It is common knowledge that the South African Constitution of 1996 was the outcome of a long and arduous process of negotiation and compromise across the spectrum of South African society. The wide-ranging involvement of a diverse group of actors - headlined by the ANC and NP - means that the Constitution should be viewed as the country's most basic social contract. It was a profoundly inclusive process, where the representatives of the nation negotiated with each other while also looking inwards and conceptualising the image of the country they were attempting to create.

The idea of the social contract is a fundamental one, dating back to thinkers such as Thomas Hobbes, John Locke and Jean-Jacques Rousseau. The basic notion is that an individual within a society accepts a set of duties and rules, on the condition that all other members of the society also accept them. The resulting social contract can be expressed in different ways and South Africans are in the fortunate position of owning a document which very clearly stipulates the underlying conditions and rules of the social contract.

When keeping in mind the context of poverty and inequality in South Africa, it is apparent that the Constitution's guidelines on social policy are vitally important. The Bill of Rights clearly specifies that ‘everyone has the right to have access to social security, including, if they are unable to support themselves and their dependents, appropriate social assistance. [It is the duty of the state to] take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation [of this right]'.

These provisions (and others) within the Constitution effectively tells the government to enact legislation and create social policies which are ultimately able to promote the impressive list of rights it sets out. Specifically, the state must follow policies which will assist the poor when they are ‘unable to support themselves'.

It seems as if the government has interpreted these provisions in their narrowest sense during the intervening 16 years. The social policies, and specifically the system of social grants, which have been implemented in South Africa would seem to meet the requirement of providing social assistance to people who are unable to support themselves and their dependents.

Indeed, the government has pursued the expansion of social assistance policies vigorously, to the extent that R105 billion (representing 3.5 percent of GDP) will be spent on them during the 2012/13 financial year. There are approximately 15.3 million South Africans currently receiving grants, compared to 2.5 million in 1998.

The impact of this surge in beneficiaries has been profound, with some economists claiming that South Africa has in fact become the biggest welfare state in the world, with a taxpayer to grant beneficiary ratio of 3 to 1. That means that for every person paying income tax, there are three people receiving grants. It is highly doubtful whether this is a sustainable path and something clearly needs to be done to move people out of poverty. The potential utilitarian value of poverty reduction in South Africa is tremendous.

It is obvious that enabling people to move out of poverty means that the state will save on resources, because they would not need to continue paying grants to those people. But the potential advantages do not end there, because if the income of the currently impoverished were to increase to a taxable level, it would simultaneously expand the tax base and reduce the pressure on existing taxpayers. Reducing poverty thus makes sense beyond the purely moral and ethical levels; it also makes economic sense, as it potentially entails a double saving for the state, freeing it up to spend more in other areas, such as infrastructure development.

But does South Africa have social assistance policies which enable such an environment? I believe that the answer is ‘no'. Before going on to explain this position, it is worth mentioning that the Constitution does not specify precisely what these policies should look like.

Their specific features are at the discretion of the state (indeed, the language is quite vague, referring only to ‘appropriate social assistance'), which leaves the government with significant leeway. Getting back to the question of the environment created by social policy, I fear that the state is not enabling impoverished people to become economically mobile, because they fundamentally view them as passive subjects.

This is not an unfair interpretation. It is easy to draw such a conclusion when looking at the system of social grants. Let us take the Child Support Grant as an example, because it accounts for 10.3 million of the 15.3 million grant recipients: a single person with an asset base of less than R31 200, or a married people with an asset base of less than R62 400, are entitled to a grant of R260 per month per child. The grants are paid at designated pay points and banks. But how does one infer from these regulations that the system is essentially passive?

It is easy to make that inference when comparing the South African system to others around the world. We tend to get so caught up in our own (admittedly tremendous) challenges that we often forget that we are not unique in facing them. There are literally hundreds of countries around the world with Cash Transfer Programmes (CTP) which aim to reduce poverty and inequality.

The key is that many of the most effective ones not only include cash grants, but also have conditions attached to them. By 2008 there were conditional CTPs in at least 27 countries, compared to just 3 in 1997. The rapid expansion of these programmes can in part be attributed to their spectacular success in cases like Brazil (which, along with South Africa, is considered to be one of the most unequal countries in the world), where studies have found the Bolsa Família (Family Grant) conditional CTP has played a central role in lowering the poverty rate (defined as earning less than half the minimum wage per month) from 35 percent in 2001 to 21 percent by 2009.

The Gini Index (which measures inequality, with a figure of 100 representing perfect inequality and 0 representing perfect equality) also fell from 59 in 2001 to 54 by 2009. To put it in somewhat more perceptible terms: Brazil managed to lift 27 million people out of absolute poverty in a mere eight years. Recent research by the United Nations Development Programme has found that about 21 percent of this reduction can be attributed directly to the effects of the Bolsa Família. Put very crudely; the Bolsa Família lifted 5.7 million people out of poverty in only eight years.

Whereas the Child Support Grant in South Africa is unconditional, families which receive the Bolsa Família are required to meet the following simple conditions: children need to be in enrolled in school and achieve an 85 percent attendance rate, pregnant women need to attend prenatal classes and families must ensure that their children are vaccinated and receive regular medical check-ups according to an official schedule. If these conditions are not met, the grants are eventually suspended.

There are currently a total of 11 million families, or 45 million people (almost the size of South Africa's entire population) out of a total population of 194 million receiving these grants. The results have been impressive. Without going into too much detail, the effect of the conditions has been to increase the investment that Brazilian parents make in the human capital of their children.

This has profound implications for poverty reduction, especially in its ability to break the inter-generational poverty trap. Children who are healthier and have higher levels of education have greater chances of escaping poverty. In addition to these long-term goals, the programme reduces the immediate poverty of families in a comparable way to South African social grants, because similar cash transfers are made to beneficiaries.

This means that the programme reduces short-term poverty by giving people money to buy the basic necessities, while also potentially reducing long-term poverty through the increased investment in human capital.

Let us now return to the question of how the South African system of social grants implies that the government regards the poor to be passive subjects. The comparison to the Brazilian system is indicative of a much deeper, more fundamental difference between the two governments' approaches to poverty and inequality reduction.

In the words of Brazilian President Dilma Rousseff: ‘the poor [in Brazil] want opportunities, not favours'. This belief finds clear expression in the Bolsa Família programme, where citizens are regarded as being capable of agency and resolving their own problems. It is a system of co-responsibilities, where the state is a partner to the poor, not a nanny. But a brief caveat is applicable at this stage: the programme is a clear case of demand-side economics and it is obvious that increasing demand for these services is not sufficient to reduce poverty.

Supply-side measures are also required to ensure that the services (such as education and healthcare) are of a high standard. Nevertheless, the broader point is actually that it sends an empowering message to the poor that motivates them to take greater responsibility for improving their own situations and investing in the future of their children.

In contrast, the state in South Africa has become a nanny to the poor. The evidence suggests that it is more focused on providing ‘favours' to the poor, instead of Rousseff's ‘opportunities'. Dr. Mamphela Ramphele alluded to this in a recent article when she said that South Africans are ‘gullible and subservient subjects' and that they needed to undertake a journey to become ‘citizens'.

I am afraid that one of the reasons for South Africans being subjects is because the state inherently regards them as such. The system of social grants - which directly affects almost a third of the country's population and indirectly affects about 4 million taxpayers - is one of the root causes of this situation.

It is indeed time for South Africans to become active citizens who partner with the state and assume co-responsibilities. Despite the admirable intentions of the state in meeting the requirements of our social contract, as expressed in the Bill of Rights of the Constitution, the system has quickly become horribly disfigured.

This is because the state chose to interpret the provisions of our social contract in a way which relegates citizens to subjects. The irony is that a programme based on conditions similar to the Bolsa Família would automatically promote linkages to education and healthcare, which are two other central elements of the Bill of Rights.

Thus, instead of designing a system with the potential to simultaneously reduce the dependence on grants and pressure on the tax base, and instead of designing a system which not only addresses one provision of the Bill of Rights (the requirement of social assistance) but potentially links to two others as well (education and healthcare), the South African government has instead implemented a programme which runs the duel risk of dooming the next generation to ever-deepening poverty while also imposing unsustainably high demands on state finances.

*Leon Schreiber is a South African PhD student in Political Science at the Freie Universität Berlin in Germany. The views expressed are his own. This article first appeared on his blog at http://theschreiberei.wordpress.com/. He can be followed on Twitter here.

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