Legitimate versus Distortionary Freebies

This article argues that based on constitutional provisions and prudent fi scal management principles, freebies can be classifi ed into two broad categories, namely legitimate freebies and distortionary freebies. Legitimate freebies have a signifi cant positive impact on the well-being of vulnerable sections of the population. In contrast, distortionary freebies have an adverse impact on fi scal health, resource utilisation, and resource allocation and can distort economic development.