Overview - Social Protection

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  • Definition of SP : interventions that reduce poverty, vulnerability ( transitory eg shocks) & improve human welfare.SP includes : - Social inssocial assistanceLabor market interventions 3 types SP :Contributory : benefits against contribeg ins against ageing, disability , sickness, death or unemployment - Most provided by gvt- formal sector &Some ins schemes fro risks to livelihoods by # actors than gvt Non contributory social assistance : Transfers programmes for poor & vulnerable to poverty & shocks ( CCT, CT, in kind transfers, fee waivers, utility subsidiesLabour market interventions : protect people in labourmaket or poor able to work.3 types SP arrangements :Informal : family- friends, Function of tradition-culture etc..Semi formal based on voluntary – membership ass, CSOs, trade unions.cty credit groups , burial societies..( eg ROK, CMB), churchesFormal : central local gvt- private actors ( banks/ins comp)- micro ins as complem to SPHybrid pension systems (Chile) 2008 inc poor & informal workers
  • Inadequate :Risk affects everyone in pool ( coviariate risk egnat disaster, ,,)If pool Horizontal ( all poor) more ineffective that “vertical” rich & poor)formal SP can be useful top complement/strengthen ctyarrgteg access to commercial re-insuranceToo big membership : lack admin/managerial capacityExclude :Poorest : too poor to contribute in cash or kind to poolDiscrimination : ethnic, migrant, religion, gender..)May reinforce the poor’s dependent status wo making them resilient to shocks.
  • Internal :Many planned eco broadened public Social ass coverage to previously excluded groups when switching to market eco Liberalization, increased ext competition , pressure on public accounts Korea one of LDCs in 60s : as growth picked up & wealth increased gradually implemented formal sector workers 4 main spporgrammes : Industrial Accident comp Ins(64)Medical Ins (1977); Npension Ins (88) Emplyt Ins 952008 elderly people hv universal basic pension, earned Income tax credit & ins scheme for lt care Lam : democratization late 80s, early 90s generated strong pop demand for SP which helped in design of innovative, domestically designed poverty & vulnerability reduction programmesegBoslaescola/Familia Brazil-Progresaoportunidadesmex- Chile solidario ChiIn a number of cases the provision of universal or SP was embedded in the new Constitutions ( eg Brazil 1998)+ Political will & fed leadership as key driver to broaden coverage, efficiency & areas of coverage of SP with SP high on Fed gvt agenda 2000 & moved increasingly toward integrated programme SP, ext of basic services, food security : break vicious circle of social excl, lack of opp , low incomes poor health.Afr CS, citizens media also drivers of change egSAfr also using rights written in Constitutions. Again Political will critically contributed to SA having one of the most comprehensive SP sys in Sub Sahafr.Succesfulupscaling of SP in Afr countries most time linked to strong political will at fed/central levelTransition from confl;ict to more stable regime opp to impl/broaden SP schemes egLiberia.SRL gvt invested in lan=bour market intervnetions for the young. Also helps build trust.SP key to build more peaceful & equal nation in SA w focus on child grants, Non cont pensions, labor market policies for job
  • Overview - Social Protection

    1. 1. Sequencing, Cost-Efficiency and Fiscal-Sustainability of Social Protection: An Overview Yanchun Zhang/AI. Blateau UNDP Mitigating Vulnerabilities & Promoting Resilient Growth Sequencing, Cost-Efficiency and Fiscal-Sustainability of Social Protection – Policy Dialogue Seoul, Korea, 1 November 2012
    2. 2. OutlineI. MotivationII. SequencingIII. Cost EfficiencyIV. Fiscal Sustainability 2
    3. 3. I. Motivation SP is increasingly recognized for its productive role; Faster economic growth in developing countries makes social protection more affordable; Many questions remain to be answered to link theory to practice. 3
    4. 4. II. Sequencing of SP 4
    5. 5. SP Arrangements Informal SP: family/kinship Semi-formal SP: CSOs, NGOs, mutual aid arrangements Formal SP: public, private, hybrid 5
    6. 6. Informal-Semiformal SP arrangements limitations Inadequate protection : potential collapse; too small payouts May exclude poorest or discriminate certain social groups 6
    7. 7. Triggers Internal triggers: Change of political or economic context within the country  Rapid economic and income growth  Democratization  Post-conflict External triggers  Economic crises  Climate change 7
    8. 8. III. Cost-Efficiency of SP 8
    9. 9. Cost-Benefit Analysis Cost-efficiency vs. cost-effectiveness Direct and indirect costs Direct and indirect benefits Cost benefit analysis 9
    10. 10. Costing Tools ILO (2008): 7 sub-Saharan African countries, 5 Asian countries HelpAge International (2011): 50 low- and middle-income countries WHO (2010): 49 low-income countries Save the Children (2009): 57 developing countries UNICEF and ODI (2009): 5 West African countries 10
    11. 11. SPF Costing Tool and RAP 11
    12. 12. Benefits Brazil’s Bolsa Família South Africa’s grant (including the old-age pension, disability grant and child support grant) India’s Mahatma Gandhi National Rural Employment Guarantee Act 12
    13. 13. IV. Fiscal-Sustainability of SP 13
    14. 14. Fiscal Space and Fiscal Sustainability A fiscally sustainable social protection system is the one that does not undermine a government’s overall fiscal position and underlying trends in the medium- and long- term. Fiscal space is the available budget room that a government can use to spend on a desired purpose 14
    15. 15. A Dynamic and Comprehensive Framework A dynamic approach is needed because many types of social protection expenditures require not only some budgetary room today but also the availability of future budgetary resources. A comprehensive approach is needed because fiscal space created for social protection may immediately or ultimately crowd out spending on other programmes. 15
    16. 16. Practice of Social Protection Fiscal Sustainability Analysis Viet Nam 16
    17. 17. Create Fiscal Space 17
    18. 18. El Salvador 18
    19. 19. Mozambique 19
    20. 20. Thailand 20
    21. 21. Financing options Economic growth leading to Increasing tax revenues Improving revenue collection Reallocating expenditures Increasing spending efficiencies & reducing leakages Introducing innovative financing mechanisms Increased aid & transfers Borrowing Debt restructuring Key factor : political will 21
    22. 22. Conclusion Connecting the dots between vulnerability assessment, costing exercise, fiscal space evaluation and benefits simulation. Embedding SP in a national development strategy  Public support;  Political will;  Public-private partnerships;  Scaling up formal SP while engaging existing schemes. 22

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