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v PATHWAYS’ PERSPECTIVES ON SOCIAL POLICY IN INTERNATIONAL DEVELOPMENT WHAT HAS THE COVID-19 CRISIS TAUGHT US ABOUT SOCIAL PROTECTION? BY STEPHEN KIDD AND DAISY SIBUN ISSUE NO. 29 APRIL 2020 WHAT HAS THE COVID-19 CRISIS TAUGHT US ISSUE NO. 29 ABOUT SOCIAL PROTECTION? APRIL 2020 I t is astonishing how rapidly the world is per cent of their income; statutory being transformed. Only two months ago, government-financed sick pay has been most of us were still going about our normal introduced for those experiencing Covid-19 daily lives. Today, the world is facing a (previously, it had to be paid by employers); grave health and economic crisis and many while the government has offered to of us are in lockdown, unable to socialise guarantee 80 per cent of loans taken by with friends and family. Jobs are being lost, small and medium enterprises. None of us salaries are being cut while the would have believed that our conservative self-employed and informal economy government – which has historically workers are experiencing catastrophic losses demonised welfare – would now take this in income. Those most at risk are older approach, which is very welcome (although people and people with underlying health there are still some people falling through conditions, many of whom are disabled. The the cracks). impacts are worldwide and are likely to increase in the coming months. So, as we look around the world, what have we learnt about social protection more Yet, this is happening in a world where, in broadly as a result of the Covid-19 crisis? My most low- and middle-income countries, initial thoughts are set out below and, over social security systems are entirely the next few weeks, Development Pathways inadequate even for normal times, with hopes to follow up in more detail on many of the vast majority of people – including these aspects. older people, people with disabilities and children – unable to access any form of WE ARE ALL VULNERABLE income support from the state. Further, in In development discourse, it is common to high-income countries, over the past decade hear the term ‘vulnerable groups’ used, as some governments have taken advantage if some people are vulnerable while others of the global economic crisis and used the are not. And, it is often argued that the aim excuse of ‘austerity’ to cut social security of social protection is to help the 'poor and entitlements, in particular for those living vulnerable.' Witness the definition of social in poverty, the unemployed, people with protection by Stephen Devereux and Rachel disabilities and the sick. At the same time, Sabates-Wheeler, which has influenced policy taxes have been reduced which have thinking in many low and middle-income benefitted mainly the rich and generated countries: much higher levels of inequality. "Social protection describes all public and However, as a result of Covid-19, things private initiatives that provide income or have changed. Some countries are putting consumption transfers to the poor, protect the in place massive programmes of support for vulnerable against livelihood risks, and enhance their citizens and residents. For example, in the social status and rights of the marginalised; my own country, the UK, the government’s with the overall objective of reducing the approach to social security is being economic and social vulnerability of poor, turned on its head, at least in the short vulnerable and marginalised groups." term. Following a decade of cuts, among other measures the government is now The aim of 'helping the poor, and vulnerable guaranteeing to pay 80 per cent of the wages and marginalised' has been used by advocates of employees who would otherwise face the of poverty targeting to argue against sack, as long as they are retained; similarly, self-employed workers will receive 80 1 WHAT HAS THE COVID-19 CRISIS TAUGHT US ISSUE NO. 29 ABOUT SOCIAL PROTECTION? APRIL 2020 universality in the design of social security And, even in normal circumstances, incomes schemes (despite the evidence of widespread are highly variable (see Charles Knox- failure of poverty targeting worldwide and Vydmanov’s blog on how ‘the poor’ don’t the fact that the right to social security is exist). a universal entitlement). Yet, Covid-19 has shown us that we are all vulnerable. Even In the context of Covid-19, the simplistic if the majority of us do not experience the dichotomy of the 'poor and non-poor' – which most severe Covid-19 symptoms, we are has often driven social protection policy – nonetheless affected economically, with makes even less sense than it did prior to the many – perhaps the majority – experiencing crisis. Today’s apparently secure formal sector significant falls in their standards of living. employee is tomorrow’s 'poor person,' once s/he becomes ill or loses their job and We also need to bear in mind that, across income. So, we need to think differently both low- and middle-income countries, most during and after the crisis. people were already living in poverty before the crisis, which makes them much less able A UNIVERSAL CRISIS REQUIRES A to address the impact of Covid-19. Figure 1 UNIVERSAL APPROACH TO shows how many people were living, pre- SOCIAL SECURITY crisis, under different levels of per capita In a context where we are all vulnerable, daily consumption across a selection of a universal crisis like Covid-19 requires a countries, and it is clear that the majority universal response. It makes little sense are living on less than US$10 PPP which, in to use poverty targeting to determine who nominal dollars (which are to the side of the should receive support and who should not figures), is often very little. Bear in mind that when we may all be affected by the crisis at the poverty line in the USA is around US$20 any time and urgently need support. per day, and this should give an idea of how low incomes are across developing countries. FIGURE 1: LEVELS OF PER CAPITA DAILY CONSUMPTION, IN BOTH PURCHASING POWER PARITY (PPP) AND NOMINAL DOLLARS IN A SELECTION OF LOW- AND MIDDLE-INCOME COUNTRIES1 $4.05 3 3 $3.42 49 14 12 9 12 $2.23 $3.73 $4.59 $1.88 19 18 32 27 $2.53 $1.09 28 $2.05 24 $1.30 $5.00 31 $1.47 $0.64 26 21 38 42 $1.19 $2.75 22 $0.87 12 24 $0.77 6 $1.60 15 6 $0.71 7 $0.95 Bangladesh Indonesia Cameroon Uganda Bolivia 2016 2017 2014 2016 2016 Between $ 1.90 Between $ 3.20 Between $ 5.50 Below $ 1.90 PPP a Above $10 PPP a and $ 3.20 PPP a and and day day day $ 5.50 PPP a day $ 10 PPP a day Source: PovcalNet. 1 The colours show the purchasing power parity (PPP) values, while the black numbers to the right of the ‘person’ figures show nominal (or actual) dollars. 2 WHAT HAS THE COVID-19 CRISIS TAUGHT US ISSUE NO. 29 ABOUT SOCIAL PROTECTION? APRIL 2020 Indeed, we have to remember that, even in the percentage of 'poor and 'near poor' is normal circumstances, poverty targeting in less than 50 per cent should still use low- and middle-income countries does not poverty-targeting. I guess he’s referring to work: as our publication Hit and Miss shows, middle-income countries such as Colombia most poverty-targeted schemes exclude and Indonesia where, as Figure 2 shows, the more than half of their intended recipients targeting errors produced by their social (and some, more than 90 per cent). During registries are massive (60 per cent and 71 per the Covid-19 crisis, it is important to reach cent respectively) and, as I’ve argued above, everyone while also ensuring that the poorest most people live on low incomes anyway and and most vulnerable members of society are everyone is vulnerable to Covid-19.2 I guess adequately protected: the only way to do this the advocates of poverty targeting find it hard is to adopt a universal approach. to let go of their deeply ingrained beliefs! Indeed, during the Covid-19 crisis, poverty THE ADVOCATES OF POVERTY targeting tools such as [anti-]social registries TARGETING HAVE LEFT that use proxy means tests are almost worse COUNTRIES UNABLE TO RESPOND than useless in identifying who should EFFECTIVELY TO COVID-19 receive support. Given that they use data One unfortunate consequence of the on household assets that was collected obsession with poverty targeting is that it many years ago, they cannot, by their very has undermined the capacity of low- and nature, tell us anything about family incomes middle-income countries to put in place an during the crisis. So, they absolutely must effective universal response to Covid-19. not be used. But, pity the countries that were While many of us have argued for years that persuaded by donors to spend tens of millions countries should establish universal, lifecycle of dollars in establishing these useless social security systems, it has been difficult registries. to compete with the influence of the true- believers in poverty targeting, who have had It is good, though, to see signs that the World the power and, more importantly, the money Bank is changing its tune. A recent blog by to persuade countries to introduce poor relief one of its lead economists has argued that schemes such as conditional cash transfers the poorest countries should put in place and workfare. Alongside their high exclusion universal responses. However, he bizarrely errors, these programmes have low coverage still promotes the fallacy that countries where and exclude, by design, the majority of the FIGURE 2: TARGETING EFFECTIVENESS IN COLOMBIA’S FAMILIAS EN ACCIÓN PROGRAMME AND INDONESIA’S SOCIAL PROTECTION CARD olombia amilias e Acción Indonesia Social Protection ard Location: Colombia

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