We all know that South Africa is characterized by an unequal distribution of income and wealth. Last week the World Bank released a report that investigated the causes of this inequality. The recommendations are that social spending should be more effective and that grants should be better targeted to help the most vulnerable people. Yet, precisely because the distribution of income is so unequal, the tax base that must pay for the redistribution policies is very small (and shrinking).
* The Economics Minute is supported by the NWU Business School.
