World Bank Involvement in World Bank Involvement in Social Welfare System Reform Social Welfare System Reform

and Lessons Learnedand Lessons Learned

Aleksandra PosaracAleksandra Posarac

World BankWorld Bank

Economic growth and investment in Economic growth and investment in human capitalhuman capital

Prosperous, stable societies need healthy, Prosperous, stable societies need healthy, educated, skilled, active citizenseducated, skilled, active citizens

Human capital has long been identified as Human capital has long been identified as one of the key determinants not only of one of the key determinants not only of individual welfare but also overall socio-individual welfare but also overall socio-economic growth and developmenteconomic growth and development

Each single individual counts: Each single individual counts: demographic pressure demographic pressure

Why investing in children?Why investing in children?

Children are human capital Children are human capital

Child development and welfare Child development and welfare outcomes reflect investment in outcomes reflect investment in children. children.

Investment determines future Investment determines future productivity (individual and of society productivity (individual and of society as a whole)as a whole)

Investment in children:Investment in children:generates higher economic returns generates higher economic returns reduces social costs (positive reduces social costs (positive externalities)externalities)contributes to greater social equity contributes to greater social equity and social cohesionand social cohesionincreases efficacy of individual social increases efficacy of individual social sector programssector programscontributes to greater labor force contributes to greater labor force participation of mothers participation of mothers

Human development sectorsHuman development sectors

EducationEducation

HealthHealth

Social protectionSocial protection

Each one is present throughout the Each one is present throughout the life cyclelife cycle

They deliver best results when linked They deliver best results when linked into a range of services (integrated into a range of services (integrated approach)approach)

Social protectionSocial protectionEconomic growth is necessary but not sufficient Economic growth is necessary but not sufficient to ensure that all members of society participate to ensure that all members of society participate in it and benefit from itin it and benefit from it

Social protection is defined as a collection of Social protection is defined as a collection of public measures to improve and/or protect public measures to improve and/or protect human capitalhuman capital

Well-designed and implemented social protection Well-designed and implemented social protection systems and policies contribute to more inclusive systems and policies contribute to more inclusive growth and strengthen cohesion (equity aspects), growth and strengthen cohesion (equity aspects), enhance efficiency and hence are growth-enhance efficiency and hence are growth-promoting by themselves promoting by themselves

Social risk management approach Social risk management approach to social protection (1)to social protection (1)

SRM is a framework used to analyze:SRM is a framework used to analyze:the sources of poverty and vulnerability, the sources of poverty and vulnerability, the ways how societies manages risks, and the ways how societies manages risks, and the relative costs and benefits of various the relative costs and benefits of various

public interventions on household welfare. public interventions on household welfare.

Poverty reflects an unacceptable level of well-Poverty reflects an unacceptable level of well-being, vulnerability captures the exposure to being, vulnerability captures the exposure to uninsured risk leading to a socially unacceptable uninsured risk leading to a socially unacceptable level of well-being currently and in the future level of well-being currently and in the future (vulnerability to poverty but also vulnerability to (vulnerability to poverty but also vulnerability to other risks: death, divorce, crime, substance other risks: death, divorce, crime, substance abuse, violence, etc.) abuse, violence, etc.)

Social risk management approach Social risk management approach to social protection (2)to social protection (2)

Individuals and households face risks Individuals and households face risks (insurable and non-insurable); materialized (insurable and non-insurable); materialized risks become shocks and have negative risks become shocks and have negative impact on well-being (material, physical, impact on well-being (material, physical, emotional, psychological…)emotional, psychological…)

SRM looks at how poor and vulnerable SRM looks at how poor and vulnerable individuals and households can be helped individuals and households can be helped to better manage risks and become less to better manage risks and become less susceptible to damaging welfare losses susceptible to damaging welfare losses

Risk reduction, mitigation and Risk reduction, mitigation and coping (1) coping (1)

SRM comprises actions that occur SRM comprises actions that occur before and after a shock—usually, before and after a shock—usually, but not necessarily an economic onebut not necessarily an economic one—has occurred—has occurredSome reduce the impact that a Some reduce the impact that a future event might have on a future event might have on a household or an individual (household or an individual (ex ante ex ante risk mitigationrisk mitigation) – social insurance ) – social insurance arrangements arrangements

Risk reduction, mitigation and Risk reduction, mitigation and coping (2)coping (2)

Other help households or individuals Other help households or individuals copecope with a shock once it has occurred (with a shock once it has occurred (ex post ex post risk copingrisk coping) – mostly social safety net ) – mostly social safety net interventions;interventions;Finally some Finally some reduce the likelihoodreduce the likelihood of a of a shock occurring (shock occurring (reduction/prevention reduction/prevention of riskof risk): include responsible ): include responsible macroeconomic policies, labor market macroeconomic policies, labor market policies which enhance skills development policies which enhance skills development and job creation, etc.and job creation, etc.Some programs address several risksSome programs address several risks

Risk coping – social safety netsRisk coping – social safety netsThe objective of the SSN is to improve welfare of The objective of the SSN is to improve welfare of chronically and transient poor and vulnerable chronically and transient poor and vulnerable households, including individuals and families households, including individuals and families facing difficult life circumstances facing difficult life circumstances

Mostly risk coping, they also contribute to risk Mostly risk coping, they also contribute to risk mitigation and to some extent risk reductionmitigation and to some extent risk reduction

They enable households to employ or benefit They enable households to employ or benefit from other social risk management strategies, from other social risk management strategies, increasing their chances to become more resilient increasing their chances to become more resilient to risks and shocks and to exit poverty and to risks and shocks and to exit poverty and overcome other life difficulties permanently. overcome other life difficulties permanently.

Social safety net programsSocial safety net programsIncome support: to increase consumption Income support: to increase consumption (cash, in-kind, targeted, sometimes (cash, in-kind, targeted, sometimes conditional, etc.)conditional, etc.)Economic empowerment programs (skills Economic empowerment programs (skills development, education catch-up, income-development, education catch-up, income-generation programs, business start-up, generation programs, business start-up, grants, micro-finance)grants, micro-finance)Social care services to vulnerable Social care services to vulnerable individuals/families (including child welfare individuals/families (including child welfare services)services)

Social care servicesSocial care servicesIntegral part of the safety net systemIntegral part of the safety net systemAddress vulnerabilities and social problems that affect poor and Address vulnerabilities and social problems that affect poor and non-poor population alikenon-poor population alike

The groups in need of social care services are many (children, The groups in need of social care services are many (children, families and women at risk, people with disabilities; families and women at risk, people with disabilities; elderly, etc.) elderly, etc.)

Difficult situations faced by these groups negatively affect human Difficult situations faced by these groups negatively affect human development, labor market participation and productivity, they development, labor market participation and productivity, they lead to deprivation and exclusion, and may induce significant lead to deprivation and exclusion, and may induce significant negative externalities and social cost, if not attended to negative externalities and social cost, if not attended to adequately and in a timely fashionadequately and in a timely fashion

The types of services are many and range from social work and The types of services are many and range from social work and psycho-social counseling, care and rehabilitation for disabled psycho-social counseling, care and rehabilitation for disabled people, at home services for frail elderly, shelters, legal advice, people, at home services for frail elderly, shelters, legal advice, etc. to family substitute services for children without parental etc. to family substitute services for children without parental care. care.

World Bank focus so farWorld Bank focus so farAnalytical work and lending (projects) Analytical work and lending (projects)

HealthHealthEducationEducationSocial protection: social insurance (pensions), Social protection: social insurance (pensions), social assistance, labor market policies social assistance, labor market policies Relatively limited involvement in social care Relatively limited involvement in social care systems and policies development, reform systems and policies development, reform modernization…. (in some countries more than modernization…. (in some countries more than the others)the others)SIFs (initially infrastructure rehabilitation, SIFs (initially infrastructure rehabilitation, increasingly involved in social welfare services increasingly involved in social welfare services (piloting)(piloting)

Involvement in social welfare/care Involvement in social welfare/care systems reform systems reform

Both analytical and investment Both analytical and investment supportsupportEntire ECA Region; South-East Entire ECA Region; South-East Europe: Albania, Serbia, Romania, Europe: Albania, Serbia, Romania, Macedonia, Bulgaria, Turkey, CroatiaMacedonia, Bulgaria, Turkey, CroatiaA combination of institutional A combination of institutional development (legal framework), development (legal framework), capacity building, piloting of new capacity building, piloting of new initiativesinitiatives

Explaining the WB focusExplaining the WB focusBiggest impact on human developmentBiggest impact on human development

(i) the size of affected population (i) the size of affected population (ii) the size of the problem(ii) the size of the problem(iii) amount of resources involved (iii) amount of resources involved

(fiscal attention)(fiscal attention)Increasing poverty was calling for Increasing poverty was calling for programs with immediate impact (cash programs with immediate impact (cash transfers, Bulgaria one of first to introduce transfers, Bulgaria one of first to introduce CCTs)CCTs) Client interest (demand)Client interest (demand)

Why relatively limited involvement Why relatively limited involvement in social care/welfare services?in social care/welfare services?

Although an important individual and social Although an important individual and social welfare and inclusion concern:welfare and inclusion concern:Client demand? There should be a consensus that Client demand? There should be a consensus that a particular intervention is a priority (advocacy is a particular intervention is a priority (advocacy is not our particular strength)not our particular strength)Knowledge gap; challenging design; requires Knowledge gap; challenging design; requires permanently new solutions;permanently new solutions;Complex for implementation with many Complex for implementation with many players/interests involvedplayers/interests involvedLong-term involvement (projects are typically 4-5 Long-term involvement (projects are typically 4-5 years, implies a series of interventions) years, implies a series of interventions) Limited resources (links to public choice and Limited resources (links to public choice and inevitable trade-offs)inevitable trade-offs)

What have we learned (1)?What have we learned (1)?We need to build a constituency within our own We need to build a constituency within our own institutioninstitutionImportance of a champion (or a team of Importance of a champion (or a team of champions) and sustained strong commitment of champions) and sustained strong commitment of key cabinet members (finance, in particular)key cabinet members (finance, in particular)Knowledge, sufficient resources and sufficient Knowledge, sufficient resources and sufficient time: patience and persistencetime: patience and persistencePartnership (at the national, but also international Partnership (at the national, but also international levels: speaking the same language, sharing the levels: speaking the same language, sharing the same vision)same vision)Political economy (no interest shall remain Political economy (no interest shall remain unaddressed)unaddressed)

Lessons learned (2)Lessons learned (2)There is a role for everyone to play (the state, There is a role for everyone to play (the state, service providers, NGOs, CBOs, beneficiaries, service providers, NGOs, CBOs, beneficiaries, etc.) – the importance of a balanced approachetc.) – the importance of a balanced approach Changing laws and rules is necessary, but not Changing laws and rules is necessary, but not sufficient for a change: persistence in sufficient for a change: persistence in implementation and sufficient resourcesimplementation and sufficient resourcesEducation of social workers, case management, Education of social workers, case management, standards, plan for de-institutionalization and standards, plan for de-institutionalization and transformation of institutionstransformation of institutionsPrevention: a range and a continuum of services Prevention: a range and a continuum of services

Bringing in the “missing element”Bringing in the “missing element”Analytical work to underpin interventions: making a case byAnalytical work to underpin interventions: making a case by

assessing costs and benefits (direct and indirect) of child welfare assessing costs and benefits (direct and indirect) of child welfare interventions interventions

Pool of knowledge with examples of good practice;Pool of knowledge with examples of good practice;

Working with clients, raising the child welfare questions persistently and Working with clients, raising the child welfare questions persistently and advocate for changes and improvements (we need partners)advocate for changes and improvements (we need partners)

Bring out clearly the human capital aspect of social welfare services Bring out clearly the human capital aspect of social welfare services

Work with partners (involve them in analytical work and projects Work with partners (involve them in analytical work and projects development and implementation; a challenge of brick, mortar and development and implementation; a challenge of brick, mortar and computers vs. TAcomputers vs. TA

Never give up.Never give up.

Thank you!Thank you!