Social Protection The Role Of Cash Transfers

Author: Dag Ehrenpreis

Year: 2006

Category: Corporate Reports

Abstract

T he UN Millennium Development Goals address many dimensions of extreme poverty – including penury, hunger, disease, analfabetism and inadequate housing – while promoting gender equality and environmental sustainability. Poverty reduction is the result of several interacting factors, including importantly: redistribution of incomes, assets, and opportunities; pro-poor economic growth; and social provision and protection. This issue of IPC’s journal Poverty in Focus highlights the importance of social protection in the struggle against global poverty. Inequality reduction and pro-poor growth will be the theme of the next issue. Social protection aims to enhance the capacity of poor and vulnerable persons to manage economic and social risks, such as unemployment, exclusion, sickness, disability and old age. Policy interventions can improve their well-being by, among other things, moderating the impact of shocks causing sharp reductions in their income or consumption. Social protection and provision can also enhance the productive capabilities of poor men and women, reducing poverty and inequality and stimulating pro-poor growth. Like other policy areas, social policies involve choices and priorities, for example between mere social safety nets and promotion of sustainable livelihoods, short term alleviation and long-term elimination of poverty, universal and targeted programmes, conditional and unconditional schemes, food and cash transfers, etc. Criteria must be set for selecting which households, and who within them, should receive the benefits. If schemes are conditional, then on what: participation in education, health, nutrition and/or work programmes? Is such participation by the poor and needy in fact constrained by demand or supply factors? Can institutional and management capacity cope effectively? These are some of the issues policy planners need to consider, and this Poverty in Focus journal covers many of them. The first article discusses the basic social policy choice of targeting vs. universalism, i.e. whether social benefits are a basic right for all citizens or only for the truly needy and deserving. Policy regimes are usually somewhere between these two extremes, but where they lie on this continuum can be decisive in spelling out individuals’ life chances and in characterizing the social order. Then, a broad view of social protection for the poorest is presented, which envisages social protection as having both short- and long-term roles in poverty reduction; several illustrative project and programme examples are presented and then highlighted in text boxes throughout the journal in their regional context. In South Africa, a proposal for a universal income grant has engendered an intense debate. The implications of such a scheme are analysed in the following article, including both poverty reduction outcomes and the macro-economic feasibility. This is followed by an article summarising an IPC study of conditional cash transfers in 15 African low-income countries, and a presentation of an unconditional cash transfer pilot scheme in Zambia. The next region in this journal is Asia, where two new Indian laws guarantee employment for all poor households as well as the right to public information for full transparency; furher, a pilot programme targeting the ultra-poor in Bangladesh shows promising results. Then, the journal highlights the current trend in Latin America towards targeted and conditional cash transfers. Although homegrown and originated with domestic funding, these programmes have received enthusiastic and substantial support from the international community, and they are being promoted elsewhere. What are the challenges and lessons from this region and are they transferable? Another domestic model is provided by the targeted and comprehensive Chile Solidario programme. Finally, there is a bilateral donor representative’s view of the role of social protection with cash transfers in promoting pro-poor growth and poverty reduction; also how donors are working together with developing country partners for providing more effective support towards this end. We hope you will find this issue of Poverty in Focus useful and stimulating

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