Are social grants a threat to fiscal sustainability?

Abstract

The recent global economic crisis once again demonstrated that macroeconomic shocks can cause large and unforeseen losses that are unevenly distributed across the population. As the social grants and security system is one key dimension of individual and social well-being in South Africa, its effectiveness and equity is essential for improving social welfare. But does this pose a risk to the country's fiscal sustainability, ask Ramos Mabugu and Margaret Chitiga-Mabugu.