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Social Protection and Social Development

  • James MidgleyEmail author
Reference work entry
Part of the Social Work book series (SOWO)

Abstract

This chapter discusses the role of social protection (also known as social security or income protection) in social development. It traces the expansion of social protection over the last two decades and shows how cash transfers and similar innovative programs are promoting social development by reducing poverty, fostering sustainable economic development, and promoting social justice. The chapter points out that its contribution can be significantly enhanced by improving coverage, administrative efficiency, financing, and integration with national development objectives. These improvements are needed if social protection is to contribute effectively to the goal of achieving well-being and social justice which have long characterized social development policy and practice.

Keywords

Social development Social protection Cash transfers Poverty Redistribution Social justice Gender Economic growth 

From its early beginnings in the Global South in the years following the Second World War, social development has evolved as an eclectic field of practice in which various interventions are used to promote social well-being. Most social development interventions are implemented at the community level, but some are directed at households or at the national level. Many social development programs are supported by international donors and international development organizations. Prominent among the many interventions associated with social development are community development projects, programs to enhance gender equality, asset building initiatives, cooperatives, preschool education, maternal and child health programs, local economic development activities, and many others. These programs are distinctive for linking economic and social interventions in a multifaceted development process.

Until recently, social protection was not viewed as a part of social development, primarily because social protection programs, which were introduced during colonial times, were very limited in scope, catering to workers in the modern sector of the economy or to destitute people in the cities. They were also believed to be unaffordable and detrimental to economic growth. However, the situation has changed dramatically since the 1990s when some governments in the Global South launched innovative social protection initiatives targeting low-income families in both urban and rural areas. Among the earliest and best documented are conditional cash transfer programs like Mexico’s Prospera program (originally known as Progresa and subsequently as Oportunidades) and Brazil’s Bolsa Família program, India’s public works program established as part of the 2005 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), and South Africa’s Child Support Grant. In addition, some developing countries have introduced universal retirement pensions and asset savings schemes, and micro-insurance initiatives have proliferated.

Today, it is widely accepted that social protection is an integral part of social development, and, indeed, the expansion of these programs throughout the Global South is a remarkable addition to the social development practice repertoire. The priority given to these programs by international donors and organizations such as the International Labour Organization (ILO) and the World Bank shows just how popular they have become. However, many issues arising alongside their expansion should still be debated. Of particular importance are the economic effects of social protection. Critics on the political right contend that social protection programs may have desirable humanitarian goals but that they impede economic growth since they divert resources from much-needed productive investments. Others claim that the issue of affordability has not been carefully considered and that, unless checked, these programs would become prohibitively expensive. Social development writers challenge these arguments by pointing out that social protection contributes to sustainable economic development. In addition, they contend that social protection plays a vital role in poverty eradication in the Global South and that it can be used to promote social justice by directing resources to vulnerable groups, redistributing resources and enhancing gender equity.

This chapter considers these and other issues. First, it defines social protection by describing the different types of programs that have evolved over the years. Next, it discusses the role of social protection in social development by focusing on three ways social protection contributes to the field. These include reducing poverty, fostering sustainable economic development, and promoting social justice. The chapter points out that these contributions can be significantly enhanced by improving the administrative efficiency of social protection, as well as its financing, coverage, and integration with national development goals. These improvements are needed if social protection is to contribute effectively to the wider goals of achieving well-being and social justice for all which have long characterized social development policy and practice.

Understanding Social Protection: The Historical Context

The term social security emerged in the Western countries in the 1930s to refer to government social insurance and social assistance schemes designed to protect families against loss of income during times of adversity. The term social protection is of more recent origin, gaining popularity in the 1990s as a descriptor for a variety of income transfer programs sponsored by both government and nongovernmental organizations. These programs not only provide a safety net that helps families facing financial risks, but they also subsidize incomes in order to reduce poverty. Having a wider remit than social insurance and social assistance, they include food for work programs, agricultural subsidies, asset savings accounts, famine relief, and microinsurance, among others. Although the terms social protection and social security are often used interchangeably, the International Labour Organization (ILO) (2014) points out that the term social protection is now widely used as a broad, generic term for a large number of income transfer programs. Following this approach, conventional social security schemes such as social insurance and social assistance are subsumed under the broader heading of social protection.

However, it should be recognized that the nomenclature of social protection is very imprecise and that many other terms such as economic security, income protection, cash transfers, transfer payments, social grants, entitlements, and welfare are also used in the literature. Although this complicates matters, there is agreement that the most distinctive feature of these programs is that they transfer resources, either cash or in kind, to individuals and households. These transfers are referred to as benefits or benefit payments. The term contingency refers to the needs and risks these programs seek to address, which include social problems such as hunger, homelessness, and poverty that are not necessary the result of adversity but of wider structural inequalities.

Resource transfers have characterized social protection programs ever since they first emerged millennia ago. Originally, social protection comprised culturally institutionalized practices and was found in the earliest human societies. Kin and community obligations to care for those in need were well-defined among hunter gatherer and nomadic people, and, with the advent of settled agriculture, practices such as channeling charitable giving through temples and religious organizations or setting aside communal land for needy people became commonplace. These practices still persist today. For example, Patel et al. (2012) reveal how in Zimbabwe the Zunde raMambo system in which village chiefs allocate land to cultivate crops for widows, orphans, and elders without means of support coexists with the government’s formal welfare system. Although early forms of social protection comingled with religious charity, governments were also involved by enacting statutes protecting vulnerable people or requiring that those in need be provided for. Mesa-Lago (1978) reveals that both the Inca and Aztec empires required rural communities to cultivate communal plots to feed needy people.

However, almsgiving was largely dictated by religious practice and seldom involved the state. One exception was the treasury or Beit-ul-Mal established by the Caliph Omar in the seventh century, which collected and distributed zakat payments, a religiously mandated form of giving incumbent on all Muslims. However, since zakat was previously a private matter dictated by conscience, the government’s involvement proved to be controversial, and the practice was eventually abandoned. Another exception was the enactment of legislation by medieval European monarchs to require the payment of tithes to the church. In England, these laws laid the foundation for the Elizabethan Poor Law of 1601, which created the first nationwide program of poverty relief administered by local parishes under the supervision of the national government. It is widely recognized as a major development in the history of social protection. The Poor Law was introduced in a few British colonies during the imperial era and was subsequently emulated by some governments in the Global South. It was also important for codifying the principles of social assistance. Among the most important of these is the principle that benefits shall be provided by the state to those who meet statutorily defined conditionalities including limited income and assets. Although social assistance has changed radically since the Elizabethan Law was enacted, the means test has remained its most distinctive feature. Other conditionalities such as age and citizenship are also used to determine eligibility. The innovative conditional cash transfer programs introduced in Latin American countries in the 1990s extended these conditionalities to require school attendance, immunization, and health checkups. Similar conditional cash transfer programs have been established in many other developing countries. They are often contrasted with what are sometimes called unconditional transfers, which is a misnomer since all social assistance schemes impose conditionalities.

Social insurance is another important type of social protection. Its historic roots can be traced to the communal funds established by artisans in the ancient civilizations. These funds collected regular contributions from their members, which were pooled and used to provide benefits when members faced adversities such as illness, accidents, or death. The funds laid the foundations for the subsequent worldwide evolution of mutual aid associations. These became quite large in Europe in the nineteenth century, providing financial support as well as medical services to industrial workers. In England, these associations were known as Friendly Societies, and they enrolled millions of members, paving the way for the introduction of health insurance by the British government in the early twentieth century. In Germany, they inspired Chancellor Bismarck’s social insurance initiatives in the 1880s. Unlike social assistance, which is dependent on a means test, social insurance benefits are paid on the basis of a contribution record. After the ILO was established in 1919, social insurance was given high priority, and many of the organization’s member states introduced these programs to maintain the incomes of workers when faced with illness, disability, maternity, unemployment, retirement, and other contingencies that would interrupt, reduce, or terminate income derived from regular employment. Since then, most countries have established social insurance programs that now cover hundreds of millions of people around the world.

Mandates have been an integral part of social protection for many years. They are statutory requirements imposed by governments on employers to pay benefits to their workers when specified contingencies arise. They first emerged in the late nineteenth century to mandate payments to workers who were injured at work. Workers’ compensation, as this approach is known, is still widely used today. However, mandates were also imposed to compel employers to grant leave to workers who became ill or who were expecting a child and to mandate severance or redundancy pay when workers were laid off. More recently, governments have mandated the payment of minimum wages in order to improve the living standards of working families. They were first introduced in Australia and New Zealand at the end of the nineteenth century but have now been adopted in many other countries. In the United States, many states and municipalities have introduced their own income mandates, which are widely known as living wages.

Some governments have also established universal social allowances, which pay benefits to those meeting specified conditions without using a means test or contribution record. These demogrant or categorical programs, as they are also known, were first introduced in the Western countries in the mid-twentieth century to supplement the incomes of families with children irrespective of their income or extent of need. Originally called family allowances, they are now usually referred to as child benefit or child allowance programs. Universal programs have also been used on a limited basis to pay benefits to people with disability and, in a few cases, to elderly people. Willmore (2007) notes that the governments of some developing countries, including Bolivia, Botswana, Lesotho, Namibia, and Nepal, have recently introduced universal pensions funded from general revenues. However, in most countries statutory pensions are provided through social insurance or social assistance.

A recent development is the introduction of tax-funded benefits by which governments direct resources to taxpayers for various social purposes. These benefits flow primarily through income tax credits which reduce the tax liability of qualifying households and accordingly raise their disposable income. Historically, households with children have received credits of this kind, but the benefits have been extended over the years to help families meet the costs of caring for elders or disabled relatives. Tax benefits are also used to encourage employers to provide pensions or retirement savings schemes for their workers or otherwise to subsidize their wages. Wage subsidies through the tax system have expanded rapidly in recent years. In the United States, the earned income tax credit (EITC) is paid to workers whose earnings fall below a specified level in the form of refundable credit which they claim when filing annual tax returns. Currently, approximately 27 million workers benefit from this program (United States, Inland Revenue Service 2017). Other Western countries have introduced similar programs, but they are uncommon in the developing world for the obvious reason that relatively few people pay income tax. Tax-advantaged savings accounts have also become popular, providing incentives for people to save for retirement. These schemes allow for tax liability on interest to be sheltered until withdrawals are made at the time of retirement.

Some governments have promoted commercially managed retirement savings accounts as an alternative to statutory social insurance. In 1981, Chile’s military government under General Pinochet was one of the first to introduce these accounts to replace the country’s social insurance retirement system which dated back to the 1920s. The governments of a number of Latin American and some Eastern European countries emulated this development, and it was actively supported by the World Bank (1994), which claimed that conventional social insurance programs were unlikely to meet their obligations because of aging populations. In addition, it was argued that commercially managed retirement accounts provided investment choices and were more efficient than state-managed social insurance schemes. However, these schemes do not permit resource pooling meaning that the accumulated deposits plus interest are the sole source of retirement income. The provident funds introduced in some former British colonial territories after the Second World War are similar to commercial retirement accounts but they are state managed. Over the years, many provident funds have been converted into social insurance, but some, such as Singapore’s Central Provident Fund, continue to function. Commercially managed funds in several countries have either been discontinued or significantly modified, since it is now apparent that they have not met the retirement needs of most workers.

Individual savings accounts for low-income families, known as Individual Development Accounts (IDAs), have also become a part of social protection. They match the deposits of poorer savers and permit them to accumulate resources for education, housing, small business start-ups, and other approved purposes. Invented by Sherraden (1991), IDA programs are usually managed by nonprofit organizations and often complement the social services they provide to their clients. These programs facilitate asset accumulation rather than meeting immediate consumption needs and in this way help families to meet future contingencies. In addition to IDAs, other asset programs such as child and youth savings accounts, which provide tax-advantaged opportunities for young people and families to save for the future, have been established. Often, they help families to save to meet the costs of higher education. In some cases, governments provide the initial deposit, which is then augmented with family savings.

A range of other initiatives including food for work, famine relief, microfinance, agricultural commodity subsidies, and micro-insurance have augmented these core social protection programs. Also important are public works programs which have been established in many low-income countries, primarily to alleviate poverty and food insecurity. Micro-insurance programs have proliferated, as grassroots savings clubs and mutual aid associations have adopted formal operating procedures and benefited from having access to banks and technical assistance. Although some writers believe that preschool education, HIV prevention programs, rural health clinics, and community development projects should also be regarded as forms of social protection, there is a risk that the term becomes so broad as to be meaningless. In addition, this usage makes it difficult to distinguish between social protection and social services, causing confusion as well as administrative and budgetary difficulties. For these reasons, most scholars link social protection directly to the payment of benefits either in cash or kind. Indeed, many prefer the term cash transfers to social protection.

The Contribution of Social Protection to Social Development

Although social protection is now widely regarded as an integral part of social development, it cannot be taken for granted that its contribution has always been positive. Several examples can be given of incompatibility of social protection with social development. Social insurance programs in many developing countries still provide limited coverage and cater only to the small proportion of workers in the modern sectors of the economy. Similarly, conventional social assistance schemes based on the colonial poor law approach still operate in some parts of the Global South, imposing harsh conditionalities on poor families and failing to raise their incomes to basic subsistence levels. Clearly, the role of social protection in social development requires more careful analysis.

There is also a good deal of evidence to show that social protection has fostered social development goals. Evaluations of conditional cash transfers and other social protection programs, such as universal pensions, micro-insurance, and public works projects, show that they have improved the well-being of millions of families around the world. Qualitative ethnographic studies confirm these findings and support the contention that social protection contributes positively to social development. The following elaborates by discussing three ways in which social protection achieves this objective: poverty eradication, promoting sustainable economic development, and achieving social justice.

Social Protection and Poverty Eradication

Reducing poverty has been a major objective of social development since the 1950s, when community development was first introduced in the Global South. Most governments at that time were committed to reducing poverty through industrialization, which was believed to draw labor out of the subsistence agricultural sector and create remunerative wage employment on a sufficiently large scale to eradicate poverty. However, the results of industrialization were decidedly mixed, and only a few countries recorded high rates of economic growth and a significant decline in poverty. For most others, the promise of industrial development was not fulfilled. For this reason, leading development economists like Myrdal (1970) and Seers (1969) urged governments to reassess their commitment to industrialization and address the problem of poverty directly.

Hall and Midgley (2004) report that by the 1960s, many governments in the Global South had already augmented their budgetary allocations to the social services and that school enrolments as well as health conditions were gradually improving. Unfortunately, many borrowed heavily on international markets to fund their services, with the result that their indebtedness grew, requiring emergency aid from Western countries as well as the International Monetary Fund and the World Bank. This resulted in the 1980s and 1990s in the imposition of structural adjustment programs in many countries, with negative consequences for social development. As government programs were retrenched, social conditions deteriorated and poverty increased, particularly in sub-Saharan Africa and South Asia. Structural adjustments also fostered the imposition of liberal market ideas, which further undermined government social programs.

It was in this context that the United Nations convened the World Summit on Social Development in Copenhagen in 1995 to reassert the international community’s commitment to raise living standards throughout the world. The Summit resulted in the adoption of the Millennium Development Goals and the prioritization of poverty eradication (as well as improvements in health, education, and nutrition). By setting a target of reducing global poverty by half by the year 2015, the United Nations and its member states affirmed the historic social development goal of improving social well-being for all. A variety of antipoverty programs were identified, but no mention was made of social protection as a potentially useful means of achieving this goal. At the time, the idea that “just giving money to the poor” could reduce poverty was not discussed, largely because it was both ideological unpalatable and budgetarily improbable (Hanlon et al. 2010).

The introduction of conditional cash transfers in Brazil and Mexico and the expansion of social assistance in South Africa challenged these assumptions, and in the early years of the new century, it became apparent that social protection was having a positive impact. Since benefits were quite low, the proportion of the national budget allocated to these programs was relatively small, and despite predictions that the injection of cash into the economy would result in inflation and have other harmful economic effects, income transfers actually made a positive contribution to economic development (Midgley 2008). These findings influenced thinking about the role of social protection in poverty eradication, and many donor governments, as well as international organizations such as the World Bank, now began to promote their expansion.

Although conditional cash transfers led the way, other initiatives such as the expansion of China’s dibao social assistance program, the enactment in India of the MGNREGA in 2005, and the creation of universal pensions in a number of low-income countries have significantly extended social protection. Another important development was the formalization of mutual aid, which resulted in the recognition of micro-insurance as an effective social protection intervention. Today, many hundreds of millions of people around the world receive cash benefits that have raised their incomes and reduced poverty. Xu and Carraro (2017) observe that in China alone, the dibao program assists approximately 20 million people (up from four million in 2000), while Hall (2017) reports that Brazil’s Bolsa Família conditional cash transfer program pays benefits to more than 13 million families with about 50 million members (or more than a quarter of the country’s population). Asher and Bali (2014) point out that India’s Employees’ Provident Fund, which collect retirement contributions from workers in regular wage employment, has more than 80 million members (of whom 40 million are active participants). In South Africa, Patel (2015) reports that social grants of various kinds now reach about 17 million people. Even micro-insurance programs now cover many more families. In the Philippines, the micro-insurance program CARD MBA has more than 700,000 members (Alip and Amenomori 2011). In India, the Self-Employed Women’s Association, originally established in Gujarat to campaign for improved fees and working conditions for women bidi or cigarette rollers (Chen 2008), has expanded its operations to provide a variety of micro-insurance schemes that now cover more than a million women workers in several states.

Although increased coverage does not necessarily reduce poverty, a good deal of research has now been undertaken to show that social protection has indeed had a positive impact on the poverty rate. Most studies focus on the effects of these programs on recipient households, but some have attempted to determine whether programs have reduced the incidence of poverty at the national level as well. One of many early examples of studies of the impact of social protection on households is Hulme and Moore’s (2008) randomized study of a cash transfer program operated by the Bangladesh Rural Advancement Committee, which found that the incomes of households receiving cash benefits rose and that their nutritional status improved. Barrientos (2013) provides another early example of randomized study of the effectiveness of social protection by reporting that Mexico’s Progresa program raised the incomes of households in the experimental group by 7.5% in the first 2 years of the program’s operation, while poverty among the control group only increased slightly. A major international review of evaluations of conditional cash transfers by the World Bank (2009) confirms that most of these programs reduce the incidence of poverty among recipient households.

Although not as extensive as household impact studies, the findings of research into the effects of social protection on the aggregate, national-level poverty rate are also positive. Reviewing data obtained from household surveys in Brazil, Soares (2013) concludes that social protection programs including social insurance, means-tested social assistance, and Bolsa Família lifted 13.2% of the Brazilian population out of poverty. Examining the impact of social protection on poverty in Namibia, Levine et al. (2011) reach similar a conclusion, finding that social protection reduced the national poverty rate by about 22%. Patel (2015) reports that South Africa’s various social protection grants lowered the country’s poverty rate, especially in the rural areas. However, she cautions that the nation still has an unacceptably high rate of poverty which cannot be solved by income transfers alone. While social protection makes a major contribution to poverty eradication, sustained economic development is needed to raise standards of living for all.

Social Protection and Sustainable Economic Development

As mentioned earlier, social development is distinctive because it directly links social interventions and economic growth policies. This has been a feature of social development since the 1950s, when community development first combined economic and social projects in order to raise living standards at the local level (Pawar 2014). Similar ideas were implemented at the national level when governments adopted growth policies that transcended their formative preoccupation with industrialization and focused instead on poverty reduction and on expanding health, education, and social welfare services. Since then, the idea that the economic and social components of development should be integrated has been augmented by the inclusion of political, gender, and environmental dimensions, resulting in an even more inclusive conception of the development process (Midgley 2014). Although many economists still ignore those aspects of development which are not directly concerned with economic growth, most development writers agree that development should be an inclusive and sustainable process.

The adoption of the term Sustainable Development Goals as a successor to the Millennium Development Goals by the United Nations in 2015 reveals that this broader conception of development is now widely accepted in development circles. To achieve development in the fullest meaning of the term, economic growth must be accompanied by social programs that reduce poverty and enhance health, education, housing, and social well-being among the population as a whole. It also requires full participation in democratic decision-making, a commitment to human rights and gender equality, and economic growth policies that preserve the environment for future generations. Together with other programs, social protection makes a vital contribution to achieving sustainable economic development.

Social protection promotes sustainable economic development by investing in human capital, which is a precondition for growth. Today, most development economists believe that economic development is not only dependent on financial capital but requires human capital investments in the form of education and skills training. In addition, the productive economy needs a healthy and well-nourished labor force. Although many governments originally increased budgetary allocations to social services for political purposes (Hall and Midgley 2004), the idea that social spending generates positive returns to the economy was gradually accepted, providing an economic rationale for government welfare. This owes much to Schultz’s (1959, 1962) pioneering research into human capital, which demonstrated the positive economic effects of investing in health, education, and nutrition. He showed that antimalarial campaigns in India improved the health of farmers and resulted in higher crop yields and how improved nutrition raised labor productivity. During the presidency of Robert McNamara, the World Bank embraced the human capital theory and adopted its recommendations (World Bank 1975). Since then, investing in human capital has become a high priority in economic development.

However, it was only with the introduction of conditional cash transfers in Brazil and Mexico that the role of social protection in mobilizing human capital was recognized. As Papadopolous and Leyer (2016) point out, these programs were intentionally designed to promote human capital by requiring that the children of households receiving benefits attend school regularly, are immunized, and have health checkups. Reviewing a number of studies into the impact of conditional cash transfers, Barrientos (2013) reports that they raised school attendance, lowered dropout rates, and improved the health and nutritional status of recipient families. Although he cautions that increased enrolments do not result in improved educational standards if schools lack qualified teachers and are badly managed, the evidence shows that these programs are contributing to human capital and sustainable economic development in many parts of the world.

Social protection programs that do not impose school attendance and other similar requirements also contribute to the mobilization of human capital. Mutatkar (2013) reports that nutritional schemes directed at poor families have been in existence in India for many years, enhancing the food security of many millions of poor families. In addition to subsidizing basic staples, the country’s national network of community-based Anganwadi childcare centers has reduced child malnutrition. Ellis et al. (2009) observe that ameliorating hunger is given high priority in many social protection programs in African countries where paying cash transfers are increasingly preferred to emergency food rations. Patel (2015) reveals that many evaluations of South Africa’s Child Support Grant show that school attendance and nutritional standards improved even before conditionalities were first imposed in 2010.

Social protection also promotes sustainable economic development by stimulating employment and self-employment. Although hotly disputed by market liberals and many policymakers who believe that social protection programs foster worklessness and long-term dependency, many examples can be given of how they promote employment and self-employment. The most obvious is unemployment insurance, now quite common in higher-income developing countries, which maintains income when workers are unemployed and helps them sustain a decent standard of living while they seek work. Without these programs, they may become homeless and destitute, harming their chances of finding employment. Social assistance payments to unemployed people have a similar function. By preventing them from being relegated to the fringes of the subsistence economy, these programs assist them to find productive work.

More generally, there is evidence to show that social assistance programs that subsidize family income, such as conditional cash transfers, do not negatively affect work. Barrientos and Villa (2016) point out that most recipients of conditional cash transfers in Latin American countries are engaged in full-time work. Similarly, Patel (2015) reports that employment rates among families receiving pensions and the Child Support Grant in South Africa actually increased, with the highest increase being recorded among women. These findings challenge the neoliberal claim that social assistance has a negative impact on work incentives. Instead of trying to survive on meager benefits, families combine these payments with income derived from work and in this way improve their livelihoods.

Employment is also created by public works programs, which are widely regarded as a way of subsidizing household income in poor developing countries. As mentioned earlier, the MGNREGA program in India has attracted a good deal of attention for providing work to poor families in the country’s rural areas. The program guarantees paid employment for 100 days annually, and if no employment is provided, a cash benefit is paid. The scheme was launched in 2006 and was gradually extended to cover the whole country. Mutatkar (2013) notes that the program has created remunerative work for many poor rural families and is quite well targeted, focusing resources on the poorest communities and on women who are guaranteed a third of all places on the program. In fact, the enrolment of women exceeds this quota. However, although surveys show that the program is popular with rural people, operational and funding difficulties have hampered its effectiveness. In addition, many rural people are still unaware of their right to participate in the program. Although public works programs have also been introduced in other countries, their impact is mixed. Reviewing these programs in Africa, McCord (2012) finds that many are poorly managed and jobs are often allocated on the basis of patronage and family networks. Nevertheless, efforts are being made to improve their effectiveness.

Social protection programs also promote self-employment by providing resources for microenterprises. In addition to well-established microcredit programs such as those operated by the Grameen Bank and other nonprofits, studies show that many recipients of social protection use some of their benefits to establish small businesses. Nyanguru (2008) reports that many elders receiving the government pension in Lesotho use some of their pension income to acquire small livestock, which are then raised and sold at a profit. Similarly, Patel and Trieghaardt (2008) note that elders gathering to collect their pensions at rural distribution points in South Africa also take the opportunity to trade and sell agricultural and other goods generated by their pension income. These “pension day markets,” as they are called, also attract other traders as well as buyers and sellers and have become lively centers for business and social activity in many of the country’s deprived rural areas. In some countries, governments have encouraged the use of social assistance benefits to establish microenterprises. Queita (2003) reports that the Employment Assistance Program in the Philippines allocates social assistance funds to create cooperative enterprises among women who would otherwise be reliant on benefit payments.

Another way social protection promotes sustainable economic development is by fostering economic stability. It is widely recognized that volatile business cycles are economically harmful and, based on Keynes’ insights, many governments now use monetary and fiscal policies to counteract downturns and prevent the economy from overheating. Skidelsky (2009) points out that the Great Recession, which began the autumn of 2007, prompted the reintroduction of Keynesian remedies, which not only invested in infrastructural projects but also used unemployment and social assistance benefits to stimulate demand. The Chinese government pumped billions of dollars into the economy to counteract the effects of the Recession, while in the United States, the Obama administration combined infrastructural investments with cash transfers to unemployed and low-income families. Seniors receiving Social Security pensions were paid a one-time benefit of $250; this sum was distributed to more than 50 million pensioners and injected a sizeable amount of money into the economy. Grunwald (2012) shows that the Obama administration’s stimulus package, although disputed by many critics, contributed significantly to the country’s economic recovery and impressive decline in unemployment. On the other hand, Blyth (2013) points out that the failure to adopt countercyclical policies based on Keynesian principles resulted in high levels of unemployment and economic stagnation in some other Western countries.

Social Protection and Social Justice

Although social development is primarily focused on the practical ways of enhancing people’s well-being, Midgley (2014) points out that it has also been committed to social justice. However, this term is poorly defined, with the result that rhetoric rather than practical policy proposals tend to pervade the field (Fleischacker 2004). Nevertheless, many scholars adopt Rawls’ (1971, 2001) insights to define social justice as “fairness.” In this conception, social justice requires that people are treated equally under the law, enjoy full opportunities to realize their potential, and have equitable access to resources, education, employment, respect, and primary goods. The notion of fairness or equity also involves a redistributive process that favors those with the greatest needs and seeks, as the British social democratic writer Crosland (1956) suggested, to reduce the “distance” between those who are privileged and those who are disadvantaged.

It is regrettably obvious that few countries have achieved these ideals and that injustice characterizes societies all over the world today. Legal rights are flouted in many countries and discrimination is widespread. Dictatorial governments stifle democracy and deny their citizens the opportunity to participate in the political process. The oppression of women, ethnic minorities, and indigenous people is common, and slavery is still practiced in some parts of the world. Educational opportunities throughout the world are skewed in favor of elites, and income and wealth inequality have increased exponentially in recent years.

There is widespread recognition today that social protection should actively promote social justice. Indeed, social protection programs that meet this objective have recently been given high priority. The minimalist, safety net approach which provides meager, time-limited benefits to families in dire need is being replaced by programs that improve living standards among the population as a whole. Conventional social insurance programs are also being extended to cover more workers, including domestics and women in the informal economy (Pellissery and Walker 2007). These initiatives are strengthening the redistributive role of social protections and addressing discriminatory practices that have characterized some programs in the past. In this way, social protection seeks to achieve what Sabates-Wheeler and Devereux (2008) describe as a “transformative” function.

To fulfill this function, social protection should, as Drolet (2014) emphasizes, be a human right guaranteed by law and justiciable through the courts. However, not everyone has equal access to these programs; historically, social protection has discriminated against women and people living in rural areas who are not always aware of their rights and often have difficulty claiming benefits. Although many governments have acceded to human rights treaties that explicitly reference social protection, much more needs to be done to ensure that the right to social protection is fully implemented. The adoption of the Sustainable Development Goals is an important step since the extent to which social protection is available to all citizens will be internationally monitored, pressurizing recalcitrant governments to meet their commitments. On the other hand, it should be recognized that the right to social protection is legally enforceable in some countries where activists energetically assist claimants to secure favorable judicial rulings. One example is South Africa, where the courts have regularly intervened to ensure the right to social protection (Patel 2015).

To promote social justice, social protection should also redistribute resources equitably. Social protection programs involve resource flows which are often very substantial, and in countries such as China and India, where large numbers of people receive benefits, they redistribute resources on a huge scale. They also involve complex processes involving the flow of resources in multiple ways. Social protection may redistribute resources raised through taxation to people who do not pay taxes or, in the case of statutory pensions, redistribute resources from workers to retired elders. Similarly, conditional cash transfers direct resources to families with children, and many child allowance programs benefit women. However, studies of the redistributive impact of social protection reveal that social protection has not always been equitable. Many years ago, Midgley (1984) showed that social protection programs in many developing countries actually exacerbated inequality by directing resources to urban dwellers at the expense of the majority of the population. Similarly, conventional social protection schemes have historically discriminated against women (Holmes and Jones 2013); for example, Borzutzky (2002) exposed the extent to which women were disadvantaged by the privatized Chilean retirement system.

As these problems have been recognized, steps have been taken to enhance the egalitarian impact of social protection. A major development was the campaign launched by the ILO in 2001 to extend coverage to those traditionally excluded. More recently, the adoption of the Social Protection Floors Recommendation (No. 202 of 2012) by the organization’s member states urged the creation of national social protection systems that guarantee a minimum standard of coverage for all. The extension of coverage has been accompanied by policies that enhance the redistributive impact of existing programs. The reforms introduced by the Bachelet government in Chile addressed the blatant inequities of the privatized retirement system (Borzutzky 2012). In addition, equity is being promoted by innovative program such as conditional cash transfers. As a result of these developments, social protection is helping to reduce income inequality in some countries. Soares (2013) reports that income inequality in Brazil (as measured by the Gini coefficient) declined significantly between 1995 and 2009, not only because of economic growth and increased employment but also because of the country’s social protection programs. He calculates that, overall, these programs reduced income inequality by about 25%. Although Bolsa Família paid relatively small benefits, it accounted for a 14% decline in inequality. Reviewing studies from different countries, the ILO (2014) also found that social protection reduced income inequality, but it cautioned that the impact of these programs on inequality was not as strong as on poverty. On the other hand, some studies show no effect. For, example, Levine et al. (2011) found that income inequality in Namibia had not fallen as a result of the country’s social protection programs.

Social protection also promotes social justice by increasing opportunities to access to education, healthcare, and employment, all of which foster egalitarian ideals. Conditional cash transfers increase school enrolments among poor children, and other cash transfers that subsidize household income have a similar effect. Since pension and child benefits in developing countries are likely to be pooled with other sources of household income, children are no longer required to work, allowing them to attend school. Patel (2015) notes that by subsidizing the incomes of poor families, social protection in South Africa frees up resources for education, medical services, and small business investment. Also, by targeting mothers and carers, the Child Support Grant contributes to improved health and educational outcomes for women. A majority of the Grant recipients are women with children who are living on their own, with the result that it facilitates their autonomy and economic independence. However, as Holmes and Jones (2013) point out, increasing opportunities for women do not address the wider problem of gender inequity which continues to plague societies all over the world. For this reason, social protection needs to be viewed as just one component of a more comprehensive approach that fosters social justice for all.

Enhancing the Contribution of Social Protection

This chapter has shown that social protection is now an integral part of social development and that it contributes positively to achieving social development goals. However, as was noted earlier, much more needs to be done to improve the effectiveness of social protection. Administrative problems, funding limitations, policy inappropriateness, and other challenges impede the attainment of the objectives of social protection and need to be addressed. It is easy to get the impression from the literature that social protection has dramatically improved social well-being around the world, but many challenges still need to be met.

One of these challenges concerns funding. Although conditional cash transfers and similar social assistance programs currently consume a relatively small proportion of national budgets, issues concerning their long-term affordability have been raised by critics who believe that these programs harm economic development by fostering dependency and worklessness. Patel (2015) observes that, despite the popularity of social grants in South Africa, unfounded claims about their negative behavioral effects on recipients are frequently reported in the media. The Child Support Grant has even been criticized on the ground that young, unmarried women deliberately have children so that they can increase their income. Similarly, it is often alleged that young adults who could find work prefer to access social assistance instead. If these allegations are not vigorously challenged, there is a risk that they could undermine public support for social protection, resulting in budgetary reductions. This has already happened in some Western countries like the United States.

A related problem is that social protection programs in some countries are inadequately funded or that these programs do not reach their recipients. Ellis et al. (2009) observe that many community-based social protection initiatives in Africa are financed by international donors and nonprofit organizations on a time-limited basis, with the result that their long-term sustainability is in doubt. Another factor is that many governments fund their conditional cash transfer programs by borrowing from international agencies such as the World Bank, raising questions about their fiscal viability. Financial difficulties caused by adverse macroeconomic events also put pressure on social protection budgets. The recent economic crisis in Brazil has raised questions about whether funding for the country’s Bolsa Família program will be maintained. Funding difficulties also affect programs in countries with healthier economies. As mentioned earlier, Mutatkar (2013) reports that the MGNREGA scheme in India has encountered funding difficulties and that many families who are unable to secure employment under the scheme do not receive the cash payment to which they are entitled when work is not available, even though this is explicitly guaranteed by the program.

The problem is compounded when resources are siphoned off by politicians and administrative staff. Corruption can deprive people living in poverty of the benefits to which they are entitled, and some governments have sought to deal with this by imposing rigorous audits and independent reviews. Dutta et al. (2010) report that anticorruption initiatives in India have had some success but that it is still not unusual for claimants to pay what is euphemistically known as an “administrative fee” to staff processing their applications. Ellis et al. (2009) observe that this practice is widespread in some African countries, where local politicians and civil servants require payment of a “commission” from those submitting applications. In addition, a lack of administrative efficiency arising from a poorly paid and badly trained civil service hampers the effectiveness of many social protection programs. Many governments that were subjected to structural adjustment programs are still recovering from their devastating impact on the civil service, which can be decimated by budgetary retrenchment. Accordingly, claimants often wait many months for their applications to be processed, and this problem is exacerbated by misplaced records and other administrative problems. Although computerization is alleviating some of these difficulties, administrative challenges continue to hamper the effectiveness of social protection in many parts of the world.

Although some social protection initiatives like conditional cash transfers originated in the Global South and represent an indigenous response to social need, others were imported from Western countries, often with assistance from international organizations like the ILO and World Bank. Many social insurance programs in the Global South are based on ILO recommendations, while the World Bank has promoted commercially managed retirement accounts around the world. Since these and other types of social protection are often poorly suited to the economic, social, and cultural realities of the Global South, space needs to be made for approaches to begin to emerge from the ground up that meet the unique local needs. It is particularly important that policymakers explicitly address the issue of equity. It was previously mentioned that social protection often fails to promote social justice by redistributing resources or favoring urban workers over rural people or disadvantaging women. These problems must be resolved if social protection is to enhance the well-being of the world’s people.

Finally, the fragmentation of social protection in many countries needs to be addressed. Few governments have formulated comprehensive social protection policies that coordinate the schemes operated by different government levels and agencies, let alone the multiple projects introduced by nonprofits, international donors, grassroots organizations, and commercial providers. Consequently, problems of poor coordination, duplication, and fragmented coverage are widespread, impeding the effectiveness of social protection. This problem has been already been recognized by the ILO, which has urged the formulation of comprehensive social protection policies that integrate these different initiatives within a coherent system of provision. Similarly, the World Bank (2012, p. xv) has encouraged governments to adopt what it calls “a systems-oriented approach” that knits together a coherent portfolio of programs into a comprehensive national social protection plan. However, it is equally important that a national initiative of this kind be cognizant of wider social development policies and programs and that social protection be properly integrated with health, education, nutritional, community development, housing, and other social policies to promote social well-being and social justice for all.

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Copyright information

© Springer Nature Singapore Pte Ltd. 2020

Authors and Affiliations

  1. 1.University of CaliforniaBerkeleyUSA

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