What systems of informal social protection exist amongst poor and marginalised African households in Khayelitsha, Cape Town, and in the rural Eastern Cape? This paper considers the dynamics of informal social protection in post-apartheid migrant networks. It argues that in poor and marginalised households in South Africa, the indirect impacts of social grants cannot be adequately understood by focusing on individual or household decision making. Elaborate and extensive networks of reciprocal exchange link rural and urban households, allowing costs and resources, opportunities and shocks to be shared and redistributed. However, these networks’ entrenched power relations may reinforce the exclusion and vulnerability of some individuals. Additional formal social protection is therefore needed.
This paper provides social context for the debate on social protection and self-employment at the margins of the South African economy. Social protection policy in South Africa currently consists of two principal measures: (1) the extension and broadening of South Africa’s formal social protection system, principally through the roll-out of non-contributory pensions and child grants; (2) increasing employment both within the formal sector and in the so-called ‘second economy’. While there has been broad agreement on the importance of both these directions, their relationship to one another and the trade-offs between them are less clear.
A key question is how access to grants affects economic behaviour. Doubts have been voiced, for example, about the ‘incentives’ created by cash transfers. Interpretation of the data that informs such debate is contested: it depends on underlying assumptions about how individuals and households make decisions, weigh alternatives, and rank preferences. Analysis needs to be guided by an understanding of the social dynamics and relationships that shape poor people’s choices and responses.
Informal exchanges, networks and resource flows play a key role in alleviating the effects of poverty and managing vulnerability. They extend the benefits from both formal employment and the state’s social grants well beyond the individual or household recipient. They are structured, however, by deeply entrenched power relations pivoting on gender, age, status and other markers of exclusion.
- Informal networks enable hybrid livelihood profiles to evolve that bridge rural and urban as well as formal and informal economic activities.
- They depend on elaborate and gendered ‘care chains’ involving not only monetary remittances, but also paid and unpaid care work and household reproductive labour.
- Ties to urban beneficiaries are a vital source of income for rural households in the context of ever-present monetisation and when living even in the countryside requires cash.
- For urban dwellers, the possibility of entitlements from rural households serves as a vital livelihood ‘cushion’, particularly if the rural kin have access to land or are able to care for children while parents seek employment in urban centres.
- Those often on the losing side of networks’ unequal social power relations include: those who are marginalised by patriarchal dialogue over gender roles; those having few resources to bargain with; the old, infirm, or sick; or those who are construed as ‘outsiders’ by the moral communities created through reciprocal exchange because of race, language, or nationality.
- These networks and resource flows are important channels of connectivity in the structure of South African society. For many South Africans, their main or only link to the mainstream economy is replaced or mediated by these informal and often fragile ties.
The existence of arrangements that provide a measure of informal social protection does not eliminate the need for significant, robust formal welfare provision. Informal social protection is, by its very nature, patchy, uneven, and can at times induce highly inequitable results. Significant complementarities exist between informal and formal forms of social protection.
