Digitalisation and its Impact on Social Protection Programmes Effectiveness: A Case from South Africa

Abstract

The benefit of digitalisation, including the use of information management systems and electronic databases, in improving the effectiveness of social protection programmes is acknowledged by researchers and practitioners. However, concerns about digital- and financial exclusion stemming from increased reliance on digital technologies have also surfaced in recent studies. This study uses official data from South Africa's General Household Survey and the Global Findex database to explore these concerns. The potential gains of expanding social protection programmes through digitalisation are tested with simulations and distinct levels of income shocks. Additionally, two logistic regressions are employed to analyse relevant demographic variables for digital and financial inclusion. In combination with the quantitative approach, qualitative interviews were conducted with social protection experts from the South African Social Security Agency to gain insights into the impact of the digitalisation of social protection programmes. The results suggest that digitalising identification and delivery mechanisms in social protection improves equality through increased income levels. Digital access is associated with education, income, gender, population group, family size, and participation in the formal or informal sector. Financial access is linked to education level and gender. The study also identified perceived opportunities, including enhanced verification and streamlined application processes, which can improve programme effectiveness. However, integration, coordination, limited digital infrastructure, and digital illiteracy challenges may increase both digital- and financial exclusion.