Arup Banerji The World Bank Committee on the
Arup Banerji The World Bank Committee on the Recurrent Discussion of Social Protection, ILC: Geneva, June 3 2011
Context: The World Bank and Social Protection 3, 000 2, 500 major research and knowledge products, � operational innovations and technical support to country programs, � helping countries develop their social protection strategies/approaches, � helping to finance key interventions. World Bank currently working on Safety Nets 2, 000 Social Protection is key to this agenda, with Bank working through: . � 3, 500 Pension Reform 1, 500 1, 000 Labor Markets 500 Social Funds 0 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 Total SP&L Lending by Practice The World Bank works with governments in the developing and emerging world on policies and programs to reduce poverty and improve prospects for sustainable and inclusive growth. US$ million Over last three years (crisis), more than US$12 billion in loans and grants from Bank on social protection (4 times amount in the 3 years prior) Examples: Mexico Oportunidades program Pakistan nationwide social safety net system West Bank and Gaza cash transfers program Ghana on LEAP program Philippines 4 P conditional cash transfer program Ethiopia 3 rd Productive Safety Nets project.
Emerging Feedback from Clients: 3 During 2011 consultations on strategy
The “ 3 P” framework: A multi-dimensional approach 4 Prevention Insuring against the Impacts of Risk: Examples of programs: • Old age and disability pensions • Unemployment and disability insurance Protection Alleviating Poverty Destitution: Examples of programs: • Cash transfers • Food transfers • Public works programs Promotion Promoting Opportunities Examples of programs: • Skills training • Conditional cash transfers • Labor market intermediation and regulation reforms
The Challenge of Scattered Coverage 5 Low coverage, particularly in low-income countries Large variance across and within regions 5 8 7 5 19 7 1 23 7 9 20 14 35 22 80 8 69 SS Africa MENA 67 S Asia Social assistance + other 14 20 Only social assistance 29 Only social insurance No transfer 47 43 37 LAC E Asia ECA (% of households that Source: SP Atlas, World Bank receive)(forthcoming) (excludes remittances and subsidies)
The Challenge of Fragmented Programs Example: (Ministries) where cash transfer programs in Sub-Saharan Africa are based Source: World Bank, forthcoming 2011 Social welfare or related ; 35% Outside government, 45% Social security/ labor 9% Other; 4% Social Fund; 1% Education, 2% Health; 4% 6
Pensions (in Prevention) GENEROSITY The challenge of fragmentation in SP programs Civil Servants Security Forces SOEs Private Sector Social Pensions Social Assistance (in Protection) GENEROSITY LOW INCOME HIGH INCOME Fuel subsidies Food subsidies Public Cash works transfers Universal child benefits
The Challenge of Policy Coordination Across Multiple Sectors (Example: Skills Building and the STEP framework) (source: STEPping up skills for more jobs and higher productivity, World Bank 2010) 8 CCTs and nutrition CCTs and educatio n Active labor market programs (ALMPs) Risk mitigatio n ALMPs, labor regulations & social insurance Source: World Bank
Moving to systems yields multiple benefits 9 Equity Broader coverage of population and services Diversification and adaptation Smarter financing arrangements Economies of scale Incentive compatibility
Systems: Better social protection for the future Goal: Building the “nuts and bolts” sub-systems to provide one or more 3 P functions Low capacity contexts Few or no functional formal 3 P programs Goal: Improving efficiency and efficacy of each program, improving coordination Emerging capacity contexts Existing systems often fragmented, with limited capacity to coordinate Goal: Policy coordination to ensure efficiency, equity and incentive compatibility Better capacity contexts Well-functioning programs with aligned incentives and clear institutional roles
Each program has different sub-systems around it Institutional and governance arrangements (roles, rules and controls) Eligibility and Targeting mechanisms Databases and registries Cash transfer mechanisms Financing arrangement s HIGH INCOME GENEROSITY Fuel subsidies Social Assistance Food subsidies Cash transfers Public works Universal child benefits
Building systems for Social Protection and Labor Institutional and governance arrangements (roles, rules and controls) Building subsystems (“nuts and bolts”) Improving the efficacy and coverage of different systems Coordinating subsystems across similar programs Stretch goal: Policy coordination across different 3 P functions Eligibility and Targeting mechanisms Databases and registries Cash transfer mechanisms LOW INCOME Financing arrangement s HIGH INCOME GENEROSITY Fuel subsidies Food subsidies Cash transfers Public works Universal child benefits
Building systems for Social Protection and Labor Institutional and governance arrangements (roles, rules and controls) Building subsystems (“nuts and bolts”) Improving the efficacy and coverage of different systems Coordinating subsystems across similar programs Stretch goal: Policy coordination across different 3 P functions Eligibility and Targeting mechanisms Databases and registries Cash transfer mechanisms LOW INCOME Financing arrangement s HIGH INCOME GENEROSITY Fuel subsidies Food subsidies Cash transfers Public works Universal child benefits
Building Systems for Social Protection and Labor Institutional and governance arrangements (roles, rules and controls) Building subsystems (“nuts and bolts”) Improving the efficacy and coverage of different systems Coordinating subsystems across similar programs Stretch goal: Policy coordination across different 3 P functions Eligibility and Targeting mechanisms Databases and registries Cash transfer mechanisms LOW INCOME Financing arrangement s HIGH INCOME GENEROSITY Fuel subsidies Food subsidies Cash transfers Public works Universal child benefits
Building systems for Social Protection and Labor 15 Prevention Insuring against the Impacts of Risk: Examples of programs: • Old age and disability pensions • Unemployment and disability Building subinsurance systems (“nuts and bolts”) Improving the efficacy and coverage of different systems Coordinating subsystems across similar programs Stretch goal: Policy coordination across different 3 P functions Promotion Promoting Opportunities Examples of programs: • Skills training • Conditional cash transfers • Labor market intermediation and regulation reforms Alleviating Poverty Destitution: Examples of programs: • Cash transfers • Food transfers • Public works programs Protection
Towards an agenda for donors and partners on building systems Help finance and build “nuts and bolts” of systems in poorer countries Coordinate explicitly with others so that different donors don’t support different country subsystems Consolidate any new programs with the best sub-systems being used for other programs Seek sustainable systems rather than pilots that have little followup plans by governments
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