Cover page of an ACT Alliance EU briefing paper from September 2021 on the role of social protection in fostering self-determined human development and addressing inequality.
Policy Paper

Social Protection as a basis for self-determined human development

The transformative potential of social protection

To build back better after the COVID-19 pandemic to a new and different normal, providing a solid ground for self-determined development for every member of society, rights-based and gender-responsive social protection, universal health coverage, access to education for all, and decent work are of crucial importance. Taken together, these ingredients are among the most important means to generate transformative potential and to reduce inequality and end poverty in all its dimensions. Adequately designed social protection policies do not only reduce monetary poverty. The evidence shows that social transfers are also associated with a reduction in child labour and rising school attendance, increased use of health services, and an improved diet.

Social protection and access to public services of appropriate quality can overcome exclusion processes and the vicious cycle of the intergenerational reproduction of poverty and inequality. They create the basic conditions that make participation in social, economic, and political life possible and reduce inequality of opportunities. Social protection spending should be regarded as an investment, as it also pays off economically, especially in low-income countries. It creates significant multiplier effects for the local economy and consequently contributes to economic development in the long term.

Strengthening resilience through social protection

In times of crises, social protection systems enable states to react quickly and mitigate negative social impacts on individuals and society. For example, by crisis-related expansion and adequate adjustment of social protection programs. The mechanisms of action through which social protection programs can mitigate disasters’ impact range from safeguarding health and livelihoods at the moment of a crisis to contributing to prevention and promoting crisis resilience and supporting longer-term transformation processes. In the best-case scenario, the interplay of the different social policy sectors can lead not only to an immediate reduction in vulnerability but also to more comprehensive social, economic, or political changes.

When the world financial and economic crisis in 2007/2008 showed how important stable protection systems are to mitigate and overcome crises, the ILO, together with the World Health Organisation (WHO), launched the Social Protection Floor Initiative, which found expression in ILO Recommendation 202 (2012). ILO member states and social partners unanimously adopted this recommendation to guarantee access to basic medical care and a minimum level of income security for all inhabitants in a first step, and continuously develop more comprehensive protection programs to complement the ODI, Cash Transfers: what does the floor. The international community of nations reiterated the commitment and included social protection floors explicitly in Agenda 2030 (Target 1.3).

Addressing global gaps

However, gaps worldwide are still large, especially in low-income countries. The fatal consequences have been made visible by the Covid-19 crisis. Hunger and poverty were exacerbated, existing inequality has deepened, and resilience to future crises is even further weakened. Despite an impressive number of social protection measures that have now been additionally taken in the context of the Covid-19 crisis, these have also fallen far short of securing all people. While high-income countries invested an average of US$ 695 per person in social protection, the average in low-income countries was US$ 46.

In spite of reiterated commitments of states and the international community, ODA directed to these fields has also been comparatively low, and gaps to build up at least universal health coverage and universal social protection floors are still large, especially in low-income countries. The EU and member states must support efforts to accelerate progress in building universal health coverage and universal social protection floors in low-income countries and thus improve global disaster preparedness.

Social protection, health, education, and decent work policies are key instruments not only for fighting poverty and inequality but also for promoting social cohesion. When delivered in a way that people perceive as fair and reliable, social protection and public services will contribute to building trust and the social contract that makes the citizens prepared to pay the taxes needed to sustain the services. Progressive taxation and the solidarity principle of social policies help to move the wealthy and society at large to take responsibility for the common good.

UN and CS call for a Global Fund for Social Protection

Building on their own experiences of the significance of social protection, the EU and member states should support the establishment and funding of a Global Fund for Social Protection. Such a fund was proposed by the UN Special Rapporteur on extreme poverty and human rights at the Human Rights Council in June 2021. Also, in June 2021, the International Labour Conference (ILC) called on the ILO to “engage in discussions on a new international financing mechanism, such as a Global Social Protection Fund.”

Social protection is primarily a responsibility of national governments. They can expand the fiscal space for social protection through various methods such as domestic resource mobilisation, budget reprioritisation, and fighting illicit financial flows. However, major financing gaps for social protection persist, with challenges for some governments to invest in adequate national social protection systems. Alongside the national responsibility, there is also a need for and duty of international solidarity.

The Fund should increase the level of support to low-income countries, thus supporting their efforts both to establish and maintain social protection floors in the form of legal entitlements and to improve the resilience of social protection systems against shocks. In the words of the UN Special Rapporteur on extreme poverty and human rights: The proposal for a global fund for social protection is not that taxpayers from rich countries pay for social protection in poor countries. It is, rather, to kick-start a virtuous cycle in which international support matches domestic efforts and contributes to capacity-building in low-income countries.

How to do it at the country level

When supporting investments in quality public services and social protection, the EU and member states should adhere to international standards and guidance on national social protection floors and the human right to social security, particularly ILO Recommendation 202 (2012) and ILO Convention 102 (1952). Initiatives must contribute to the reduction of inequality, foster social cohesion, and gender equality, and be human rights-based, which means they must be inclusive, non-discriminatory, and anchored in national law as soon as possible. These initiatives should be developed through social dialogue at the national level, including civil society organisations (CSOs) and faith-based organisations (FBOs).

One of the key design choices concerns targeting: Who should be included in individual programs, and how are beneficiaries identified? Poverty-targeted social protection/safety net programmes supported by development partners are common, often motivated by limited financial resources or cost-efficiency. However, poverty targeting is not pro-poor; methods for selecting the “most needy” are often inaccurate, leading to the exclusion of intended target groups. Non-poor informal workers are generally excluded from poverty-targeted social programs, leaving them without protection during crises. Means-tested systems are more costly, may lead to stigmatisation, and are prone to misuse and corruption. Benefits in targeted social programs tend to be lower than in broader programs.

Universal social protection is essential to fulfil the Agenda 2030 commitment to “leave no one behind”. Universal social protection means it is available to anyone who requires protection, with systems being adequate, comprehensive, and sustainable. In June 2021, ILO member countries reaffirmed their commitment to building and maintaining universal social protection systems. Developing categorical programs for vulnerable phases in life, such as childhood, sickness, parenting, ageing, or unemployment, is the best way to ensure universal access to protection. Universal systems contribute to strengthening the social contract, are more popular and legitimate among the public, and have more sustainable financing.

EU and member states can play a crucial role in supporting initial investments in building capacity and systems, including formalising the informal sector and involving CSO actors in consultation processes. The focus should be on designing systems that promote the social contract and are funded at the national level, requiring buy-in from the Ministries of Finance.

The use of targeted cash transfers is increasing in humanitarian aid, but it is essential to avoid establishing permanent “poor relief” safety nets based on imprecise targeting. Instead, such support should be part of a process towards rights-based, universal, and gender-responsive social protection systems based on individual entitlements.

Considering the gradual expansion of universal old-age pensions and child benefits is also valuable, as research shows that this combination could reach around 90 percent of the population across various countries in Asia, Africa, and Latin America.

Statistical databases and registries are indispensable for implementing social protection schemes and systems. Birth certificates, identity cards, civil registries, and single registries are crucial examples. However, so-called social registries should not be supported, as they generate high levels of exclusion errors in multiple schemes and are incompatible with the approach to building universal social protection systems.

Examples of promising social protection support programmes

Capacity building for system building

From 2016 to 2018, strategic capacity building and technical support were provided to the Government of Kenya. This support encompassed the analysis of existing programs and challenges, and training of key staff and decision-makers, including those at the Ministry of Finance. Additionally, assistance was extended to Kenya’s Social Protection Secretariat in developing strategic documents and plans.

Throughout this process, the Inua Jamii Senior Citizens’ Pension emerged as a pivotal component of the government’s electoral platform. As of 2018, a universal pension has been made available for all older persons over 70. This achievement marked a significant milestone. Post-2018, the Government of Kenya remains committed to advancing a comprehensive and inclusive life cycle social protection system.

The capacity-building interventions during this period received support from Sida (Sweden) through UNICEF and WFP, reflecting the collaborative efforts of various stakeholders in enhancing Kenya’s social protection landscape.

EU Action Programme ‘Synergies in Social Protection and Public Finance Management’

The European Commission is currently funding a global program aimed at strengthening national social protection systems. This initiative involves technical support, explorative research, and capacity development, with a specific focus on public financial management systems, budgeting, and financing of social protection. The program is being implemented in eight countries: Angola, Ethiopia, Burkina Faso, Uganda, Senegal, Nepal, Cambodia, and Paraguay. Besides the involvement of the International Labour Organization (ILO) and UNICEF, civil society actively participates in the design, steering, and implementation of the program in four countries: Cambodia, Nepal, Senegal, and Uganda.

The primary goal of the program is to assist governments in expanding their national social protection systems through activities that strengthen systems, promote effective and evidence-based budgeting processes, and ensure inclusivity. The Global Coalition for Social Protection Floors, a civil society network, plays a crucial role in empowering national civil society organisations. Their objective is to enable meaningful participation in national social protection dialogues, amplify the voices and concerns of communities and beneficiaries, and build capacities for engaging in discussions with governments on social protection design, financing, monitoring, and social accountability.

Enhancing life-course social protection systems

The program supports governments in expanding or refining life-course social protection measures, considering their financing basis and redistributive effects. This involves taking into account the broader demographic, strategic, economic, and fiscal context within which these measures are implemented. Expected improvements include enhancements to legal, policy, fiscal, and macroeconomic frameworks through various stages, such as coverage expansion, alignment, and better coordination of sectoral social protection instruments. The integration of the social protection system with other development interventions is expected to broaden coverage further and increase the longer-term resilience of beneficiaries. For a country-owned social protection system to achieve its full potential, it must be developed and regularly revised in harmony with national fiscal, health, education, employment, and economic policies.