The article discusses strategies to extend social security coverage
in developing and newly industrialised countries. The three
major options are to
extend social insurance coverage
, to rely
on
mutuals or micro-insurance
or to bring in
social assistance
in one form or another. Social insurance usually covers small
population segments. Insiders are seldom willing to extend
coverage to poorer groups, as poorer groups are usually higherrisk
groups. Micro-insurance and mutual societies work primarily
among people with similar risk profiles. Discretionary
social assistance targets poorer groups, but is open to
patronage and misuse. However, some social assistance
designs are less open to misuse than others. Demogrants, i.e.
benefits given to people in vulnerable social categories, are
easy to administer and difficult to misuse. Whether or not a
developing country provides such benefits can be considered
an indicator of the willingness of the ruling elite to alleviate
hardship among ‘unproductive’ population groups.