overview - social protection
TRANSCRIPT
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Yanchun Zhang/AI. BlateauUNDP
Mitigating Vulnerabilities & Promoting Resilient Growth
Sequencing, Cost-Efficiency and Fiscal-Sustainability of Social Protection – Policy Dialogue
Seoul, Korea, 1 November 2012
Sequencing, Cost-Efficiency and Fiscal-Sustainability of Social Protection:
An Overview
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Outline
I. Motivation
II. Sequencing
III. Cost Efficiency
IV. Fiscal Sustainability
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I. Motivation
SP is increasingly recognized for its productive role;
Faster economic growth in developing countries makes social protection more affordable;
Many questions remain to be answered to link theory to practice.
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II. Sequencing of SP
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SP Arrangements
Informal SP: family/kinship
Semi-formal SP: CSOs, NGOs, mutual aid arrangements
Formal SP: public, private, hybrid
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Informal-Semiformal SP arrangements limitations
Inadequate protection : potential collapse; too small payouts
May exclude poorest or discriminate certain social groups
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Triggers
Internal triggers: Change of political or economic context within the country Rapid economic and income growth Democratization Post-conflict
External triggers Economic crises Climate change
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III. Cost-Efficiency of SP
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Cost-Benefit Analysis
Cost-efficiency vs. cost-effectiveness
Direct and indirect costs
Direct and indirect benefits
Cost benefit analysis
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Costing Tools
ILO (2008): 7 sub-Saharan African countries, 5 Asian countries
HelpAge International (2011): 50 low- and middle-income countries
WHO (2010): 49 low-income countries Save the Children (2009): 57 developing
countries UNICEF and ODI (2009): 5 West African
countries
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SPF Costing Tool and RAP
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Benefits
Brazil’s Bolsa Família
South Africa’s grant (including the old-age pension, disability grant and child support grant)
India’s Mahatma Gandhi National Rural Employment Guarantee Act
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IV. Fiscal-Sustainability of SP
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Fiscal Space and Fiscal Sustainability
A fiscally sustainable social protection system is the one that does not undermine a government’s overall fiscal position and underlying trends in the medium- and long-term.
Fiscal space is the available budget room that a government can use to spend on a desired purpose
Fiscal space and fiscal sustainability are two related concepts.
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A Dynamic and Comprehensive Framework
A dynamic approach is needed because many types of social protection expenditures require not only some budgetary room today but also the availability of future budgetary resources.
A comprehensive approach is needed because fiscal space created for social protection may immediately or ultimately crowd out spending on other programmes.
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Practice of Social Protection Fiscal Sustainability Analysis
Viet Nam
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Create Fiscal Space
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El Salvador
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Mozambique
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Thailand
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Financing options
Economic growth leading to Increasing tax revenues Improving revenue collection Reallocating expenditures Increasing spending efficiencies & reducing leakages Introducing innovative financing mechanisms Increased aid & transfers Borrowing Debt restructuring
Key factor : political will
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Conclusion
Connecting the dots between vulnerability assessment, costing exercise, fiscal space evaluation and benefits simulation.
Embedding SP in a national development strategy Public support; Political will; Public-private partnerships; Scaling up formal SP while engaging existing schemes.
The government needs to play the leading role to set the legislative and regulatory framework for other SP providers to thrive and to contribute to more equal societies, more security for people, more stable and inclusive growth.
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