Productivity, Sequence and Fiscal Sustainability of Social Policy Seoul Policy Dialogue 1 - 2 November 2012 UNDP Seoul Policy Centre and KDI ILCHEONG YI Research Coordinator Social Policy and Development Programme UNRISD Geneva, Switzerlandwww.unrisd.org
Transformative Social Policy: norms, function, instruments and outcomes 2Source: Jimi Adésínà
2. Sequence of Social Protection Measures Scandinavian model (or Nordic welfare states): Stateness, universalism, and equality
Figure 1. WA: Work Accident, SI : Sickness Insurance, PI: Pension, and UI:Unemployment Insurance , Source: Kangas and Palme (2005)
Figure 3. Coverage andgenerosity of socialinsurance, Nordic countriesand selected OECDcountries (Source: Kangasand Palme (2005))In terms of coverage,Finland, and in terms ofgenerosity, Norway was alaggard.
Figure 4. UnemploymentCompul. insurance coverage among employees under voluntary, compulsory and all (non- targeted) legislation for 18 Non- OECD countries, Source: targeted Carroll 2005) Volun.
Targeting vs. Universalism• Targeted social policy is target-efficient and poverty- reduction-effective?|: Where poverty is widespread, targeting is unnecessary and administratively costly. Such problems as information asymmetries, incentive distortion, moral hazard, arbitrariness, stigmatization, invasive process prevent targeted social policy inefficient and ineffective. It is not politically sustainable either.
Universal Social Protection System Social protection system is a major element of social policy. Social policy addresses issues of production, distribution, redistribution, protection, and reproduction and social protection is placed at the centre of social policy addressing the issues in these areas. Universal social protection is a system guaranteeing universal access to social transfers and services which meets the social need in solidaristic and democratic manner.United NationsResearch Institute for
Historical lessons about universal social protection system1. You can implement a universal social protection scheme even with little resources. Universal social protection is not just the matter of resource.2. No universal social protection programme started with a complete universal coverage from the beginning. It started with either nominal universal programme or occupationally-based scheme and then extended to cover entire population. Universalisation should involve a process towards universal social protection, i.e. transformation.3. The source of political will for universalism is often not from politicians but from civil society which creates a pressure on politicians and a window of opportunity for policy introduction. Civil society often fills the representational gaps (Recent process of ILO’s convention on domestic workers)United NationsResearch Institute for
4. In general, targeting social protection is much more costly,ineffective, and unstable than universalism.5. However, there are two types of targeting approaches; exclusiveand isolated targeting which tends to exclude people (targetingtowards residualism or targeting without universalism) and inclusiveand incorporated targeting which tends to integrate people intopolitical, economic and social life (targeting towards universalism ortargeting within universalism).6. Universalism cannot be realised with sector-specific and one-dimension-focused silo approach.United NationsResearch Institute for
Origins of Social Protection Floor The World Commission on the Social Dimension of Globalisation’s report “A Fair Globalisation: Creating Opportunities for All (2004) “A minimum level of social protection for individuals and families needs to be accepted and undisputed as part of the socio- economic ‘floor’ of the global economy, including adjustment assistance to displaced workers. Donors and financial institutions should contribute to the strengthening of social protection systems in developing countries”.-reduction-effective?|: Where poverty is widespread, targeting is unnecessary and administratively costly. Such problems as information asymmetries, incentive distortion, moral hazard, arbitrariness, stigmatization, invasive process prevent targeted social policy inefficient and ineffective. It is not politically sustainable either.
UN’s response to the current economic crisis- In April 2009, the UN Chief Executives Board (CEB) launched a social protection floor as one of its 9 initiatives to cope with the global crisis.- a core obligation of ensuring the realization of minimum essential levels of rights embodied in human right treaties.- The term Social Protection Floor is a global and coherent social policy concept that promotes nationally defined strategies that protect a minimum level of access to essential services and income security for all in the present economic and financial crisis and beyond.
The social security components of the SPF(2010 version)1. All residents have access to a nationally defined set of essential health care services2. All children have income security, at least at the level of the nationally defined poverty line level, through family/child benefits aimed at facilitating access to nutrition, education and care3. All those in active age groups who are unable to earn sufficient income on the labour markets should enjoy minimum income security through social assistance4. All residents in old age and with disabilities have income security at least at the level of the nationally defined poverty line through pensions for old age and disability
Social Protection Floors (2012 version)• The Social Protection Floor approach promotes access to essential social security transfers and social services in the areas of health, water and sanitation, education, food, housing, life and asset- savings information. It emphasizes the need to implement comprehensive, coherent and coordinated social protection and employment policies to guarantee services and social transfers across the life cycle, paying particular attention to the vulnerable groups.
Seven questions the SPFI do not answer 1. Does “nationally defined set of essential health care services for all ” sufficiently guarantee “health” for all? -- Low quality of essential health service reduces uptake rate and it is wrong to assume that a universal service provided by law is equitable in practice. Guaranteeing essential service should be accompanied with active promotion of policies in the health sector to enhance access to and control quality of care. -- Benefit package and coverage of nationally defined set of essential health care service are getting smaller because of the shrink of public health care provision.
Seven questions the SPFI do not answer 2. Is “income security at the level of the nationally defined poverty line level” sufficient enough to reduce poverty? -- Indonesian case
• A large proportion of population live only Log Annual Pe r Capita Expe nditure , 2008 slightly above the poverty line 100 90 5,9% = below 1USDPPP (2008) 80 Population Density 15,4% = below 70 Nat’l Poverty Line (2008) 60 42,6% = below 50 2USDPPP (2008) 40 30 20 10 0 0 10 20 30 40 50 60 70 80 90 100 Log Per Capita Expenditure Pergeseran X GK NPL GK USD1 GK USD2 Indonesian Case (A. Suryahadi, 2010)
3. What if “family/child benefits aimed at facilitating access to nutrition, education and care” mean a “means tested targeted CCT”? -- Problems of targeted approach (ineffective, costly and inhumane approach). (see the numerous works by UNIRSD)
4. Can social assistance guarantee “minimum income security”? -- Social assistance schemes cannot guarantee “minimum income” without addressing the informal, underemployed and working poor. (LA cases) 5. What kind of social assistance is going to be used for “minimum income security” ? -- universal or targeting? (for instance universal social pension vs. means tested social assistance for the elderly)
6. How is social protection floor financed? – ILO emphasise the domestic resource mobilisation. It has been emphasised since the establishment of the first UN Resolutions on Financing Development in 1950. How can developing countries have a bigger policy space for mobilising and spending resources for social protection? 7. How is social protection floor situated within broad framework of social policy? Social policy approach in development studies is emphasising the productive aspect as well as protection. How is SPF related to production?
Net financial transfers to developing countries(Source: World Economic Situation and Prospects, each year)
Questioning Conventional Wisdoms Suggesting Alternatives With UNRISD WWW.UNRISD.ORG Palais des Nations 1211 Geneva 10 Switzerland