Ministry of Labour & Social ServicesMinistry of Labour & Social ServicesNational Social Protection ConferenceNational Social Protection Conference

Meikles Hotel, Harare / 4Meikles Hotel, Harare / 4thth November 2009 November 2009

““Key Issues in Social Protection Policy Key Issues in Social Protection Policy Design”Design”John RookJohn Rook

Regional Hunger & Vulnerability ProgrammeRegional Hunger & Vulnerability Programme

OutlineOutline

National Social Protection

Consultative Forum

Selection & Targeting Dependency

Cost & AffordabilityStakeholders’

Roles

Part1: Social

Protection & Chronic Poverty

Part 2: Key

Policy Design Issues

What is Social

Protection?Why the need for SP?

How SP fights

poverty?

Which SP instruments?

Exit & Graduation

Slide 2/20

OutlineOutline

Addressing Chronic Poverty through Social Protection

Selection & Targeting Dependency

Cost & AffordabilityStakeholders’

Roles

PART 1: Basics

PART 2: Issues

What is Social

Protection?

Why the need for SP?

How SP fights

poverty?

Which SP instruments?

Exit & Graduation

Slide 3/20

• A prolonged and ongoing debate: The stumbling block for many social protection initiatives A sometimes divisive issues – Malawi / Zambia Search for perfection?

• Some important principles: Understood and supported criteria Transparent process Cost v benefit Start and improve

Beneficiary selectionBeneficiary selection

Slide 4/20

5Social protection: types of beneficiariesSocial protection: types of beneficiaries

SOCI

AL P

ROTE

CTIO

NSO

CIAL

PRO

TECT

ION

SOCI

AL P

ROTE

CTIO

NSO

CIAL

PRO

TECT

ION

Soci

al T

rans

fers

Soci

al T

rans

fers

Soci

al T

rans

fers

Soci

al T

rans

fers

All citizens

Vulnerable groups

Employed

Elderly, very young, disabled, chronically ill, orphaned

Able bodied poor

All citizens

All citizens

Poverty based (eg, “poorest 10%):•Eurocentric•Administratively difficult•Least transparent – open to abuse•Difficult to justify where poverty is pervasive – “leapfrogging”•Often circumvented•Suitability – where poverty is not pervasive / data rich environments

Categorical (eg, Old Age Pension):•Popular - widely understood and accepted•Administratively simple•Flexible•But, who to prioritise?•Suitability – Social Welfare Grants

Universal (eg, BIG):•Politically appealing•Expensive•Elements of self-targeting & cost recovery•Suitability - economic growth rather than social protection?

Self targeting (eg Public Works):•Addresses concerns about dependency & perverse incentives•Wage rate issues•Conditionality concerns•Suitability – support to the able- bodied poor

Targeting OptionsTargeting Options

OutlineOutline

Addressing Chronic Poverty through Social Protection

Selection & Targeting Dependency

Cost & AffordabilityStakeholders’

Roles

PART 1: Basics

PART 2: Issues

What is Social

Protection?

Why the need for SP?

How SP fights

poverty?

Which SP instruments?

Exit & Graduation

Slide 7/20

Dependency – the sceptics viewDependency – the sceptics view

The poor are poor because they are lazy Social protection is “welfarist” and thus generates

dependency Social protection can become an addiction

Slide 8/20

Dependency – the other sideDependency – the other side

Always be some level of abuse but much evidence is only anecdotal

For some there is no alternativeno alternative Difference between dependencydependency & perverse incentivesperverse incentives Acquired dependency Acquired dependency can be an issue

• Especially when addressing the needs of the “missing middle” (able bodied poor )

• If social protection is used in isolation when dealing with widespread poverty

Social protection will only foster self-reliance, IFIF:• It is combined with other elements of poverty reductionpoverty reduction• OpportunitiesOpportunities for sustainable livelihood improvement exist• Dependency willwill fill the breach if opportunity opportunity doesn’t plug it first

OutlineOutline

Addressing Chronic Poverty through Social Protection

Selection & Targeting Dependency

Cost & AffordabilityStakeholders’

Roles

PART 1: Basics

PART 2: Issues

What is Social

Protection?

Why the need for SP?

How SP fights

poverty?

Which SP instruments?

Exit & Graduation

Slide 10/20

Graduation & exit strategiesGraduation & exit strategies

Definitions • graduationgraduation concerns individual beneficiaries• Exit strategies Exit strategies concerns programmes/expenditure

Graduation• Not everyone graduates• Only really an issue with the “missing middlemissing middle” category of

beneficiaries• For effective graduationeffective graduation, there must be something to graduate tosomething to graduate to

Exit strategies• In general, social protection is a continuing need continuing need (like health and

education expenditure• But scale and nature of support will change over time

Slide 11/20

OutlineOutline

Addressing Chronic Poverty through Social Protection

Selection & Targeting Dependency

Cost & AffordabilityStakeholders’

Roles

PART 1: Basics

PART 2: Issues

What is Social

Protection?

Why the need for SP?

How SP fights

poverty?

Which SP instruments?

Exit & Graduation

Slide 12/20

Affordability – the sceptics viewAffordability – the sceptics view

Social protection is too costlytoo costly It’s only for rich countriesrich countries Social protection expenditure is like an open open

cheque bookcheque book Poorer countries should spend their scarce

budgets on more productive sectorsproductive sectors

Slide 13/20

Affordability – the other sideAffordability – the other side

Do we know how the current spend current spend is on directly combating poverty?

Is it being used effectivelyeffectively? Social protection expenditure is based on resource resource

availability not needavailability not need – even in rich countries What is the cost of doing nothingcost of doing nothing? Think big, start small start small and expand Investing in social protection today reduces needs reduces needs

tomorrowtomorrow

Slide 14/20

A model of social protection’s economic & A model of social protection’s economic & social impact in South Africasocial impact in South Africa

0%

2%

4%

6%

8%

2004 2006 2008 2010 2012 2014 2016 2018 2020

economic growth social grant spending (% of GDP) poverty gap (% of GDP)

poverty gapeconomic growth

social grant spending

Source: EPRISource: EPRI

Slide 15/20

OutlineOutline

Addressing Chronic Poverty through Social Protection

Selection & Targeting Dependency

Cost & AffordabilityStakeholders’

Roles

PART 1: Basics

PART 2: Issues

What is Social

Protection?

Why the need for SP?

How SP fights

poverty?

Which SP instruments?

Exit & Graduation

Slide 16/20

The key lesson for scaling up . . .

Political willPolitical will and and commitmentcommitment are pre-requisite are pre-requisite

for comprehensive and durable social protectionfor comprehensive and durable social protection

Social protection initiatives which are Social protection initiatives which are home home

growngrown andand nationallynationally driven are much more driven are much more

likely to be adopted and sustainedlikely to be adopted and sustained

Slide 17/20

Roles & responsibilitiesRoles & responsibilitiesStakeholder RoleCentral Government Fiscal Management, Regulation,

Coordination, PolicyMunicipalities / Local Govt ImplementationParliamentarians Representation, Legislation &

oversightCivil Society Lobbying & oversightNGOs Implementation support, M&EDonors Budget support, capacity building Private sector Funding (corp. responsibility),

Implementation (esp. market sector)

Slide 18/20

Some words on “piloting”Some words on “piloting”

Justifications Learn before implementation Testing options Implies a commitment to wider implementation

Cautions

Small scale so don’t tell us much about scaling-up Piloting or experimenting?

Is there a plan to roll out? What happens to beneficiaries at the end of the pilot?

Way Forward

Plethora of experience & evidence from past pilots More prudent / considered approach to piloting:

Provide stronger justification Define exit strategy – what happens to beneficiaries if programme isn’t extended

Learn though implementation rather than through experimentation

SOCIAL SOCIAL PROTECTIONPROTECTION

SOCIAL SOCIAL PROTECTIONPROTECTION

Social Social TransfersTransfers

Social Social TransfersTransfers

Social Social InsuranceInsurance

Social Social InsuranceInsurance

Social Social WelfareWelfare

Social Social WelfareWelfare

Productive Productive Safety NetsSafety Nets

Productive Productive Safety NetsSafety Nets

Targeting OptionsTargeting Options ContributoryContributory Categorical (+ means Categorical (+ means testing?)testing?)

Self-targetingSelf-targeting

Dependency Risk?Dependency Risk? NoNo NoNo YesYes

Graduation?Graduation? Time constrained Time constrained entitlemententitlement

PossiblePossible

Exit Strategy?Exit Strategy? NoNo NoNo PerhapsPerhaps

ConclusionConclusion

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Thank youThank youJohn RookJohn Rook

Regional Hunger & Vulnerability ProgrammeRegional Hunger & Vulnerability Programmejohn@rhvp.orgjohn@rhvp.org

visit www.wahenga.net