Social policy focuses on taxation, spending, governance and information management for service delivery. It aims to improve human welfare through employment, education, social insurance, health care, housing subsidies and social inclusion programs. Economics is relevant to social policy decisions as it helps policymakers choose the best courses of action by evaluating social outcomes and costs. Qualitative and quantitative information provides the basis for analyzing contexts, developing strategies, and establishing governance arrangements. Sub-national levels also have a role to play through local economic development plans, employment programs, and wider citizen participation to reduce inequalities and promote social inclusion.

1. An Introduction: Social Policy, Economics and Governance
Laurie Joshua
What is social policy?
Social policyisa sub-setof publicpolicy thatfocuseson taxationandspending, governance and
informationmanagement arrangementsforservicedelivery, andmeasuringimpactandoutcomes.
In mosthighincome countriesexpendituresonsocial policyaccount forover25 percent of Gross
DomesticProduct(GDP). In middle income andlow income countriessocial policyexpenditures
account fora smallershare of GDP. Expendituresinsocial policyaim toimprove human welfare and
to meethumanneedsforemployment,education andskills;social insurance, social assistance and
social care services; healthandlongtermcare;housingandutilitysubsidies; andsocial inclusion and
equity whichoperate atlocal,regional,national orsupra-national level.
Is economicsabout more than moneyand finance?
Economicsisabout the choicesandtrade-offsindividualsandgovernments make whentheycannot
meetall demandsandneedsatonce. The fundamental assumptionof economicsisthat the goods
and servicespeople require are scarce andhave costs; decisionstosatisfythese needsrequire trade-
offsinthe face of constraints. However,economicshasverylittle tosayaboutthe typesof things
that bringsatisfactionand economistsrecognise that people gain satisfactionfromthe happiness of
others. So policy choicesinvolve balancingthe well-beingof differentgroupsinsociety.
What doeseconomicsbring to social policydecisions?
Withso many social needs,itisimportant tomake the bestuse of all resources –human,
environmental andfinancialcapital. Economics –particularly whencombinedwithinsightsfrom
demography, sociology,geography, psychology andpolitical science - helpspolicymakerstochoose
the bestcourse of actionby placingvaluesonsocial outcomessothattheycan be comparedwith
the costs. Examplesinclude: education andskills,training,enterprise development interventions
and achievingbetteremploymentoutcomes; designinglongtermsocial care services andreducing
the demandforhospital care;implementingtax allowancesand/orcash-basedsocial protection
programmes toreduce income poverty andsocial inequality;housing/utilitysubsidiesand accessto
shelter;andmeasurestosupport anddiversifyrural economies andlivelihoods.
Whydo we needqualitative and quantitative information to make decisionsaboutgovernance
arrangements?
Effective policydecisionsneedreliable information. Qualitative andquantitative information
providesthe basisforanalysingthe context, developingstrategiesandpoliciesbasedon shared
understandings, preparinglegislation,establishingorganisational arrangementsforgettingthings
done – includingstrengtheningthe strategicandoperational linkagesbetweenpolicydevelopment,
planningandpublicfinancial management;establishingsystemsfor financial and administrative
decentralisation; the waysinwhichservicesare commissionedanddelivered; andthe systemsused
for inspectionandqualityassurance; partnershipswithnon-state actors(forprofitandnot-for-profit
organisations), andmonitoringandevaluation(ex anteandex poste) tohelp withdecisionmaking.
Therefore,we don’tnecessarilyneedmore informationbutitisimportantto have the relevant
information.

2. Is there a role for economics,governance and social policy at sub-national levels?
In systemsof multi-levelgovernance - where poweranddecision-makingisdistributed, negotiated
and exercisedundertriangularprocessesof decentralisation, centralisationandoutsourcing–the
task of respondingtoeconomicchange andtacklingcomplex problemsinafast-changingpolicy
environmentisparamount. Developinglocalised economicdevelopment plansalongside
employmentandsocial economyprogrammes playanimportantrole inthe creationof more and
betterqualityjobs. Thisis achievedthrough more effective policyimplementation, the development
of innovativepractices, widerformsof participation bycitizensandnon-stateactors,stronger
technical andfunctional capacities,integratedstrategiestoreduce inequalities(opportunitiesand
outcomes) and promote social inclusion atlocal levels.
Where have you worked?
I have providedsocio-economicanalysisandtechnical advice on policy, programme,andgovernance
reforms inthe UK, Africa,the Middle East,Central and EasternEurope,SouthEasternEurope,
Central Asia,SouthAsia,andEast Asiaand Pacificregions
Whodo you work for?
Overthe last 20 years have workedforthe World Bank, the UK DepartmentforInternational
Development(UKDFID),The EuropeanCommission (EC),UnitedNationsDevelopmentProgramme
(UNDP),AustrianDevelopmentAgency (ADA),UNICEF,Soros Foundation,The Council of
Europe(CoE),andSave the Children
Work undertaken:
Examples of mywork can be seen inthe linksbelow,includinginputsinto‘Flagship’reports:
WorldBank:
 Employmentandthe JobsCrises inEasternEurope andCentral Asia
 Long TermCare policyandfinance inSeychelles
 China2030 – BuildingaModern,HarmoniousandCreative Society
UK DFID:
 Decentralisationandthe designof aBudgetFormulaforSocial Services inKosovo
UNICEF:
 DecentralisationandEducation inCentral Asia
 Indicatorsforassessingfinance andchildprotection systems inEastAsiaand PacificRegion
Council of Europe:
 The impact of the financial crisesandageingpopulations onpublicfinances
UNDP:
 Social InclusionStrategy 2016-2020 (Albania)
European Commission:
 Pre-accession policyandbudgetplanning (Albania)