Government social protection programme spending and household welfare in Lesotho

Lesotho has notably high levels of poverty and inequality despite a high level of government spending on social protection programmes. We assess the performance of this spending in reducing consumption poverty and inequality, applying benefit incidence and microsimulation methods to 2017/2018 househ...

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Veröffentlicht in:The South African Journal of economics 2023-09, Vol.91 (3), p.375-393
Hauptverfasser: Boko, Joachim, Raju, Dhushyanth, Younger, Stephen D.
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Raju, Dhushyanth
Younger, Stephen D.
description Lesotho has notably high levels of poverty and inequality despite a high level of government spending on social protection programmes. We assess the performance of this spending in reducing consumption poverty and inequality, applying benefit incidence and microsimulation methods to 2017/2018 household survey data. We investigate the distributional effects of actual spending as well as those of a hypothetical alternative in which the spending is targeted through a proxy means test (PMT) formula used by the government for some programmes. We find that government spending on social protection programmes in Lesotho substantially reduces poverty and inequality. For most programmes, the hypothetical alternative of targeting spending to poorer households through the government's PMT formula would have no better distributional effects than current programme spending. The exception is postsecondary education bursaries, which are costly and regressive. Retaining bursaries only for poorer students, and reallocating the outlay this saves to a transfer targeted to poorer households through the government's PMT formula, could reduce poverty and inequality significantly.
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subjects COVERAGE
Economic analysis
EFFECTIVENESS
Government spending
Higher education
Households
INCIDENCE
Inequality
LESOTHO
PENSIONS
Poverty
SAFETY NETS
SIMULATIONS
SOCIAL ASSISTANCE
Social programs
SOCIAL PROTECTION
Welfare
title Government social protection programme spending and household welfare in Lesotho
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