discussed in the taxation section [8] below, the South African income grant proposals contain the stipulation that a maximum income threshold that
- Although the idea of a grant in itself does not stipulate any particular level of income paid, there are major differences between the proposals for industrial
- One other difference between industrial country and South African contexts for the institution of grant income is the markedly greater volatility in the
- In the international literature, much attention has been devoted to the
- Two final issues to arise out of the contrast between international and South African grant income discussions are (i) the feminist strand observable in the
Oddly enough, this is not a deliberate limitation found in basic income concepts in the international literature. In practice, the amount of the income grant in the policy debate is more often deliberately left open. But the South African discussion misses this problem because the main determinant of the future level of basic income is assumed to be a hypothetical budget decision about affordability and opportunity cost.
The implications for the potential role that income subsidies can play in the fight against poverty must be speculative in the absence of comparative research. First of all, the level of subsidy will be far too low in the near future. The second point about falling costs is simple enough, but not addressed in the local literature.
6] Macroeconomic implications of income grants
It is important to mention not because employment generation is now said to be at the heart of South African policy actions (a useful by-product for this discussion), but because analytical work on the NAIRU has shown that policy actions that aim more stability may push inflation and employment in opposite directions in the short term. A recent example of thinking about an output gap as a structural constant is found in the 2003 Human Development Report for South Africa. With almost 50 percent of the population living in poverty, the total level of financial resources for purchasing goods and services in the economy remains very limited (constrained aggregate demand).
Second, in no economy in the world is the rate of utilization of a sector of production, especially manufacturing as the most common, at all times a figure approaching 100 percent. In the fourth or final phase, some measures of orthodox stabilization were inevitable, usually under a new government, but after great suffering of the population. This was a wrong premise to start the argument for macroeconomic expansion in the Latin American cases and it is a wrong assumption to make in South Africa.
7] The targeting and means testing of social transfers
It is assumed that this is primarily on equity grounds because the resulting saving in the total cost of the policy is difficult to predict in advance. Pitfalls in the targeting of poverty reduction instruments are recognized in the literature, but perhaps less so in practice. Universal access to income transfers would have a uniform effect on the welfare of the poor if this group were homogeneous in the relevant respects.
First, differences between the income levels of poor individuals and households in the pre-allocation situation are clearly one feature of interest. Second, gender sensitivity is a compelling measure of interest in poverty reduction, as is the frequency of female-headed units in a group of households designated as poor. Fourth, there may be a serious urban bias in the availability of physical and social infrastructure.
8] Behavioural responses of recipients and payers to tax-transfer mechanisms
It is generally accepted that a decline in labor supply is more likely than a compensatory increase in employment, aimed at maintaining the same level and mix of individual income and leisure as before the payment of the tax. But this must also be a preliminary statement, because there is no empirical research that is difficult to conduct, because respondents can adjust their answers to their own benefit. But the difference in the case of the subsidy would be that ineligible recipients would be tracked afterwards and required to repay the full annual subsidy income in a special tax assessment on the subsidy income.
In the international literature, it is accepted that this can place a tax wedge in the labor market, depending on how it is levied. One key determinant of behavioral responses to changes in taxes is the closeness of the relationship between individual contributions and individual benefits in the perception of the payer. But in the South African case of basic grant funding and distribution, such a link would be particularly tenuous if direct taxation were used.
9] The preferences and choices of the poor
There was a notable decline in the benefit population and an increase in employment of former welfare recipients.' (Freeman 2001: 24). What this episode shows is the preference for work in exchange for transfers among the choices of the poor, even though the government first had to break the impasse by changing the eligibility rules. Why does the suggestion of a positive choice for a work contribution, or the institution of 'workfare' over cash benefits, hardly appear in the South African discussion about subsidies?
Another clear dimension of international difference is that opportunities for paid work are far fewer in the local economy for well-rehearsed reasons. In the long run, this will be seen by the producing individuals as free riding by others, as seems likely in countries like the United States where work performance has intrinsic as well as instrumental value. Yet such an unfavorable outcome is not seriously acknowledged in the advocacy literature emerging from local South African discussions.
10] Private philanthropy and state-funded grants
But that the pursuit of egalitarian goals without mutual obligations can elicit feelings of resentment that undermine the spirit of solidarity that is thought to exist in both givers and receivers is a distinct possibility widely explored in the broader literature. Discussion in other countries takes it for granted that the response of the non-profit sector to increases in public contributions of resources, to particular activities such as welfare and charity, may cause a crowding out of private contributions to these activities. Symmetrically, there are documented effects in the opposite direction, when declines in public contributions to a range of causes have occurred.
For example, declines in federal government funding of universities and research institutes in the United States in recent years have led to increased requests, increased private donations, and even the emergence of commercial transactions involving research results (Weisbrod 1998). But whether this policy will be considered an overall success in the long term is difficult to decide, given the political dimensions associated with this issue. This helps explain two phenomena that have been widely observed: first, the much greater importance of the nonprofit sector in the United States than in other countries; and second, the growing importance of non-profit organizations around the world, as population migration and information flows through television and computers have the effect of increasing diversity in country after country' (Weisbrod 1998: 3).
11] Logistical issues in a basic income policy
How they would react to the introduction of a tax-funded universal grant would be extremely relevant to know. Second, an important change for the NGO sphere initiated by the new ANC-led governments in the last decade has been the attempt to centralize the receipt and dispersal of development funds, especially from abroad. The logistical problems affecting the payment of pensions and other supplementary income also appear to be most frequent and difficult in the poorest provinces.
When it comes to payment mechanisms, it is a common assumption that the most advanced cash dispersal technology can be assumed to be in place if a grant scheme is to be introduced. Whether the assumption of lower costs (quoted below) due to the universal – unconditional – nature of such a policy would make the total cost per unit of transferred income lower than a conditional scheme is purely conjectural. They have distribution costs for net payers and they have economic costs because of the disincentives they create... In addition, there are administrative costs.
12] Conclusion: wishing will not make it so
In line with this conception of the problem of poverty, a central theme of this paper has been that an investment perspective is essential for clarity of thought about escape policies by poor individuals. We speculated earlier that it may be the consequence of a concern for the universality of access that is considered an absolute prerequisite for any increase in resource transfers to the poor. As a thought experiment, if a basic income grant were put in place now, and twenty years later, the same percentage of the population was judged in relative and absolute terms to be in poverty, would the program be judged a success.
In accordance with BIG's arguments, the answer should be yes, because there was less hardship and suffering in the intervening period. There, the principle of reciprocity is alive and well on both sides of the transfer relationship between payers and recipients. But no grant protagonists appear to be following through on the research outlined in this article to make informed decisions about the range of issues inherent in the policies they promote.
Dirken 1999 Introduktion i Velfærdskapitalismens virkelige verdener (R. Goodin et al. red.) Cambridge: Cambridge University Press, s. UNDP [United Nations Development Programme] 2003 Human development report 2003: the challenge of sustainable development in South Africa. I To profit or not to profit: the commercial transformation of the nonprofit sector (B. Weisbrod red.).
2000 Review Article: Social Rights and the Social Contract – Political Theory and the New Politics of Welfare.
