Social Security and Development Planning: Some Issues by PAUL FISHER* ECONOMIC and social development policies ning objectires usually emphasize capital forma- both aim at improving the welfare of the popula- tion. Those who regard tile lack of capital goods tion, though they often appear to compete with as the l)rincil)i\l barrier to accelerated economic rather than complement each other. This is espe- growth, ilIlt therefore the most promising target cially true for emerging nations, whose limited of tlerelolmie~~t strategy, somet inies opl)ose social resources impose a degree of austerity upon the security I)rogr;uns on the basis of exaggerated satisfaction of the collective economic demands views of their capacity to increase consumption of their citizens. In such circumstances, social and reduce savings and investment. security provisions may easily be orerlookecl by Planning techniques rely in principle on a the development planner, who naturally is far comparison of costs and benefits for the establish- more concerned with the growth of the economy ment of priorities among the various government than with economic security for individuals and progr:Ulls. Social security programs share with who is prone to pay more attention to resources education, health, housing, and other social de- using government funds than to transfer l)ay- velopment activities the difficulty that their aims ments. are not fully expressed by the usual central plan- To the extent that social development projects ning goal of greater per capita output. These make demands on scarce resources, they affect aims, consiclerecl separately from the expencli- the rate at which accelerated economic growth tures necessary for their achievement, can usually can be obtained, somewhat in the same way as do be better expressed in physical terms than in activities directed to achieve other national goals, monetary terms-as so many years of education such as national defense. ~Uthough social security for a specific percentage of the school population, transfer payments may affect aggregate savings as a percentage decline in the mortality or the in some degree, they do not establish independent morbidity rate, as so many cubic feet of shelter claims on scarce resources. Consequently, a degree per family, and the like-and hence do not easily of individual income protect ion in the present is tit into the planning mechanism. compatible with laying the groundwork for a To gain consideration for social security pro- more productive economy in the future. grams within the conceptual framework of the This fact strengthens the case for taking ade- plan, attempts hare been made to measure the quate account of social security measures in the contribution these programs make toward re- development plan. Such an action fits well into a source mobilization. It has been said, for example, concept of planning that must be concerned also that social security produces a “sense of well-be- with the present and that finds itself confronted ing and personal satisfaction” (2) and that it with social security as a firmly established method consequently enhances the morale, stability, and of income maintenance. Incorporation of social productivity of the labor force. Similarly, social security measures in the development, plan has security expenditures are considered by some been recommended at many international meet- writers as an investment in “human capital.” ings but has seldom been followed by those who (W7) Unfortunately, neither of these approaches draw up economic plans. (1) yields quantifiable measures of how much a spe- One reason for this failure is the difficulty of cific social security expenditure will add to the reconciling social security programs with tradi- income per capita (or gross national product) in tional planning objectives and teclmiques. Plan- the planning period. Such effects are difficult to ascertain for any type of investment, and they *International Staff, Office of Research and Statistics. are even harder to determine for transfer pay- (A list of numbered references follows the article.) ments. Sor does il comparison with the experience BULLETIN, JUNE 1967 13 of other countries yield a quantitative solution insurance was most prevalent (117 countries) , t,hat, fits into the planning calculus. and unemployment benefit programs were in Social development programs including social effect in only 34 countries. The greater prevalence security are based upon a society’s concept of a of one type of program in comparison with an- better life. Decisions as to which social goals other does not indicate any necessary logic in shoulcl be realized, to wllat extent and by what terms of stages of economic development. Some of method of implementat ion, are made essentially the most highly industrialized countries may not, in the political :WelliL though they are, of course, have certain types of programs that have already subject> to economic constraints as to feasibility, been introduced in several developing countries. timing, etc. These decisions then become, in large The oldest and, numerically, the most wide- part, given data for a comprehensive develop- spread types of social security programs are those rnent plan. providing compensation for work-connected in- Integration of social security programs within juries and occupational diseases. There are very the economic plan does not necessarily imply few countries without at least some type of lim- subordination of social security to economic ited legislation in this field, though some of these growth: It, can lead to a choice of implementing programs still consist mainly of provisions that social security measures that. are compatible with fix the liability of individual employers for pay- and beneficial to the development plan. ing compensation for work-connected accidents. No attempt is made here to est,ablish any pri- In the great majority of countries, these pro- ority for the introduction of various social secu- grams are financed solely by employers. The gen- rity programs within developing nations. The eral reliance on employer contribut,ions alone re- art.icle is restricted to a first nttenlpt at demon- flects the traditional I)rinciple that employers strating that social security programs, intelli- should be liable for payment of compensation to gently conceived, need not work at cross purposes employees injured in the course of tlleir work. wit11 the objectives of tlerclol~meni plaiiiling and, Ninety-two countries now have some type of when integrated wit11 the tlevelo~~meiit plq c:~n oltl-age, invalidity, and survivor benefit programs :V.?U:llly help realize these objectives. Of tile vari- (including 8 out of 11 Middle J&tern countries, 011s Ways in which social security can affect tile 19 out of 23 countries in Central and South economy, Ollly t lie consunil~tion alit1 SiLVillgS eflectS A\niericn, 11 out of 24 countries in Asia and mtl tlie effect on redistribution are discussed here. Oceania, iLlld 2:) 0llt of is!) countries in Africa). Mentiou is also made of tile l)oteut ial coiitribiition Ihln 1!)63 to 1966, 11 developing countries en- to public sector investment that may be made by acted old-age, invalidity, and survivor measures social security programs. for the first time. One of the earliest approaches toward cover- age for old-age, disability, and survivor benefits in developing countries is in tile for-111 of “pror- EXTENT OF SOCIAL SECURITY PROGRAMS IN itleiit funds” (in effect, compulsory savings DEVELOPING COUNTRIES schemes), under which a lump sum is paid to The social security programs that have been covered persons upon retirement or disability 01’ int roducetl in the developing countries show a to tlleir survivors. Where social insurance pro- wide variation in terms of coverage.’ grams have been established, wage-related contri- At the beginning of 1067, at least some type of butions itlld benefits seem to prevail. SOciill security progr:lm was in effect in 120 coun- Some tyl)e of sickness and maternity benefit tries (compared with only 80 countries iii 1!)5!) program is now in etfect, in 65 countries. This total and 58 countries in 1!)48). Only eight countries csclutles Vitl’iOllS countries iu which only one 01 llad no social security program in force. Of the more limited types of sickness benefits are pro- different types of progranls, industrial accident vided alld the approximately 20 countries that provide only for some kind of maternity benefit ~“‘O.g”:“ll. 1 This section is based on Social Sccuritg Programs Tlwouflhout tlr v llYorZt7, 196’7 (Social Security Adndnistra- SOlllCL fOlIl1 Of f:llilily :tllo\vailce l)rogr;ln~ is 110\\ tion, Mice of Research aud Statistics), 1967. ill etiect in 62 c*oriiit ries. Most of these programs 14 SOCIAL SECURITY were enacted before 1960. Among developing appear that social security is one of the byprod- countries, such programs are now in effect in 20 ucts of industrialization, especially where trade African countries (including all 18 French-speak- unions have wielded significant political power. ing nations), in six Latin American countries, in In contrast, in some developing nations social three Middle Eastern countries, and in three security programs have been establ jslled and ex- Southeastern Asia countries that were formerly panded desljite a slow rate of industrial growth. French colonies. The introduct ion of social security programs can Unemployment benefit programs are in effect in in many cases be traced to colonial influences