Can Social Safety Nets Reduce Chronic Poverty?

Abstract

This article highlights distinctions between three determinants of poverty — low labour productivity, vulnerability, and dependency — and two categories of anti–poverty interventions — livelihood promotion and livelihood protection. Within this framework, social safety nets can be conceptualised as publicly funded transfer programmes with ‘consumption smoothing’, rather than ‘mean shifting’, objectives. However the article hypothesises that safety nets can have both ‘protection’ and ‘promotion’ effects. Three southern African case studies confirm that even tiny income transfers are often invested in income–generating activities, education, social networks, or the acquisition of productive assets, suggesting that social safety nets, far from being a merely residual welfarist intervention to alleviate transitory and livelihood shocks, can play a significant role in reducing chronic poverty.