Crowding out or crowding in informal safety nets? : the role of formal social protection targeted at addressing child poverty in South Africa
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Formal social protection in the form of cash transfers has been adopted as one of the strategies for addressing child poverty in South Africa. The Child Support Grant (CSG) established in 1998, is the largest social assistance programme in South Africa in terms of coverage and is targeted at poor children through the primary caregiver. Prior to the grant, the majority of poor children in South Africa lacked access to formal social protection and mostly relied on informal safety nets provided by extended family, neighbours and community members. In view of the critical role that informal safety nets play in the provision of social support to poor children and for the CSG to produce maximum benefits for the recipients, the grant needs to be designed in a way that builds on pre-existing informal safety nets rather than displacing them. The purpose of this thesis is to investigate the nature of the interaction between formal social protection, specifically the CSG, and informal safety nets, and to examine whether the grant displaces, ‘crowds out’ or strengthens, ‘crowds in’ the various forms of informal safety nets. The thesis also provides suggestions on how social protection measures might be designed to crowd in more informal support. The thesis is a literature review based study and involves systematic identification, selection and assessment of relevant texts. In terms of the theoretical framework, the study considers exchange versus altruism as motives for provision of informal support. Findings of the study seem to suggest that the grant had both positive and negative effects on the various forms of informal safety nets, albeit mostly modest effects, which might be due to the low value of the grant. The majority of the reviewed texts reported a slight increase in the social status of the grant recipients due to access to the CSG and some improvements in their capacity to borrow, lend and pool resources within the extended family and community. On the other hand, several texts reported a decrease in cash gifts and also father child support as a result of receiving the grant. A few texts in the review discovered modest positive effects on CSG recipients’ membership in stokvels compared to non-recipients of similar socio-economic status. Modest to no effects were also documented for the grant’s effects on child care and living arrangements. Generally, the findings of the review suggest that the effects of the grant, both positive and negative were quite modest to result in significant crowding out or crowding in of informal safety nets in South Africa. The thesis suggests caregiver support and use of conditionalties as possible designs to crowd in informal safety nets.
Master in International Social Welfare and Health Policy