Can South Africa afford to become Africa's first welfare state?
This paper assesses the economy-wide impact of implementing and financing a universal or basic income grant (BIG) in South Africa. The various financing scenarios suggested by the proponents of the grant are presented, and these are compared using an applied general equilibrium model for the South A...
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
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International Food Policy Research Institute
2002
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| Acceso en línea: | https://hdl.handle.net/10568/155622 |
| _version_ | 1855518202125090816 |
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| author | Thurlow, James |
| author_browse | Thurlow, James |
| author_facet | Thurlow, James |
| author_sort | Thurlow, James |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper assesses the economy-wide impact of implementing and financing a universal or basic income grant (BIG) in South Africa. The various financing scenarios suggested by the proponents of the grant are presented, and these are compared using an applied general equilibrium model for the South African economy. The results indicate that the required changes in direct and indirect tax rates needed to finance the grant without increasing the government deficit are substantially higher than currently predicted. Furthermore, the alternative of reducing government recurrent expenditure to finance the BIG will undoubtedly undermine other government policy objectives. The paper therefore proposes a shift in the current debate, away from determining which of the individual financing options is preferable, towards an acknowledgement that a 'balanced' approach is likely to provide the only feasible scenario. Furthermore, the impact of the grant on economic growth is found to hinge on its ability to enhance factor productivity. These results suggest that the possibility of South Africa becoming the continent's first welfare state is as likely to rest with the macroeconomic impacts of financing the grant, as with the ability of the grant to address the country's prevailing poverty. This was also published as FCND Discussion Paper 139. |
| format | Artículo preliminar |
| id | CGSpace155622 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2002 |
| publishDateRange | 2002 |
| publishDateSort | 2002 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1556222025-11-06T05:32:04Z Can South Africa afford to become Africa's first welfare state? Thurlow, James poverty finance government purchases economic development subsidies public finance macroeconomics living standards This paper assesses the economy-wide impact of implementing and financing a universal or basic income grant (BIG) in South Africa. The various financing scenarios suggested by the proponents of the grant are presented, and these are compared using an applied general equilibrium model for the South African economy. The results indicate that the required changes in direct and indirect tax rates needed to finance the grant without increasing the government deficit are substantially higher than currently predicted. Furthermore, the alternative of reducing government recurrent expenditure to finance the BIG will undoubtedly undermine other government policy objectives. The paper therefore proposes a shift in the current debate, away from determining which of the individual financing options is preferable, towards an acknowledgement that a 'balanced' approach is likely to provide the only feasible scenario. Furthermore, the impact of the grant on economic growth is found to hinge on its ability to enhance factor productivity. These results suggest that the possibility of South Africa becoming the continent's first welfare state is as likely to rest with the macroeconomic impacts of financing the grant, as with the ability of the grant to address the country's prevailing poverty. This was also published as FCND Discussion Paper 139. 2002 2024-10-24T12:42:21Z 2024-10-24T12:42:21Z Working Paper https://hdl.handle.net/10568/155622 en Open Access application/pdf International Food Policy Research Institute Thurlow, James. 2002. Can South Africa afford to become Africa's first welfare state? TMD Discussion Paper 101. https://hdl.handle.net/10568/155622 |
| spellingShingle | poverty finance government purchases economic development subsidies public finance macroeconomics living standards Thurlow, James Can South Africa afford to become Africa's first welfare state? |
| title | Can South Africa afford to become Africa's first welfare state? |
| title_full | Can South Africa afford to become Africa's first welfare state? |
| title_fullStr | Can South Africa afford to become Africa's first welfare state? |
| title_full_unstemmed | Can South Africa afford to become Africa's first welfare state? |
| title_short | Can South Africa afford to become Africa's first welfare state? |
| title_sort | can south africa afford to become africa s first welfare state |
| topic | poverty finance government purchases economic development subsidies public finance macroeconomics living standards |
| url | https://hdl.handle.net/10568/155622 |
| work_keys_str_mv | AT thurlowjames cansouthafricaaffordtobecomeafricasfirstwelfarestate |