Overview of social Laura protection Rawlings, World Bank
Pensions Core Course
April 2015
1 Outline
2 • What is social protection? • Types and functions of social protection • Social protection today • Common questions and concerns • World Bank and Social Protection Outline
3 • What is social protection? • Types and functions of social protection • Social protection today • Common questions and concerns • World Bank and Social Protection What is social protection? 2 x Number of 1.2bn elderly People in extreme (over 60) poverty below in 2050 $1.25/day Social protection is (compared to 2010) about how we take care of ourselves and each other to 75 m. manage risk 674 Unemployed Average number of youth natural disasters Which definition best fits your understanding of social protection?
A. “The set of public measures that a society provides for its members to protect them against economic and social distress that would be caused by the absence or a substantial reduction of income from work as a result of various contingencies (sickness, maternity, employment injury, unemployment, invalidity, old age, and death of the breadwinner); the provision of health care; and, the provision of benefits for families with children.”
B. “A set of public actions which address not only income poverty and economic shocks, but also social vulnerability, thus taking into account the inter-relationship between exclusion and poverty.”
C. “Social protection and labor market regulation that reduce the risk of becoming poor, assist those who are poor to better manage further risks, and ensure a minimal level of welfare to all people.”
D. “Public actions – carried out by the state or privately – that: a) enable people to deal more effectively with risk and their vulnerability to crises and changes in circumstances (such as unemployment or old age); and b) help tackle extreme and chronic poverty.” 5 Which definition best fits your understanding of social protection? A. “The set of public measures that a society provides for its 38% members to protect them against economic and social 31% distress …” B. “A set of public actions which 23% address not only income poverty and economic shocks, but also social vulnerability …” C. “Social protection and labor 8% market regulation that reduce the risk of becoming poor …”
D. “Public actions – carried out A. B. C. D. by6 the state or privately …” World Bank definition: Social protection and labor policies let countries help their people achieve: Resilience Opportunity for the vulnerable for all Promoting human capital and access to productive Insuring against work impacts of different shocks Equity for the poor
Protecting against dire poverty and loss of human capital
7 Outline
8 • What is social protection? • Types and functions of social protection • Social protection today • Common questions and concerns • World Bank and Social Protection Core social protection CONCEPTS
Rights and Access to Basic dignity Services
Social Social Insurance: Assistance: RISK POOLING TRANSFERS
Labor Labor Market Market regulations Programs Core social protection INSTRUMENTS Social Social Labor Insurance Assistance
Cash Transfers Old Age Pensions (conditional, public works, unconditional) Active Labor Market Disability Programs In-kind Transfers (school Unemployment feeding, fertilizer, seeds)
Maternity Fee waivers, tax incentives
Health Regulations
Subsidies Informal savings pooling Universe of social protection programs Social protection over the lifecycle
Pregnancy/ Work Child- Old early Youth -ing hood age childhood age
Employm- Nutrition/ Youth ent ECD, CCTs CCTs for employ- Opportunity/ services, Productive for pre- (girls’) ment entrepre- aging Promotion school, education programs, neurship, health skills skills
Cash & in- OVC Child kind Equity/ programs, allowances Public Social transfers, child school works pensions Protection public allowances feeding works
Unemploy- Old-age Micro Resilience/ Maternity School ment, pensions, insurance allowances feeding disability disability Prevention schemes insurance insurance
12 CLICKER QUESTION At what stage of the lifecycle are needs concentrated in your country? A. Early childhood B. Childhood C. Youth D. Working age E. Old age 13 At what stage of the lifecycle are needs concentrated in your country?
A. Early Childhood 43% B. Childhood C. Youth 30% D. Working age E. Old age 10% 10% 7%
14 A. B. C. D. E. Outline
15 • What is social protection? • Types and functions of social protection • Social protection today • Common questions and concerns • World Bank and Social Protection The revolution is happening where 17 needs are greatest Rapidly 2000 2010 2012 9 countries, 35 countries 41 countries, 25 programs* 123 programs 245 programs
* Counts CTs with clear start dates only; green countries have had or currently have a CT Types of social protection across countries
Social Pensions Other Labor Targeted Assistance Insurance Programs service delivery
Employment Support Middle National, proxy- Expand multi- services; job marginalized income means tested pillar pension Expand formal search groups to access system countries social transfer disability & assistance; quality services systems accident labor regulation insurance
Reform contributory Low Index-based Skills Targeted support schemes; agricultural income Regular seasonal development, to increase Promote savings insurance; countries public works; especially for access to quality cash transfers to for informal Targeted support informal sector services for the select groups sector to extend health poor insurance poor
Cash & In-kind Social pensions Temporary job Rebuilding basic through Community- (pubic works), infrastructure Fragile safety nets through NGOs or community- Based Health demobilization & and services states community- based initiatives Insurance reintegration based organizations
18 Social protection contributes to gender equality, opportunities and better access to services
Access to Gender equality Nutrition education/ health
Transfers and school Transfers/public work for feeding helps meet Increased resources for poor women empowers implicit and opportunity poor families reduce them and improves costs of education, hunger and malnutrition capabilities boosting enrollment and attendance
Programs provide Improved nutrition in first improved access to 1000 days of life have Transfers during shocks education for huge impact on future preserve human capital girls/maternal care for incomes/productivity women Evidence shows that social protection and labor policies contribute to sustainable, inclusive growth
National level - Promotes social cohesion, enables reform - Stimulates aggregate demand
Community level - Creates productive assets - Improves functioning of labor markets - Creates local spillovers from increased demand Household level - Fosters accumulation of assets - Increases entrepreneurial activity - Increases/preserves human capital
Source: Alderman and Yemtsov (2012) Outline
21 • What is social protection? • Types and functions of social protection • Social protection today • Common questions and concerns • World Bank and Social Protection “For Protection and Promotion” book on Social Assistance addresses:
• Affordability
• Administrative feasibility
• Various disincentives Affordability: How much is spent on social safety nets?
7
% of GDP 6
5
4
3
2 % Average1.6 1
0
FIJI
IRAQ
MALI
PERU
CHILE
SYRIA
INDIA
TOGO
NIGER
BENIN
EGYPT
CHINA
NEPAL
BELIZE
KENYA
PALAU
BRAZIL
SERBIA
LATVIA
RUSSIA
GHANA
LIBERIA
SAMOA
TURKEY
ZAMBIA
MEXICO
TUNISIA
JORDAN
KUWAIT
ERITREA
KIRIBATI
POLAND
BHUTAN
KOSOVO
ESTONIA
ALBANIA
CROATIA
UKRAINE
BELARUS
NAMIBIA
PANAMA
BAHRAIN
GEORGIA
LESOTHO
LAO, PDR LAO,
RWANDA LUCIA ST.
VIETNAM
JAMAICA
ARMENIA
LEBANON
SLOVAKIA PAKISTAN
ECUADOR
SLOVENIA
ROMANIA
VANUATU
HUNGARY
URUGUAY
BULGARIA
THAILAND
MALAYSIA
SRI LANKA SRI
TANZANIA MALDIVES
MOLDOVA
MOROCCO
LITHUANIA
COLOMBIA
TAJIKISTAN
INDONESIA
CAMBODIA
MONGOLIA
MAURITIUS
HONDURAS
BOTSWANA
ARGENTINA
SEYCHELLES
SWAZILAND
PHILIPPINES
CAMEROON
NICARAGUA
AZERBAIJAN
ST. VINCENT ST.
KYRGYZ REP. KYRGYZ
YEMEN, REP. YEMEN,
MAURITANIA
TIMOR-LESTE
KAZAKHSTAN
GAMBIA, THE GAMBIA,
EL SALVADOR EL
BANGLADESH
SIERRA LEONE SIERRA
SAUDI ARABIA SAUDI
AFGHANISTAN
MADAGASCAR
MOZAMBIQUE
SOUTH AFRICA SOUTH
MONTENEGRO
BURKINA FASO BURKINA
BOSNIA & HERZ. & BOSNIA
MACEDONIA, FYR MACEDONIA,
ST. KITTS AND NEV. AND KITTS ST.
SOLOMON ISLANDS SOLOMON
MARSHALL ISLANDS MARSHALL
WEST BANK & GAZA & BANK WEST PAPUA NEW GUINEA NEW PAPUA AFR EAP ECA LAC MENA SA Sub-Saharan East Asia & Eastern Europe & LatinLatin AmericaAmerica && Middle-East & South Africa Pacific Central Asia CaribbeanCaribbean North Africa Asia CLICKER QUESTION What is the mean cost of safety nets in developing countries? A. O.1% GDP B. 1.6% GDP C. 3% GDP D. 7% GDP
E. 12% GDP 24 What is the mean cost of safety nets in developing countries?
58% A. O.1% GDP B. 1.6% GDP C. 3% GDP D. 7% GDP E. 12% GDP 19% 13% 6% 3%
A. B. C. D. E. 25 For Protection and Promotion benchmarks Social Assistance programs on
Program generosity: … is lower in developing than developed countries, with median program adding 10% to 20% to pre- transfer consumption of their beneficiaries For Protection and Promotion benchmarks Social Assistance programs on
Administrative costs … are moderate and in line with their OECD counterparts even for finely targeted means- or proxy-means tested programs
Index of admin cost = generosity * share of admin cost in program budget But there are remaining challenges…. • Social Insurance (SI) coverage is low and reaches mostly formal sector workers • SI systems are fragmented and inequitable • Subsidy systems are non-transparent, often regressive and distort incentives to work and save • Social assistance tends to have low impact due to small benefits and weak links to human capital development • Active labor market programs are underdeveloped, especially for the most vulnerable workers
( Ribe, Robalino and Walker) The typical social protection landscape….
Security SOEs Social Forces Insurance Civil
Servants GENEROSITY
Private Sector
Social Pensions
LOW INCOME HIGH INCOME
Fuel subsidies Social Assistance GENEROSITY Food subsidies
Public CashCash works transferstransfers Universal child benefits
LOW INCOME HIGH INCOME CLICKER QUESTION Is the ‘typical social protection landscape’ true of your country? A. Yes B. Similar, but not exactly C. Some key differences D. Not at all
32 Is the ‘typical social protection landscape’ true of your country?
57% A. Yes B. Similar, but not exactly 43% C. Some key differences D. Not at all
0% 0%
A. B. C. D. 33 Bangladesh: Fragmentation…..
34 …leads to coverage gap
35 ….are there solutions? THE WORLD BANK’S SOCIALTHE P WROTECTIONORLD B ANDANK’S LABOR STRATEGY 2012-2022 SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From fragmented approaches 38 donors are fragmented across ministries and Cash transfers in Sub Source: Outside govern ment 45% Garcia and Moore ( - Other 11% - 2012 Saharan Africa ) welfare Social 35% labor security Social , 9% / to Few Integrated Systems Fragmentation: harmonized systems Unclear institutional roles non Financinginadequate and Incentiveincompatibility imply: programs, others excluded access to multiple Some beneficiaries have programs implement similar Differentministries/donors - transparent THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 Social protectionSocial systems 39 Program systems Admin Program Program sub - . Program government across programs andlevels of Aim Policy Level: security, or equityopportunity supportone or more programs for Aim: Administrationlevel: portfolio of programs programs andharmonizing across Aim: Programlevel: : Ensuringoverall policy coherence Buildingbasicsubsystems to Improving design of existing Source: Source: Robalino , , Rawlings Walker and (2012) Administrative systems
Source: For Protection and Promotion THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 41 more 3P functions Goal: Building the SP programs functional formal Few or no “nuts “nuts and bolts” sub provide one or protectionfor thefuture Systems:Bettersocial Low capacity contexts - systems to efficiency efficacy and coordinate limited capacityto fragmented, with Existing systems often Emergingcapacity coordinationacross of each program,of each Goal: ImprovingGoal: improving contexts programs institutional roles andclear aligned incentives programs with Well ensure efficiency, Bettercapacity coordination to compatibility - Goal: Policy equity and equity and functioning contexts incentive 41 CLICKER QUESTION What are the 3 levels in a social protection systems?
A. Policy, Program and Administration B. Prevention, Protection and Promotion C. Vulnerability, Equity and Productivity D. Childhood, working age, old age
42 What are the 3 levels in a social protection systems?
58% A. Policy, Program and Administration B. Prevention, Protection and 32% Promotion C. Vulnerability, Equity and Productivity 10% D. Childhood, working age, old age 0%
A. B. C. D. 43 THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From exclusion 44 Meeting the challenge Low coverage concentrated management building, performance I excluded Innovation in reaching the inclusion Fiscally sustainable informal sector inclu vulnerable groups, poor populations and fragile contexts low among: nstitutional - income countries and ding women capacity capacity to inclusion
SS AfricaSS Percent 75 12 13 % of households receivinghouseholds of % transfers Only socialOnly assistance Notransfer MENA 70 17 13 SAR 65 23 9 database Source: Labor marketLabor programs socialOnly insurance LAC 46 21 27 World BankASPIRE EAP 32 22 46 ECA 22 43 33 THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From less productive Low productivity concentrated Meeting the challenge 45 • • • accessto jobs Improving especially among children Investment in Informal,rural groups Poorpopulations fragilecontexts Low education, health and nutrition and health education, Improveaccess to servicesin basic capacity building capacity Foster activationprograms, skills, productivitywork to enableaccess to higher Improvemarket labor functioning - income countries productivity human capital,human sectors and vulnerable and and to Middle Middle East and North Africa more productive the worldthe of work is nota world of wage earners employe Moving farmers farmers self 27% 26% employe South 29% d 21% self - d - Source: WDR 2013 Calculations WDR 2013 Source: Asia beyond the formal sector wage 47% wage 50% East Asia and the Pacific employe farmers 34% 23% self Sub d employe - 33% self - Saharan Africa d - farmers 48% wage 19% wage 43% THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From inflexibility The need effectivefor risk Meeting the challenge 46 most vulnerable Strengthen programsto during crises up and laborportfolio that can be Addprograms to socialthe protection newlythe vulnerable Enhance existing programsto are inplace Ensure appropriatethat programs poor regions among poor people widespread, severe and concentrated in Crises are increasingly frequent, systemic crises Against both individual shocks and management before in times of crisis timesof in shocks hit help the to capture scaled responsiveness 1991 disasters of number Average 446 - 95 disasters number of number 2006 Average 674 - 10 CLICKER QUESTION What is the main challenge that you see in SP? A. Fragmentation across programs B. Coverage of poor, vulnerable C. Productivity and links to labor markets, human capital investments D. Responsiveness to crises
47 What is the main challenge that you see in SP? A. Fragmentation across programs B. Coverage of poor, vulnerable C. Productivity and links to labor markets, human capital investments D. Responsiveness to crises 0% 0% 0% 0%
A. B. C. D. 48 Outline
49 • What is social protection? • Types and functions of social protection • Social protection today • Common questions and concerns • World Bank and Social Protection World Bank Mission • Eradicate extreme poverty, achieve shared prosperity • Low- and middle-income countries • Approach – Multi-sectoral – Country ownership – Inclusive: Govt, CSOs, private sector 51 World Bank Twin Goals
Ending extreme < 3% of global pop. below $1.25 poverty by 2030 a day
Boosting shared Growth of incomes of bottom prosperity 40% of population in every country 52 World Bank Twin Goals: what will it take?
The pace of poverty reduction in Ending extreme Sub Saharan Africa and South Asia poverty by 2030 will need to pick up
Any type of growth will not suffice – Boosting shared growth needs to be broad based, prosperity generating jobs and opportunities for all segments of the population Where We Work CLICKER QUESTION Where are you from?
A. Latin America B. Africa C. Middle East D. Europe – Central Asia E. East Asia - South Asia
54 Where are you from?
A. Latin America B. Africa C. Middle East D. Europe – Central Asia E. East Asia - South Asia
0% 0% 0% 0% 0%
A. B. C. D. E. 55 World Bank Staff
• 10,000 (6,000 in DC and 4,000 in 131 country offices) • 165 nationalities • 140 languages • 55% of total staff from developing countries CLICKER QUESTION How many languages do you speak?
A. 1 B. 2 C. 3 D. 4
E. 5 or more 57 How many languages do you speak?
100% A. 1 B. 2 C. 3 D. 4 E. 5 or more
0% 0% 0% 0%
A. B. C. D. E. 58 The World Bank’s Role in
59 Development • A Development Finance Institution: – The largest provider of development assistance(over$50 bln per year since 2008 crisis; $30 bln pre-crisis, 2005-7)* • A Global Partner: – Works with Govts, NGOs, Private Sector, Bilaterals, Multilaterals • A Knowledge Bank: – Provides technical assistance from its global knowledge and diverse pool of skills * IBRD, IDA and IFC new commitments; IDA new commitments is about $15 annually Funding and Agencies
Sources of Funding Agencies International Bank for 1944 • International bond Reconstruction and markets Development
• Donor commitments International 1960 Development • Loan repayments Association International 1956 Finance • Trust funds Corporation Multilateral 1988 Investment Guarantee Agency International Center 1966 for the Settlement of Investment Disputes International Bank for Reconstruction and Development (IBRD)
• 187 member countries • Lends to middle income countries • Repayment over 25 years • Funds mainly from borrowing on capital markets • Sells bonds in international capital markets • Flexible loan rate at: LIBOR + 17 basis points
www.worldbank.org/ibrd
61 International Development Association (IDA)
• 171 member countries • Lends to poorest countries (81) • Funded largely from wealthier government contributions, with additional funds from IBRD profits and repayments of earlier IDA credits • Repayment over 25-40 years • Credits carry 0.75% service charge, no interest
www.worldbank.org/ida
62 Bank Lending by Theme
Human development Urban development Social 9% 9% development/gender Trade & integration 2% Public sector 5% governement 10% Social protection & Economic risk management 12% 1%
Rural development 12%
Environment & Financial & private natural resources sector dev 24% 16%
63 Social Protection in the World Bank Results – On average, in the last 3 years, 114 million poorest, especially women and young people benefited from SP – The World Bank currently works with 88 countries on Social Protection and Labor issues, with investment and policy advice provided to 31 new countries (22 of them IDA) just since 2009. Focus on challenges – Fiscal pressure in client countries limits the ability to expand the coverage – Weak record keeping and M&E capacity – Weak outreach capacity, particularly in low income and fragile settings 64 CLICKER QUESTION What are the World Bank’s twin goals? A. GDP growth and reduced income inequality in developing countries B. Knowledge and results C. Economic growth and human capital development D. Eliminate extreme poverty, boost shared prosperity 65 What are the World Bank’s twin goals? A. GDP growth and reduced income inequality in developing countries B. Knowledge and results C. Economic growth and human capital development D. Eliminate extreme poverty, boost shared prosperity 0% 0% 0% 0%
30 66 A. B. C. D. Recent major World Bank analytical publications in Social Protection
67