Social Protection in the post-2015 Development Agenda

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1 Social Protection in the post-2015 Development Agenda armando barrientos and david hulme, brooks world poverty institute, school of environment and development, university of manchester, uk

2 text: Armando Barrientos & David Hulme editor: Gunnel Axelsson Nycander

3 Social Protection in the post-2015 Development Agenda Growth delivers economic opportunity and basic services support productive capacity, but without social protection they are unlikely to reach the poorest. The quotation is taken from the present policy brief. The fight against hunger has long been an important theme of the international work of Church of Sweden. Much of this work involves promoting people s opportunities to support themselves. However, hunger and poverty cannot be eradicated solely by improving people s ability to earn a living. This work needs to be supplemented by methods that directly strengthen the purchasing power of disadvantaged people through various forms of social protection. In its work on social protection Church of Sweden has asked Prof Armando Barrientos and Prof David Hulme, Brooks World Poverty Institute, School of Environment and Development, University of Manchester, UK, to write this policy brief about ways in which social protection can be addressed in the post-2015 Development Agenda. 3

4 Social Protection in the post-2015 Development Agenda In the discussion leading to the review of the Millennium Development Goals (MDGs), it will be important to take account of the recent extension of social protection in the South and its contribution to the reduction of global poverty and vulnerability. Antipoverty programmes, providing direct transfers in cash and in kind to households and individuals, have emerged as a key instrument for delivering the MDGs. The rapid expansion of social protection in the South is making a significant contribution to the reduction of extreme poverty and is largely based on nationally designed programmes. Yet, the discussions leading to the MDGs contained no references to social protection and, until recently, the literature about the MDGs paid very little attention to social protection. 1 Discussions on the post-2015 Development Agenda will find it impossible not to address social protection. The purpose of this brief paper is to help frame this discussion and suggest ways in which social protection can be addressed in the post-2015 review. What is social protection? Uncertainty over terminology can easily prevent effective communication across global stakeholders. It will prove helpful to start by discussing the scope of social protection in the South. Taking an institutional perspective, social protection includes three main components: social insurance which consists of schemes financed by contributions from workers and employers aimed at addressing life course and work contingencies; social assistance which includes tax-financed programmes addressing poverty; and employment programmes, whether active or passive. 2 employment programmes are limited in coverage. Even in Latin America and the Caribbean, where social insurance schemes can be traced back to early 20th century, coverage is restricted to workers in formal employment around one half of the labour force. In Asia and Africa, a very small minority of workers are in formal employment and social insurance is small scale. The recent expansion of social protection in the South has concentrated in the social assistance component, and through a variety of programmes: child and family transfers, social pensions, conditional cash transfers, employment guarantees, and others. 3 In the context of developing countries, stakeholders sometimes conflate humanitarian and emergency assistance with public assistance. The notion of safety nets, as employed by Bretton Woods institutions for example, makes no distinction between short term emergency assistance and social or public assistance. Humanitarian and emergency assistance has an important role to play in addressing the effects of disasters and conflict. But the recent expansion of social protection in the South is focused on establishing and developing longer term institutions needed to eradicate poverty and deprivation. A key point to retain is that Northern researchers and policy makers normally have in mind a broad definition of social protection, one that includes insurance, assistance and employment programmes. In international development policy debates and among Southern researchers and policy makers, social protection is used to describe antipoverty programmes or social assistance. In what follows we use the term in its narrower sense. In developed countries, welfare states have been successful in integrating the provision of basic services, like health and education, with social protection institutions. For the majority of countries in the North, social insurance and service provision are the largest components of welfare states and social assistance can be a relatively small and residual component. In developing countries, social insurance schemes and The growth and diversity of social protection in the Global South The main focus for the rapid expansion of social protection in developing countries has been on providing direct transfers in cash and in kind to families and individuals facing poverty and vulnerability with the objective of facilitating escape from poverty. Estimates suggest that by 2010 between 750 million and 1 billion people in developing countries live in households receiving cash transfers. 4 4

5 Social protection programmes show considerable diversity in developing countries, reflecting local learning about what works in poverty reduction, economic development, institutional capacities, and political processes and priorities. They include categorical transfers for households or individuals in poverty, like social pensions or child and family allowances; transfers combined with asset accumulation, like human development conditional cash transfers, employment guarantees, asset protection transfers; and integrated antipoverty transfers. Mexico s 1997 Progresa/Oportunidades developed out of a concern with the impact of agricultural liberalisation on intergenerational poverty persistence in rural areas. Its design, including transfers to families with children conditional on school attendance and primary health care utilisation, was a reaction to ineffective food subsidies. 5 India s 2005 National Rural Employment Guarantee Scheme, providing 100 days employment on demand to unemployed heads of household, is a response to persistent poverty in rural areas designed around existing state level employment guarantees. 6 South Africa s 1998 Child Support Grant extended social assistance to children in poor households, and was based on the perceived effectiveness of old age transfers. China s 1999 Minimum Living Standards Scheme was initially set up to provide assistance to older and disabled urban residents in poverty, but was swiftly extended to support growing numbers of unemployed workers from recently liberalised state owned enterprises. 7 Political support for the expansion of social protection is grounded on a growing commitment to the gradual realisation of rights and social citizenship, and the pursuit of equity. This is often expressed in very simple terms, as support for vulnerable groups like older people and children, but deeper values underpin these policies. The diversity in social assistance programmes in the South confirms the primacy of national policy and political processes in the emergence of social protection in each country. The growth of social protection programmes has been swift in middle income countries, which is of great importance given the fact that a majority of poor people in the world lives in middle income countries. Progress has been slower in low income countries. To an extent, this is explained by acute constraints in financial resources and implementation capacity in these countries. Political factors are significant too. Limited democratisation and the absence of political competition can make elites unresponsive to the needs of their citizens. In aid dependent countries, elites are able to export poverty reduction to donors, which becomes a task for aid agencies. Successful antipoverty programmes require good technical analysis but also political support. Democratisation and enhanced fiscal space in low income countries, especially with recent economic growth in Africa, could become the drivers for the expansion of social protection. In just a decade, social protection has become widely accepted in developing countries as an essential component of an inclusive development strategy. Growth delivers economic opportunity and basic services support productive capacity, but without social protection they are unlikely to reach the poorest. Social protection has contributed to achieving the MDGs Social protection has contributed to advancing several of the MDGs. The main contribution has been to the Goal 1 Eradicate extreme poverty and hunger. Impact evaluations have demonstrated that well designed and well implemented social protection programmes can make an important contribution to the reduction of global poverty and hunger. 8 In countries where social protection programmes include human development objectives, such as Mexico s Oportunidades or Bangladesh s Challenging the Frontiers of Poverty Reduction Targeting the Ultra Poor, social protection has a direct effect upon other Goals, especially health, education, and gender equality. Mexico s Oportunidades, for example, aims to improve school enrolments and attendance, especially for girls, and health care utilisation among the poorest. The extension of social protection in developing countries can also make an important contribution to the gradual realisation of human rights, through protecting, embedding, and institutionalising the rights of groups facing extreme poverty and vulnerability. 9 Social protection programmes establish rights and responsibilities between citizens and their governments, as in India, Brazil and South Africa. 5

6 Learning from the MDGs A review of the MDGs will generate valuable insights on potential linkages to social protection. The MDGs emphasis on targets reflected the interests of the rich, aid donor countries and especially their politicians and senior public servants who wanted to be able to explain to their publics that aid would not be wasted because best practice management tools would ensure effectiveness. The common sense nature and linearity of this approach made it attractive set targets, monitor achievement and reward staff on the basis of performance. For the aid-financed programs of the DAC members and the UN, this approach was particularly attractive. This results-based management approach is better suited to development projects but might be dysfunctional to the kind of institution building at the core of social protection. The MDGs have been very successful in attracting attention to the need to address extreme poverty at the national and global levels. Goal 1 Target 1, however, focuses on extreme poverty headcount without reference to other, more comprehensive, measures of poverty. The poverty headcount prioritises policies that take households in poverty across the line. The squared poverty gap measure places priority on reducing poverty among the poorest of the poor. The simplicity of Goal 1 Target 1 can give mixed messages. Governments in lowincome countries with very limited resources to combat poverty might be tempted to focus these resources on the moderately poor, at the expense of the extreme poor because this approach maximises the chance of reaching the targets. Social protection in the South is designed to improve consumption and productive capacity among groups in poverty, but transfer levels are generally insufficient to raise households above the poverty line. An important criticism of the way in which the MDGs have worked out as a policy influencing agenda, suggests that over time they have become entrapped within the global UN agencies and their stakeholders. In a sense, setting global norms is a great deal easier, and cheaper, than engaging with a multiplicity of agencies and stakeholders at the national level. The MDGs, this criticism goes, have become part of the global aid industry, with important implications for their effectiveness and credibility. This argument can be helpfully rehearsed in a social protection context. Social protection works at the national level, through national political and policy processes. The greatest breakthroughs in poverty reduction and social protection have been in countries that pursue national strategies rather than the MDGs, countries like China, India, and Brazil. The dominant role of UN agencies in the management of the MDGs ensured that international aid became the sole resource base. The role of international aid in supporting social protection is limited. International aid has a very positive role to play in reducing the large set up costs of social transfer programmes, for example the costs of setting up registration and financial systems, training and recruiting staff, ensuring effective monitoring and evaluation protocols. These costs can be a barrier, especially for low income countries. However, to be sustainable social protection programmes must be domestically financed. Linking social protection and the MDGs requires a stronger focus on national level policy and politics, with UN Agencies and international aid having a supportive role. This would involve paying attention to, and supporting, national social contracts and fiscal pacts, with a focus on institution building, not development projects. It would also require a shift away from North-South financial transfers and towards South-South learning. How best to link social protection to the post-2015 Development Agenda? Social protection is not an outcome, but an instrument to achieving the reduction and eradication of poverty. Social protection can be incorporated within a new Development Agenda as a commitment, as in the text below: A Commitment within post-2015 Development Agenda Recognising the importance of social protection, and especially social assistance, in (i) achieving the MDGs; (ii) reducing the effects of poverty and vulnerability experienced by individual, households, and communities in the South; (iii) facilitating much needed improvements in the productive capacity of households in poverty, especially through investment in the capabilities of children, and (iv) preventing the descent of people into poverty. 6

7 It recommends that the international community steps up its support to developing countries in establishing and extending social protection programmes, policies, and institutions, as exemplified by the Livingstone process in Africa, and the follow up by the Africa Union. Acknowledging that social protection institutions must reflect national policy priorities and values, it recommends that countries develop their own goals, targets and indicators to measure progress and effectiveness of social protection, starting from social assistance. It recommends the establishment of a global social protection fund with the purpose of (i) facilitating the adoption, design, and implementation of effective social assistance programmes in developing countries; (ii) strengthening domestic revenue collection within fiscal pacts. The fund is to be managed by developing countries themselves, supported by the international community. 10 Annex: The Social Protection Floors Initiative The ILO s Social Protection Floors Initiative 11 is a welcomed instrument for raising attention to the need for social protection among international stakeholders. It aims to provide benchmarks for the extension of social protection. The ILO recommendation states the social protection floors should comprise at least the following basic social security guarantees: (a) access to a nationally defined set of goods and services, constituting essential health care, including maternity care, that meets the criteria of availability, accessibility, acceptability and quality; (b) basic income security for children, at least at a nationally defined minimum level, providing access to nutrition, education, care and any other necessary goods and services; (c) basic income security, at least at a nationally defined minimum level, for persons in active age who are unable to earn sufficient income, in particular in cases of sickness, unemployment, maternity and disability; and (d) basic income security, at least at a nationally defined minimum level, for older persons. The proposal for a Commitment within the post-2015 Development Agenda, overlaps with the Social Protection Floors Initiative, but also extends it in several ways: The SPFs initiative follows the ILO standard setting approach to global norms. It has the advantage over the MDGs that the goals are nationally set, not global. But the standards are set in terms of access to inputs not outcomes. The Commitment explicitly acknowledges the diversity of social protection institutions. It also acknowledges that nationally driven processes are evolutionary and supported by social contracts and fiscal pacts. The SPFs initiative lacks any reference to the resources needed to support the recommendations, with the implication that the norms are least effective in the countries where they are most needed. The SPFs initiative is especially unproductive in the low income countries which are unable to implement them. Learning from the MDGs, the Commitment explicitly addresses the resource dimension. The SPFs initiative is underpinned by a Northern perspective on poverty and insecurity, with a strong focus on life course poverty. It is unclear how useful this is in a developing country context. The Commitment pays special attention to the need to improve the productive capacity of groups facing poverty and vulnerability, not just their income or health care. 7

8 Endnotes 1 The World Bank makes the connections at 2 BARRIENTOS, A Tax-financed social security. International Social Security Review, 60, According to the ILO s 2010/11 World Social Security Report, only one-third of countries globally (inhabited by 28 per cent of the global population) have comprehensive social protection systems covering all branches of social security as defined in ILO Convention No Taking into account those who are not economically active, it is estimated that only about 20 per cent of the world s working-age population (and their families) have effective access to comprehensive social protection (p.1) ILO World Social Security Survey 2010/11. Geneva: ILO. 3 HANLON, J., HULME, D. & BARRIENTOS, A Just give money to the poor: The development revolution from the global south, Kumarian Press. 4 BARRIENTOS, A., NIÑO-ZARAZÚA, M. & MAITROT, M Social Assistance in Developing Countries Database Version 5. Manchester: Brooks World Poverty Institute. Available at 5 LEVY, S Progress against Poverty. Sustaining Mexico s Progresa-Oportunidades Program, Washington DC, Brookings Institution Press 6 KHERA, R. (ed.) The Battle for Employment Guarantee, Delhi: Oxford University Press. 7 WANG, M Emerging Urban Poverty and Effects of the Dibao Programme on Alleviating Poverty in China. China & World Economy, 15, See FISZBEIN, A. & SCHADY, N Conditional Cash Transfers. Reducing Present and Future Poverty, Washington DC, The World Bank, HANLON, J., HULME, D. & BARRIENTOS, A Just give money to the poor: The development revolution from the global south, Kumarian Press. 9 On 27 September 2012 the Human Rights Council adopted the Guiding Principles on extreme poverty and human rights, by consensus, in resolution 21/ DE SCHUTTER, O. & SEPÚLVEDA, M Underwriting the Poor. A Global Fund for Social Protection. 11 Recommendations at 8

9 church of sweden international department central church office, se uppsala, sweden phone: +46 (0) plusgiro: bankgiro: art.no: sk13139 production: ineko ab 9

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