| Despite widespread poverty there is general consensus among policymakers about the preference of targeted welfare transfers over non-targeted grants due to the budgetary implications of the latter. Targeting, however, adds to the administrative complexities of disbursing welfare grants, thus introducing a cost dimension that is as yet largely unexplored. In this paper a series of targeted transfer simulations are run in a general equilibrium model calibrated with a Social Accounting Matrix for South Africa. Deficit financing and tax replacement policies are considered as financing options, assuming a hypothetical budget constraint of R15 billion. The effectiveness of broad targeting and a low per capita transfer value versus narrow targeting and high... |
