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

Abstract

This paper argues for developmental social policy and explores options to use social grants transfer instruments (cash, in-kind and vouchers) to achieve localized pro-poor developmental outcomes. Conceptually, this reports draws inspiration from the analytical contributions to redistributive social welfare literature by Amartya Sen, Jean Dreze and Thandika Mkandawire. Amartya Sen and his co-workers argue that the poor and vulnerable lack the capabilities to construct sustainable livelihoods. Peoples' capabilities are their freedoms to live a life that permits and enables them to be healthy, well-educated, wellnourished, adequately clothed and housed, etc. Dreze and Sen, writing extensively about the causes and ways to prevent hunger and famine, noted that spaces of vulnerability are created by changes in food entitlement and command over food systems. In this context, entitlement promotion and entitlement protection need to be introduced, respectively, to secure the long term access to food and the provision of a safety net against shocks. Making a broader and compelling case for 'developmental social policy', Mkandawire (1999) refers to the 'social wage' as an example of how to use social policy to reach longer-term developmental outcomes. The social wage (education, health and targets support for human capital accumulation) lowers the cost of employment and could enable people to be fully employment in decent jobs.