In 1998, James Midgley issued a challenge for scholars to provide a systematic description and examination of the South African experience in implementing social development. This article attempts to meet this challenge by examining the progress of developmental welfare or social development in the first ten years of South Africa's transition to democracy under African National Congress (ANC) rule. In this article it is argued that because social development marries social and economic goals, one cannot evaluate developmental welfare or social development without examining shifts in economic policy. Thus, it also examines economic policy transitions from development, to growth, to black economic empowerment. It shows how social security has become the major poverty alleviation measure within the developmental welfare system. It acknowledges that it is tough for developmental welfare to succeed in an economic system that promotes gross income disparities and a widening gap between rich and poor. Social development needs widespread institutional support to succeed and this is unlikely to be forthcoming while there is high unemployment, low economic growth and insufficient foreign investment. However, this state of affairs is unlikely to change as long as the government intervenes in the economy, promotes black economic empowerment and centralises decision-making.