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What is Social Protection?

December 9, 20211 CommentResearch Viewed : 686

Author:

Dvara Research
Anupama Kumar

At Dvara Research, we envision a world in which every low-income household and every enterprise has complete access to suitable financial services and social security through a range of channels that enable them to use services securely and confidently. Financial services can help households fully utilise their human and financial capital (Rai, Ananth and Mor, 2013),  but they can only go so far. To use financial services effectively, households must have the capacity to meet their basic needs, weather major financial shocks and stay out of poverty. 

This is where social protection comes in. The Social Protection Initiative expressly recognises the link between poverty and social protection. We aim to enable households to climb out of, and stay out of poverty and to address vulnerabilities across the lifecycle of each individual. Since SPI was launched in 2019, we have studied questions ranging from the design of India’s welfare system to the delivery of cash benefits at the last mile to insurance against specific kinds of shocks. We locate our work within three key themes – designing universal and comprehensive social protection, activating missing insurance markets and facilitating last-mile delivery of benefits.  

Through our work within these themes, we have been confronted with some difficult questions on where the boundaries of social protection lie. A simple, social insurance model is too narrow to encompass our work. Various actors are involved in addressing vulnerabilities of low-income households, from the government, to financial services that enable savings and credit, to commercial insurance providers, to even providers of services such as skills training or public infrastructure. Where do these fit in within the broader ambit of social protection? For us, as a policy advocacy and research organisation, where do we believe that we can contribute to social protection most effectively? We believe that we are well-placed to answer this question at this point in time, when we have had the opportunity to examine various facets of social protection, and how they relate to other financial services.  

This series of posts will attempt to do two things – first, to examine the definitional boundaries of social protection and where they relate to other financial services for low-income households, and second, to use this to arrive at a working definition of social protection for policymakers and research organisations such as Dvara Research. As a first step, we break down this question as follows: 

  1. What should social protection comprise?: We look at this question from a policymaker’s point of view and ask, how should policymakers decide what a social protection framework should comprise. This question can be broken down into two components — first, what goods and services comprise social protection, and second, what forms should these goods and services take? 

The ILO provides some guidance on the first of these questions. The ILO Social Protection Floors Recommendation, 2012 (No. 202) provides definition of a minimum social protection floor as including access to “a nationally defined set of goods and services” and basic income security. But what would this nationally defined basket include? Recommendation 202 refers to an earlier ILO instrument, the Social Security (Minimum Standards) Convention, 1952 (No. 102), as containing a set of standards that member nations should aspire to. Are the nine specific benefits listed in Convention 102 — which include old-age, employment injury, maternity and several other specific benefits — sufficient to provide universal and comprehensive social protection against all the risks that households face? 

Further, is it enough for social protection to simply protect against risk — and what does this mean for the national minimum basket of goods and services? Guhan (1994) argues that it is not. Instead, he locates social protection for developing countries should take an anti-poverty approach, and proposes a 3P framework for social protection, comprising promotional, preventive, and protective measures. This 3P framework forms the basis of the World Bank’s Social Protection & Labour Strategy for 2012-2022. What do each of the 3Ps comprise? Would public utilities, such as education facilities, publicly funded healthcare facilities or public transport, fall within the ambit of social protection? 

  1. What is a nationally appropriate social protection floor?: The ILO Social Protection Floors Recommendation, 2012 (No. 202) and the Sustainable Development Goals Resolution, 2015 both refer to “nationally appropriate social protection floors.” The instruments both recognise that states have limited fiscal capacity and that social protection nets would look different in each country. But on what basis should states determine what is nationally appropriate? For instance, Peter Townsend’s report on poverty in the United Kingdom in 1979 argued that poverty ought to be measured in terms of relative deprivation — in other words, some people might qualify as poor, if they  “lack  the  resources  to … participate in the activities and have the  living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong.” However, many countries struggle to reduce even simple headcount poverty (Fiszbein, Kanbur and Yemtsov 2013). How should different nations set goals for their social protection systems? How would this vary based on their fiscal capacity? Further, if public utilities qualify as social protection measures, how do governments allocate resources between public utilities and private benefits? 
  2. What is the link between work, wages and social protection?: Work is closely linked to social protection. The ILO’s conception of social protection includes both contributory and non-contributory measures while creating economic opportunities is an essential part of the World Bank’s 3P framework. How should the minimum wage be calculated, and how should wages factor in contributory social protection benefits? In countries with large informal workforces, such as India, what types of social protection should the state extend to those who are employed outside the formal, salaried sector? What types of protections should be available only to those who cannot work and not to those who are in gainful employment? 

  1. Should social protection have a transformative role?: Devereux and Sabates-Wheeler(2004) argue that it is not enough for social protection to protect against economic risk, but that it must also address social vulnerability in other words, social protection must play a transformative role. They argue that poverty and deprivation are also caused by social deprivation, such as belonging to a minority community. But to what extent should social protection play this role? Are measures such as anti-discrimination laws within the ambit of social protection — and ought they to be part of a social protection floor?  
  2. Does the private sector have a role in providing social protection?: We agree with the ILO Social Protection Floors Recommendation, 2012 (No. 202) that national social protection floors should be funded by the state. But does this mean that the private sector has no role in social protection? Low-income individuals and households routinely use various privately funded financial mechanisms as both safety nets and springboards (Collins et al. 2009). What is the space available, if any, to private players in providing social protection? How do privately funded financial services fit within the broad ambit of social protection?  

Equally, what is the impact of private players on social protection for everyone else? Behrendt and Nguyen (2019) raise the question of what impact an increase in private insurance mechanisms would have on risk pooling in social insurance. Likewise, what is the impact of private healthcare or education on publicly funded facilities?   

This is by no means a comprehensive list of questions on what social protection ought to comprise; nor do we claim to have perfect answers to these questions. Rather, our goal with this blog post series is to arrive at a working definition of social protection for policymakers and those interested in finance for low-income households. Subsequent posts in this series will aim to answer these questions, and we hope that this will begin a fruitful conversation on the contours of social protection in India. 


Cite this Item:

APA

Kumar, A. (2021). What is Social Protection? . Retrieved from Dvara Research.

MLA

Kumar, Anupama. “What is Social Protection? .” 2021. Dvara Research.

Chicago

Kumar, Anupama. 2021. “What is Social Protection? .” Dvara Research.

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1 Comment
  1. Reply
    December 10, 2021 at 11:25 am
    Misha Sharma

    Thanks for writing this, Anupama. A much needed piece and looking forward to the second post in this series. It is very important to recognise that adoption and usage of formal financial services can improve only when households and individuals have the right socio-economic context that enable them to tap into their potential. This context can be achieved with a social protection design that should include access to education, employment opportunities and healthcare, at the very least!

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