Issues in social protection
ERF-UNICEF Workshop on
Social and Economic Policies on Child Rights
Bangkok, Thailand, 16-20 July 2012
Bachelet Report on Social Protection Floor
• Social protection floor for a fair and inclusive globalization”
Report of Advisory Group chaired by Michelle Bachelet for
ILO and WHO
• Underlying principle: Decent employment and better
conditions of life should not be seen only as potential
positive by-products of income growth, or even as ends in
themselves, but as a means to sustainable growth
• Integral part of broader economic strategy.
• Role of social protection measures in
– cushioning the impact of the crisis among vulnerable
– serving as a macroeconomic stabilizer fuelling demand; and
– enabling people to better overcome poverty and social
exclusion in both developing and developed countries.
What exactly is the social protection floor?
• Integrated set of social policies designed to guarantee
income security and access to essential social services
for all, paying particular attention to vulnerable groups
and protecting and empowering people across the life
• It includes guarantees of:
– basic income security, in the form of various social
transfers (in cash or in kind), such as pensions for the
elderly and persons with disabilities, child benefits, income
support benefits and/or employment guarantees and
services for the unemployed and working poor;
– universal access to essential affordable social services in
the areas of health, water and sanitation, education, food
security, housing, and others defined according to national
Integrated social policies to protect and
empower people across the life cycle
Different from “social safety net” approach
• Those measures were temporary, fragmented and
targeted to the “poor”.
• Shift to rights-based approach to social protection,
with guaranteed basic social rights as a precondition
• Universalise access to benefits in health, pensions,
unemployment, child care and primary education.
• This contributes to reducing poverty, containing
inequality, sustaining equitable economic growth and
encouraging greater empowerment and autonomy for
• Strong gender issues at many levels.
Emergence of a virtuous circle
Evolution of health coverage in some countries
Percentage of the population covered
30 Spain, Greece
South Korea China,
10 Thailand Vietnam
Austria France Germany Greece Portugal Spain China
Korea Thailand Vietnam Rwanda
Can governments in poor countries afford this?
• Many poor countries able to provide at least some
benefits at relatively low levels of GDP – between 1-2
per cent of GDP.
• Amount spent negligible compared to the tax revenues
typically foregone by not effectively collecting revenue
from the wealthy and by not tackling inefficiencies in
many expenditure programmes.
• In the short run social protection programmes
generate positive multiplier effects that increase
output and employment and can create automatic
stabiliser effects during crises.
• In the long run they pay for themselves, by enhancing
the productiveness of the labour force, the resilience
of society and the stability of the polity.
Estimated costs of basic social protection package
(% of GDP in 2010)
in pecent of GDP
Old-age pensions Child benefits Health care Social assistance/employment scheme Administrative costs
Annual expenditure estimates for child benefits and
social pensions in some West African countries
Financing social protection
• Donor-based systems are not sustainable in the medium
or long term, and can create temporary islands of
internationally financed social welfare, with problematic
• Pilots that are entirely donor-driven need to bear this in
mind – it is essential to get governments on board
through advocacy and pressures generated by social and
• Public finance (including taxation policies and benefits
from natural resources etc.) are critical.
• Re-orienting public expenditure can also be important.
• Questions of intra-generational and inter-generational
equity have to be addressed.
Fiscal space strategies matrix, by country
Bolivia Botswana Brazil Costa Rica Lesotho Namibia Thailand
Mineral-based taxation or similar single taxes
X X X
for specific purposes (earmarked taxation)
Increasing general taxation X X X
Social contributions X X X X X X
Budget surpluses X X X
Budget redefinition. Reduction of non-priority
X X X X
spending or decline of military expenditures
Debt and debt service reduction X X X X X X X
Official Development Assistance X
State assets sales X
Efficiency channel X
Constitutional channel X X X X
The need for universal provision
• Issue of appropriate criteria for establishing beneficiaries (e.g.
“poor” and other means-testing).
• Dynamic changes in the reality versus fixed norms for
• Problems with targeting: Type 1 (unfair exclusion) and Type 2
(unjustified inclusion) errors.
• Errors higher in hierarchical and discriminatory contexts.
• High administrative costs of targeting compared to
transparency of universalism (e.g. all children, all old people,
• Economies of scale in universal programmes.
• Harmonisation of different social, labour market and
• Political voice to ensure provision and quality.
What if you have to target?
• Choosing simplest and most transparent criteria; avoiding
many (or even several) criteria.
• Reducing role of layers of bureaucracy and elites in choice of
beneficiaries and criteria for proof
• Making scheme as universal as possible – so sometimes
geographical criteria may be better.
• Self-selection can operate in design of scheme.
• Specific constraints of desired beneficiaries have to be taken
• Transparency, constant monitoring and open grievance
redressal mechanisms are important.
• Technological advances can be used (IT etc), but these are not
“solutions” to what is essentially a problem of socio-economic
and power relations.
Cash transfers – “Just give money to the poor!”
• Latest mantra for poverty alleviation in the international
development community – but these are NOT a silver bullet
for poverty reduction.
• Actually an old idea – Kautilya in 5th century BC; zakat in
Middle Ages, etc.
• Must be in addition to, NOT a substitute for, public
provision. So increased social spending is essential apart from
• Cash versus direct provision of goods and services: the debate
(e.g. food in India).
• Employment programmes are not cash transfers – they are
schemes that gives wages in return for work. Underlying
employment and livelihood strategy of government remains
• Less is more!
• Avoid complicated conditions that require more
administration and more constraints on beneficiaries.
• Improving quantity and quality of public services is
essential if attendance is mandatory.
• Gender issues in many conditionalities (especially
reinforcing traditional gender roles and exploiting unpaid
women’s labour time).
• Sensitivity to vulnerabilities of target groups is required.
• The need to preserve or generate dignity of beneficiaries
is essential in the entire process, especially when delivery
is in the hands of other agents.
• Previous “silver bullet” – now much more skepticism.
• Dual credit structures created – institutional finance for the
rich (and companies) and microcredit for the poor (and
• Private microfinance for profit is beset with problems.
• Seen as way of getting out of problem of lack of collateral, but
other means exist.
• Women’s empowerment is sometimes a positive by-product,
but other social-economic divisions can get accentuated.
• Important to focus on financial inclusion in institutional credit
– through subsidies for particular loans and directed credit.