United Nations Research Institute for Social Development Inequality

United Nations Research Institute for Social Development Inequality and Social Policy: Universal Access vs. Targeted Interventions Katja Hujo 10 May 2012 NORAD Exploring the Policies on Equity 1

Presentation • Why inequalities matter for social development and poverty reduction • Social policy – universalism vs. targeting • The Unicef equity approach 2

Inequalities are an obstacle to poverty reduction Ø Poverty is closely related to inequalities based on class, gender, ethnicity, location Ø Interlocking inequalities reinforce each other and may be reinforced by market processes Ø make it harder to incorporate the poor in the growth process; Ø May encourage the emergence of institutions that lock the poor into poverty traps Ø limit the size of the domestic market and prospects for sustained growth; Ø may contribute to crime, social unrest and conflict and undermine social cohesion and stability 3

Addressing inequalities Countries can adopt a number of redistributive policies to tackle the multiple dimensions of inequality, for example: ü provide the poor with greater access to productive assets and credit ü strengthen legal rights (eg tenure) ü pursue affirmative action policies within a universal framework; ü invest in social infrastructure and basic services that can reduce the drudgery of domestic work; ü stimulate investment in rural infrastructure and creating public works programmes; ü improve tax administration, prevent tax evasion, and limit opposition to progressive taxation; ü create a stable global economic environment that responds to the needs of low-income countries. 4

Social policies Comprehensive social policies are essential for successful poverty reduction. Ø The most significant reductions in poverty have occurred in countries with comprehensive social policies that lean towards universal coverage. Ø Such policies also reduce inequality, generate social cohesion and solidaristic links between different groups (income, ethnic, gender, generations), increase accountability and contribute to economic development Ø Important: progressive financing instruments, quality of public services and benefit adequacy for income transfers, additional targeted interventions for groups without access to schemes (within universal framework) 5

The shortcomings of targeting • « It is not rational to target the poor where a majority of the population is poor and administrative competencies weak» • Targeting « Technology » : costly, difficult to implement, inclusion/exclusion errors, under-coverage, stigma, distortion of incentives, segmentation of systems, separation of poor from other social classes (negative for political, budgetary support, accountability), risk of corruption etc. • Challenges of community involvement: power relations, sustainable resources, quality of services, sustainability…. 6

The Unicef equity approach – which role for social policy? • Unicef mandate grounded in rights-based framework (Convention of the Rights of the Child, Human Rights conventions) • Useful to emphasize the intrinsic and instrumental value of SP and child-oriented policies • What are the key ingredients of an equity-focused approach? Equity focuses more on opportunities (fairness) than on equality of outcomes – primary concern regarding children is with outcomes! • Challenge of getting the balance right: targeted interventions (often aid financed) part of universal, comprehensive framework (largely state financed)? • Who guarantees long-term investments in poverty reduction: donor community, UN organizations, national governments? • Combine project interventions with advocacy, rights-based approach at the policy level 7

About UNRISD is an autonomous research institute within the UN system, established in 1963, and located in Geneva. Its mandate is to undertake policy-relevant research on issues of contemporary social concern and aligned with UN priorities. Follow UNRISD work on www. unrisd. org and on 8