4. T here a re a lternatives! Lessons f rom w elfare a nd 

developmental states

“A fierce new world has been born - full of shaken premises, complicated

contradictions, serious fractures, severe backlash, broken promises and uncertain

outcomes for the world’s peoples.”1

Lesson o ne:  It is possible to achieve high rates of social progress in relatively short periods of timeFrom 1950-1980, the world experienced an unprecedented period of social progress over a relatively short period of time.

● In1990,theUnitedNationsDevelopmentProgramme(UNDP)publisheditsfirstHumanDevelopmentReport(HDR),whichreviewedhumandevelopmentoverthepreviousthreedecadesfrom1960to1990.The1990HDRnotedthatwhilelevelsofdeprivationwithinand between countries were still unacceptably high, the progress made between 1960 and 1985wasunprecedentedinmanypoorcountries.However,progressmadeinthe60sand70s stalled during the 1980s.

● Similarly, in a series of Scorecards on Development2 (2001, 2005 and 2017), the Centre forEconomicPolicyResearch(CEPR),identifiedsharplylowerratesofeconomicgrowthand reduced progress on social indicators in the majority of low- and middle-income countriesintheperiodof1980-2000comparedto1960-1980.The2005Scorecardfindsgrowth rates in GDP, health outcomes and progress in education were markedly better in 1960-1980 compared to those in 1980-2000, with China and India being the notable exceptions.3 The report argues that China and India’s exceptional growth rates are due to the gradual ways in which both countries liberalised, opening up sectors to global trade only when they were ready to compete.

● Lookingevenfurtherbackintotime,theHistoricalIndexonHumanDevelopment(mid19thC to 1970) observes that “although the gap between the OECD [Organisation for Economic Co-operation and Development] and the Rest [of the world] widened in absolute terms, an incomplete catching up took place across the board between 1913 and 1970.”

● The 2018 OECD report A broken social elevator: income inequality and social mobility4 examined intergenerational and individual social mobility in OECD and emerging economies. The report notes that in OECD countries upward mobility for people with less educated parents tended to increase for people born between 1955 and 1975, then stagnated for those born after 1975. Since the 1990s the trend in social mobility has been negative in that it has become less likely for people at the bottom to move up (sticky floors)andmorelikelyforpeopleatthetoptoremainthere(stickyceilings).

1. Sen G. & Durano M. (Eds) 2014 The Remaking of Social Contracts: Feminists in a Fierce New World. DAWN, Zed Books London 2014. cf Summa-risedVersion:https://www.dawnnet.org/sites/default/files/articles/20151105social_contracts_abridged_eng.pdf

2. CEPR Scorecard Series http://cepr.net/publications/ceprs-scorecard-series/ 3. Weisbrot M., Baker D. & Rosnik D. 2005 Scorecard on Development 25 Years of Diminished Progress http://cepr.net/documents/publications/devel-

opment_2005_09.pdfCenterforEconomicandPolicyResearch4. OECD2018.ABrokenSocialElevator?HowtoPromoteSocialMobilityhttps://read.oecd-ilibrary.org/social-issues-migration-health/broken-eleva-

tor-how-to-promote-social-mobility_9789264301085-en

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Lesson Two: State intervention is needed to reduce poverty and inequality, create employment and upscale innovation to address development challenges Whereas welfare states tend to refer to countries in the North with large social security systems (i.e.20%ofbudgetexpenditure)thetermdevelopmentalstatewasfirstappliedtothefour“EastAsian Tigers” (Korea, Japan, Singapore, Taiwan) who achieved both rapid social and economic progress during the 1960s and 70s, but was an almost universal model in the Global South (though often only partially successful). The term now refers to a development model in which the State drives development as the lead actor in economic and social development through a large network of public institutions, agencies and a capable civil service. Some countries are also referred to as welfare developmental states.

Drawing lessons from seventy years of development policy analysis, the UN World Economic and Social Survey 2017 emphasises that “development planning, state capacity, coordination across various policy areas and actors are crucial to achieving development.”5 Numerous UN agencies and civil society organisations have equally emphasised the need to bring back long term and proactive state involvement and ramped up public investment in order to address the youth crisis, entrenched extreme and working poverty, as well as to build resilience against climate change.

While welfare states are characterised by their social systems, post-independence developmental states also had very strong social policies given the dismal colonial legacy of human under-development. Indeed economic policies would also have strong social development objectives in order to ‘catch up’ with the West. Social protection is viewed as a minimum which should be strengthened by policies in other areas.

What were some of the achievements of public enterprises?6

• Setupindustriesinstrategicandcoresectors.• Providedbasicinfrastructurefacilitiesataffordablecosts.• Promotedbalancedregionaldevelopmentbysettingupindustriesinmarginalisedareas.• Restrictedthegrowthofprivatemonopoliesandprotectedconsumersagainstprivatemonopolies.• Generatedlargescaleemploymentopportunitiesandcontributedtothereductionin

unemployment.• Servedasamodelemployer,providinggoodremuneration,jobsecurityandwelfarefacilitiesto

employees.• Exportedgoodsandservicestherebyearningvaluableforeignexchange.• Setupindustrieswithafocusonimportsubstitutiontoconserveforeignexchangeresourcesand

achieveself-sufficiency.• Tookoversickindustrialunits,restructuredthemandconvertedthemintoviableunits.• Achievedprofitablegrowthandcontributedtothenationalexchequer.• Setupanetworkoffinancialinstitutionswhichhavefinancedthegrowingneedsoftheindustry.• Promotedthegrowthofvillage,cottage,traditionalandsmall-scaleenterprisesbyproviding

advice,consultancy,financeandmarketingfacilities.

5. World Economic and Social Survey 20176. Extract from Accountlearning.com (undated) Online Learning Website https://accountlearning.com/achievements-of-public-enterprises/

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Inits2018reportontheWorldSocialSituation7,theUNemphasisesthat“evenincountrieswherecomprehensiverights-basedsocialprotectionsystemsreducesocialdivides,theyalonecannottackleallthesymptomsanddriversofexclusion.[…]Measurestopromoteaccesstoland,creditandotherproductiveresources,toensureequalaccesstohousingandtofosterfairinheritancerightsarealsocriticalforsocialinclusion.”

Belowwereviewaselectionofpoliciestypicalofwelfareanddevelopmentalstateswhichshowhowsocialprotectioncansupportyouthdevelopment.

Agrarian reform, food security and land redistribution remain a cornerstone of social and economic development

TheFoodandAgricultureOrganisation(FAO)hasnotedthatagricultureisnotreachingitsfullpotentialtocreatedecentjobsforyoungpeople,particularlyyoungruralwomenandmenwhomakeuponefifthofthepopulationindevelopingandemergingeconomies.Thedrudgeryandpoorremunerationassociatedwithlow-productivityfamilyfarmingdissuadeyoungpeoplefromagricultureandmakethemmorelikelytomigratetourbanareas.8

Engaging proactive, inclusive industrial policies for sustainability, economic diversification and job creation

Importsubstitutionandindustrialpolicyresultedinthecreationofsomegroundbreakingstateownedcorporations.Incontrasttheneoliberalmodelofindustrialisationreliesonforeigndirectinvestmentmainlyusingprofitmaximising/costexternalisingtransnationalcorporations.Thereisrenewedinterestinindustrialpolicies,especiallyasnewtechnologiesoffernewopportunitiesforindustrialisation.However,statesneedtodevelopstrategiesforinclusiveindustrialdevelopmentwhichbenefitratherthanexploitorexcludeyoungpeople.Thisisdefinedas‘industrialisationthatenablesinclusivegrowthandthatleadstoimprovementsinthelevelanddistributionofnon-monetarydimensionsofdevelopment’9.

Increased public investment in secondary and tertiary education

AccordingtoUNESCO,37%youngpeopleofuppersecondaryschoolagearenotinschool10.Whenitcomestohighereducation,thenumberofstudentsenrollingworldwidehasmorethandoubledfrom100millionin2000to207millionin2014.Twenty-firstcenturydevelopmentchallengessuchasclimatechangeandtheSustainableDevelopmentGoalspointtotheneedforskillsinalargenumberofnewareas:government’s’roleistocoordinateanddirectskillsinvestmentstowardsthoseneeds.11Highereducationisapublicgoodyettertiaryeducationisfreeinonly40countriesaccordingtoUNESCO12withacontinuedtrendinthecommoditisationofhighereducation.Vocationaleducationhasalsobeenneglectedandrenewedpublicinvestmentisbadlyneededinthisarea.Inallformsoftertiaryeducation,therisingdemand,reducedpublicinvestmentandprivatisationhaveresultedinstudentindebtednesssurpassinghundredsofbillionsofdollars.13

7. UNDESA 2018. Report on the World Social Situation 2018: Promoting Inclusion through Social Protection https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2018/07/1-1.pdf

8. FAO Youth Present and Future of Agriculture http://www.fao.org/3/a-c0390e.pdf 9. UNIDO 2015. Industrialisation, Innovation, Inclusion:Working Paper 15/25 https://www.unido.org/api/opentext/documents/download/9928042/

unido-file-992804210. UNESCO 2016. Global Education Monitoring Report. Education for People and the Planet: Creating Sustainable Futures for All11. SeeIAU’sGlobalSurveyofHigherEducationandResearchforSustainableDevelopment2016:HigherEducationPavingtheWaytoSustainable

Development-AGlobalPerspectivehttp://iau-hesd.net/sites/default/files/documents/higher-education-paving-the-way-to-sd-iau-2017.pdf12. UNESCOIIEP2017.SixWaystoEnsureHigherEducationLeavesNo-oneBehindhttps://unesdoc.unesco.org/ark:/48223/pf000024786213. Chamie J. 2017 Student Debt Rising Worldwide. YaleGlobal Online 18 May 2017 https://yaleglobal.yale.edu/content/student-debt-rising-worldwide

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Public financing is more effective to finance development than micro-finance or private sector investment

Financingfordevelopmentisamajorconcernwhichcouldbeaddressedbyresurrectingstateownedbanks.Manycountriesprivatisedtheirstate-ownedbanksunderstructuraladjustmentprogrammes,buttherearestillalargenumberofstate-ownedbanksthatremaineffectiveandprofitable.14The2007crisisdemonstratedtheweaknessoftheprivatebankingsystemintheabsenceofstateregulation.Meanwhile,thedevelopmentalimpactsoffinancialinclusioninitiativessuchasmicrofinancehavehadlimitedsuccessinimprovinghouseholdwelfareandinsomecasesbeencatastrophic.15

Theargumentforcontinuedinvolvementandrelevanceofstate-ownedbanksindevelopmentissupportedbytheperformanceofanumberofexistingstate-ownedbankinginAsia,Africa,EuropeandLatinAmerica:“thereisnohopeofcreatingastructuralalternativetoneoliberalismwithoutfirstassertingdemocraticcontroloversociety’smoneyresources.Atthisparticularconjuncture,democratizedstate-ownedbanksofferthemostviablealternative.16”

PublicsectoremploymentforyoungpeoplebuildsskillsandstrengthensthespiritofpublicserviceTheStatecansupportemploymentcreationthroughactivelabourmarketpoliciessuchaspublicworksprogrammesandinvestmentinlabourintensivesectors.Inaddition,governmentsthemselvesareoneofthelargestemployers:in1998theworldshareofpublicemploymentwasabout30%.

Publicsectoremploymenthasbeenespeciallyimportantforwomen,whooccupyalargenumberofjobsinthepublicsector.AnOECDsurveyoftheaspirationsofyoungpeople(aged19-29)indevelopingcountriesconfirmedthatasignificantpercentageofyoungpeoplewishtoworkinthepublicservice-rangingfromover50%inAfricatoathirdinLatinAmerica.Thisoptionisclosedtomanyasaresultofausterity.

Theseareafewexamplesofwaysinwhichinterventionistpublicpoliciescanandhaveaddressedsocialneedsandeconomicdevelopment.Otherpolicyareassuchashousingcanalsobeincluded.Underneoliberalfreemarketpolicies,younggenerationsarehostagestofortune,inthesensethattheymustdependonfamilynetworks,theprivatesectororphilanthropyratherthantheStateandsolidaritytohaveasecure,safeandhealthytransitiontoadulthood.

Lesson T hree: Effective systems of social solidarity need a capable state and equitable social contractsUnderneoliberalism,thecapacityofStatestoaddressdevelopment,respondtocrisesandreachlargeswathesofthepopulationhascontinuouslybeenerodedasaresultofdisinvestmentinpublicinstitutions.

Ironically,whilethereismuchtalkaboutfailedandfragilestates,the“smallstate”policiesadvocatedbyinternationalfinancialinstitutions(IFIs)exacerbatethatsituation.Buildingstatecapacityispartoftheprojecttocombatpovertyandinequality,andmanysuccessfulstatesdidnotstartwithlargebureaucraciesbutdidbuildthem17.

TheUnitedNationsResearchinstituteforSocialDevelopment(UNRISD)suggeststhatbuildingstatecapacityrequiresafocusonthreedimensions:1)craftingeffectivepoliticalcapacity;2)mobilisingresourcesfordevelopmentobjectivesand3)allocatingresourcestoproductiveandwelfareenhancingsectorsandenforcingrulesgoverningtheiruse.18

14. Morais T. State-Owned Banks and Development: Dispelling Mainstream Myths https://core.ac.uk/download/pdf/42550199.pdf 15. ChangH-J.2002Theroleofsocialpoliciesindevelopment:SomeTheoreticalReflectionsandLessonsfromEastAsia.UNRISD,Genevahttp://un-

risd.org/80256B3C005BCCF9/(httpAuxPages)/D7A4D3693E1D5EBDC1256C77003A0FBE/$file/chanlong.pdf16. Idem17. UNRISD 2010 Combating Poverty and Inequality: Structural Change, Social Policy and Politics 18. Idem

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Ofcourse,thepost-colonialstatehasalsobeenhighlyproblematic.Theideaofrebuildingsocialcontracts,aspresentedbytheSouthfeministnetworkDAWN(DevelopmentAlternativeswithWomenforaNewEra)callsforarethinkofthefoundationsforstate-citizenrelationships.Socialcontractsarecollectiveagreementsthatare“builtonandimbuedwithpower;[they]maybeimposedfromabove,foughtoverfrombelow,andalwaysholdthepotentialforchange.”

Aseriouschallengetorebuildingsocialcontractsistheextremepowerandwealthheldbytransnationalcorporations.Ofthe100richesteconomicentities,69arecorporations,andtheremainingarecountries.Thefigurerisesto157oftherichest200economicentitiesarecorporations,against43countries.19Thisextremeconcentrationofwealthgivestransnationalcorporationspowertodictatepublicpoliciestogovernments,whetherit’sclimatepolicy,taxpolicy,education,healthoranyothersocialpolicy.Theresponsefromcivilsocietyorganisationshasbeentocampaignforcooperationbetweenstatesattheinternationallevel,notablyforexamplethroughaBindingTreatyonBusinessandHumanRights,currentlybeingnegotiatedintheHumanRightsCouncil.20

Lesson f our: Development is a process of trial and error – governments need fiscal and policy space, but should also create an open, participatory policy environment in which young people can be actors in shaping their futuresStudiesofdevelopmentalandwelfarestateshaveshownthattherehavebeenfailuresaswellassuccesses.Trialanderrorwerecommon,butthispointstotheneedforpolicyspaceforgovernmentstoact,whichisimpossiblewhentheyoperateundercurrentpolicyrestrictionsimposedbytradeagreements,internationalfinancialinstitutions,donorsortransnationalinvestors.

AccordingtotheUnitedNationsConferenceonTradeandDevelopment(UNCTAD)‘policyspace’refersto:“thefreedomandabilityofgovernmentstoidentifyandpursuethemostappropriatemixofeconomicandsocialpoliciestoachieveequitableandsustainabledevelopmentintheirownnationalcontexts”.21TheeraofglobalisationandtradeliberalisationundertheWorldTradeOrganisationUruguayRoundAgreements,andneoliberalaid/loanconditionalitiestoprivatiseandderegulateeconomieshavereducedthespaceofstatesforsocialpolicy.Furthermore,thesepolicieshavedelinkedeconomicpoliciesfromsocialobjectives22,unlikedevelopmentandwelfarestatemodels.Thishashappenedforexamplethroughthelossofjobsthroughde-industrialisationandopeninguptocompetition,pressurestodismantlelabourrightstoattractinvestors,throughcutsinsocialspendingasaresultoftheinsistenceoncostrecovery.

Therearefeaturesofsomedevelopmentalstates,suchastheirtopdown,authoritarianand/orpaternalisticapproachesthatareunacceptable.Somegovernmentsthatsucceededinliftinghugepartsoftheirpopulationsoutofpovertyanddevelopingnewindustriescouldalsopracticerepressiveandexclusionarypoliciestowardsracial,religiousandindigenousminorities,womenandLGBTQIA+people.Thehetero-patriarchalhallmarksofmanydevelopmentalstates—authoritarian,queerphobic,misogynistandpatronising—arenotalternativestoneoliberalstates,manyofwhomaremarkedbythesamecharacteristics.Newandoldmovementsareincreasinglychallengedtobeintersectional,ensuringthatalternativesarefeminist,just,sustainable,democraticandinclusive.

19. Global Justice Now 2017 https://inequality.org/research/richest-entities-corporations-governments/ 20. BusinessandHumanRightsResourceCentre.BindingTreatyonHumanRightshttps://www.business-humanrights.org/en/binding-treaty21. UNCTAD 2014. Trade and Development Report: Global Governance and Policy Space for Development https://unctad.org/en/PublicationsLibrary/

tdr2014_en.pdf22. UNRISD 2016. Policy Innovations for Transformative Change: Implementing the 2030 Agenda for Sustainable Development. UNRISD Flagship Re-

port 2016.

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ConclusionDevelopmentalandwelfarestatesarosefromthecrisesofaglobalGreatDepression,worldwars,largescalefamineandepidemicsandlarge-scalehumanrightsabuses,includinggenocides,andcolonialism.Theinternationalhumanrightsframeworkwasdesignedtoensurethatthiscanneverhappenagain.Theroleofstatesindeliveringonthoserightswasandstillmustbeacentralobligation,andwecanlearnfromthewaysinwhichvariouspoliticalsystemssoughttodeliveronthoserights.Learningfrompastmistakesandsuccessesovergenerationsisimportanttoinformthewaysinwhichwechoosetoshapenewfutures.

Robustandeffectivesocialsystemsrequireinstitutionalcapacityofbothnationalandlocalstateagencies.Thisincludesensuringthatinstitutionshavethenecessaryfinancialandhumanresourcestodeliverthoseservices.

Youngpeopleshouldnotsimplybeseenasbeneficiariesindeliveringservices.Governmentsshouldopenopportunitiesforyouthtoparticipateinthedeliveryofservicesthroughpublicsectoremploymentthatensuresdecentwork,lifelongskillsdevelopmentandprofessionalmobilitythatnurturespublicleadersofthehigheststandard.Thedowngradingofvitalpublicsectorworkersthroughlowpayandbadworkingconditions,andthelackofinvestmentinbuildingtechnicalknowledgeandexpertiseinthepublicsectorcanonlyservetodisenfranchiseyouthwhomakeupthemajorityoftheworld,andthusweakensocietiesratherthanstrengthenthem.

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This is an excerpt from ActionAid International’s draft report Youth, Gender and SocialProtection: Rebuilding Systems for the 21st Century (2018)

Authored by Nancy Kachingwe and Kudzai Makombe

Commissioned byActionAid International - Youth Working Group

Design and layout by: The Media ChilliArtwork by: Donovan Ward