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The meaning of "social safety nets"

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Journal of Asian Economics 19 (2008) 467–473

Contents lists available at ScienceDirect

Journal of Asian Economics

The meaning of ‘‘social safety nets’’

Srawooth Paitoonpong a, Shigeyuki Abe b,*, Nipon Puopongsakorn a
a
Thailand Development Research Institute, Thailand
b
Doshisha University, Karasuma-Higashi-iru, Imadegawa-dori, Kamigyo-ku, Kyoto, 602-8580, Japan

A R T I C L E I N F O A B S T R A C T

JEL classification: In Southeast Asia, the issue of ‘‘social safety nets’’ (SSNs) has emerged more prominently
I 38 since the financial crisis. Despite the increased interest in social safety nets, there is still
considerable confusion among scholars and national and international organizations
Keywords: regarding the use and meaning of the term. This article considers the different definitions
Safety net of the term—particularly as it was used during the Asian Financial Crisis—and to attempt to
Asian Financial Crisis clarify its meaning and proper use.
Poverty The safety net analogy is drawn from high-wire walkers who are protected by a safety
net if they fall. The safety net prevents any walker who falls—unexpectedly or not—from
hitting the floor and incurring catastrophic injuries. Following this line of reasoning, it is
not surprising to learn that some organizations and scholars use the term SSN such that it
encompasses private and public mechanisms that assist individuals in maintaining a
minimum level of consumption.
The term ‘‘social safety net’’ (SSN) began to be used by Bretton Woods’ institutions in
connection with structural adjustment programs related to their lending programs.
Developing countries introduced SSNs to mitigate the social impact of structural
adjustment measures on specific low-income groups. They were initially formulated to
serve three objectives: poverty alleviation, to make adjustment programs more politically
acceptable, and institutional reform. During the Asian Financial Crisis, there was a great
deal of confusion regarding the content and consequent identification of SSN programs.
Public SSN programs can be classified into formal and informal safety nets. Formal and
informal safety nets are, generally, distinguished by law enforcement: formal safety nets
are those which legally guarantee individuals access to economic or social support
whereas informal safety nets provide likelihood of support to individuals to assure them of
attaining or remaining above the designated minimum standard of living but with no legal
guarantee.
Informal SSNs can be divided into private and public ones. Examples of private informal
SSNs include transfers from family members, friends, neighbors and community members
and institutions, including NGOs, while those of public informal SSNs refer to the support
which individuals can hope for from the government, through programs which generate
assets or employment, transfer income, or provide basic social services, as a means of
helping affected individuals from falling below the designated minimum standard of
living. The difference between formal and informal public SSNs is whether there exists a
formal legal support of the assistance.
The article has provided more discussion on the definitions of SSN used by the World
Bank, ESCAP, ILO and TDRI.
In conclusion, the authors note that the tremendous variation in the use of the term
invites confusion and makes it virtually useless as a technical concept. The very nature of

* Corresponding author. Tel.: +81 75 251 3460.

E-mail address: sabe@mail.doshisha.ac.jp (S. Abe).

1049-0078/$ – see front matter ß 2008 Elsevier Inc. All rights reserved.
doi:10.1016/j.asieco.2008.09.011
 Author's personal copy

468 S. Paitoonpong et al. / Journal of Asian Economics 19 (2008) 467–473

the metaphor invokes a vision of a large net that encompass a number of different types of
programs. In many cases it is not even possible to list specific programs that are included,
as the particular forms of these programs could, of course, vary with place, time and
circumstances. Complicating things further, the term is sometimes used in a very narrow
sense. Given the low probability that usage of the term will ever be standardized,
economists and national/international organizations might be well served by avoiding
the term completely and instead using its component parts.
ß 2008 Elsevier Inc. All rights reserved.

1. Introduction

In Southeast Asia, the issue of ‘‘social safety nets’’ (SSNs) has emerged more prominently since the financial crisis.1 In fact,
in order to receive aid from the IMF, the World Bank and the Asian Development Bank, the crisis countries specified (via their
letters of intent) a set of policies that gave due consideration to the social impacts of the crisis.2 In 1997, formal social
protection and social safety nets measures provided by governments covered only around 10% of the population in Asia
(Cook, Kabeer, & Suwannarat, 2003, p. 14). Despite the increased interest in social safety nets, there is still considerable
confusion among scholars and national and international organizations regarding the use and meaning of the term. Our
purpose is to consider the different definitions of the term – particularly as it was used during the Asian Financial Crisis – and
to attempt to clarify its meaning and proper use.

2. Definitions and conceptual framework

The safety net analogy is drawn from high-wire walkers who are protected by a safety net if they fall. The net reduces the
chance of injury if the walker falls, and many walkers also carry long poles which help them maintain their balance and
prevent falls. The net and the pole represent observable actions that reduce the walker’s risk of falling and of an injury from a
fall. The net is a club good, as it is excludable, yet can provide non-rival risk reduction services for several walkers
simultaneously walking above the net. However, neither the net nor the pole offers insurance to the walker, as their use does
not trigger compensation or services if the walker falls and is injured.
The safety net metaphor does not transfer very well from the circus to the society, as the term ‘‘social safety net’’ usually
carries some connotations of insurance. We typically think of a worker who unexpectedly is laid off or becomes ill and
receives some type of payment from a government-sponsored or employed-sponsored ‘‘social safety net’’ fund to
compensate for the loss of income or medical costs incurred.
The safety net used by high-wire walkers could be viewed from another perspective: it prevents any walker who falls –
unexpectedly or not – from hitting the floor and incurring catastrophic injuries. Following this line of reasoning, it is not
surprising to learn that some organizations and scholars use ‘‘social safety net’’ to encompass private and public mechanisms
that assist individuals in maintaining a minimum level of consumption.
Vivian (1994) maintained that in the early 1990s, the term ‘‘social safety net’’ began to be used more frequently, especially
by Bretton Woods’ institutions in connection with structural adjustment programs related to their lending programs.
Developing countries introduced SSNs to mitigate the social impact of structural adjustment measures on specific low-
income groups. They were initially formulated to serve three objectives: poverty alleviation, to make adjustment programs
more politically acceptable, and institutional reform (Vivian, 1994; Wickramsekara, 1999, p. 3).
During the Asian Financial Crisis, there was a great deal of confusion regarding the content and consequent identification
of SSN programs. Agencies such as the World Bank changed their SSN definitions over time. During the Crisis, the World Bank
defined SSNs very broadly and even included social insurance within the SSN umbrella. ESCAP (1999) adopted a similar view
while maintaining that the term should not encompass anti-poverty programs. Jimanez (1999) distinguished between
formal and informal safety nets, with the latter being more difficult to identify and their contributions being more costly to
measure. By contrast, the International Labor Organization (ILO) used a narrower definition of SSNs. Social insurance systems
financed by contributions from employers and workers did not strictly fall within the ILO’s SSN framework. The ILO
maintained that ‘‘the social safety net[s] is a government-provided anti-poverty benefit’’ (Gillion, Turner, Bailey, & Latulippe,
2000, p. 465).3

1
Wickramasekara (1999, p. 3) also noted that the concept received increasing recognition during the Asian economic crisis. For example, the Association
of Southeast Asian Nations (ASEAN) adopted an action plan on social safety nets and established an ASEAN Task Force on social safety nets in 1998; the
ICFTU/APRO convened a regional workshop on social safety nets during 28 July–1 August, 1998 in Manila, the Philippines and made submissions on the
issue to governments and international agencies. To be sure, prior to the crisis, in the 1980s, the World Bank and the IMF had made structural adjustment a
condition for developing countries to receive or to continue receiving loans on concessional terms. The adjustment included cuts in the social component of
the national budget, including subsidized items for mass consumption. Most observers understood that these adjustments would adversely impact
numerous vulnerable groups, and social safety nets were established to compensate, at least partially, for such impacts (ESCAP, 1999, pp. 2–3).
2
For example, the Fifth Letter of Intent submitted by Thailand to the IMF in 1998 (Bank of Thailand, 1998).
3
definition, in the context of retirement income, includes means-tested and income-tested benefits for low-income elderly and universal flat-rate
benefits that are primary designed as anti-poverty benefits.
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S. Paitoonpong et al. / Journal of Asian Economics 19 (2008) 467–473 469

Table 1
Income sources for elderly aged 60 and older in selected countries, 1996.

Income source Percent of specific income source in main income

Japan U.S.A. Thailand Korea Germany

Work 21.6 15.5 26.9 26.6 4.6

Public pensions 57.1 55.5 7.3 2.9 77.0
Private pensions 1.7 13.3 2.1 0.5 10.1
Savings 2.4 1.5 1.9 4.9 1.6
Assets 2.5 8.5 4.8 4.5 2.0
Children 4.2 0.0 52.9 56.3 0.2
Public assistance 0.3 0.3 0.3 3.7 0.6
Other 2.4 1.6 3.6 0.3 1.7
No answer 7.9 3.7 0.2 0.4 2.2

Note: The results are taken from self-reported surveys. Source: Ogawa (2002, Table 11).

Public SSN programs can be classified into formal and informal safety nets. Formal and informal safety nets are, generally,
distinguished by whether they are triggered by statute: formal safety nets are those which legally guarantee individuals
access to economic or social support whereas informal safety nets provide a likelihood of support to individuals to assure
them of attaining the minimum standard of living but are not legally mandated (Reddy, 1998, p. 1).4 In addition to safety nets
financed by the public sector, most societies have private, informal, community-based arrangements that help mitigate
against deprivation and temporary income shortfalls. The World Bank cited examples in Gambia and Pakistan where
transfers to the needy are within the Islamic context of zakat, an earmarked tax on the wealthy provided by the mosque
(Subbarao et al., 1997). In Sub-Saharan countries there is a system of labor transfers within communities, while informal
transfers on private accounts are considerable in the Philippines. Moreover, in China, one structural feature of the rural
economy – access to land, either individually or collectively – provides a type of informal safety net that enhances economic
security.
Informal SSNs can be divided into private and public ones. Examples of private informal SSNs include transfers from
family members, friends, neighbors and community members and institutions, including NGOs. Intergenerational transfers
from children to their parents are an important example. They vary considerably across countries in Asia, e.g. such transfers
now represent a small percent of the income of the elderly in Japan but a large percent in Korea and Thailand (see Table 1).
Public informal SSNs refer to the support which individuals can hope for from the government, through programs which
generate assets or employment, transfer income, or provide basic social services, as a means of helping affected individuals
from falling below the designated minimum standard of living. The difference between formal and informal public SSNs is
whether there exists a formal legal support of the assistance (Reddy, 1998, p. 3).

3. SSN as defined by the World Bank

Since the inception of the SSN concept, the World Bank has continually elaborated its definition. When the World Bank
used the term SSN in its 1990 World Development Report (WDR), it emphasized the ‘‘irregularity’’ of economic difficulties
faced by individuals. This was a change from the World Bank’s earlier definition of SSNs as ‘‘a system of income insurance to
help people through short-term stress and calamities.’’ SSNs are, therefore, targeted at those who are potentially able to
support themselves through individual productive effort or through the assets which they own, but are temporarily unable
to do so at the relevant minimal acceptable level. In this sense, the 1990 WDR definition distinguishes ‘‘safety nets’’ from
‘‘income or cash transfers.’’ Thus, SSNs are defined as programs that assist those who are temporarily exposed to shocks, such
as the unemployed, while income transfers are meant to assist those who are relatively permanently incapable of
participating in the productive process, such as the elderly and the disabled. This distinction was, however, removed from
the definition of SSNs provided in the World Bank’s Poverty Reduction Handbook in 1992 (Reddy, 1998, p. 3).
This broader definition was also adopted in a World Bank Discussion Paper in 1996 which refers to SSNs as
‘‘. . .encompassing all informal family-based arrangements, all social security programs. . . and poverty-targeted
interventions.’’ Other documents of the World Bank and UNCTAD during this period also defined SSNs to include ‘‘social
action programs,’’ ‘‘social investment funds,’’ and ‘‘emergency social funds’’ (Reddy, 1998, p. 3).
The experience of the Asian Financial Crisis led the World Bank to clarify its definition once again in 2003:5
Safety nets are basically income maintenance programs that protect a person or household against two adverse
outcomes: a chronic incapacity to work and earn, and a decline in this capacity caused by imperfectly predictable life-
cycle events (such as the sudden death of a bread winner), sharp shortfalls in aggregate demand or expenditure shocks

4
According to the World Bank, examples of formal SSNs include food subsidies, feeding programs, public works and other employment programs, credit-
based self-employment programs, social funds and related interventions, and child allowances. See http://www. worldbank.org/ pov-erty/safety/basic.htm.
Last accessed on 1 March 2007.
5
On line at http://www.worldbank.org/poverty/safety/basic.htm. Last accessed on March 2007.
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470 S. Paitoonpong et al. / Journal of Asian Economics 19 (2008) 467–473

(through economic recession or transition), or very bad harvests. Safety net programs serve two important roles:
redistribution (such as transfers to disadvantaged groups) and insurance (such as drought relief).
This definition clearly encompasses various transfer programs designed to play both a redistributive and risk reduction
role in poverty reduction. The Bank argued that the redistributive role is intended to reduce the impact of poverty and the
risk reduction role is intended to protect individuals, households and communities against uninsured income and
consumption risks. Risks can be household-specific (e.g., death in a family, unemployment of the wage earner), community-
or regionally based (e.g., drought, famine, and epidemics) or nationwide (e.g., drought, global financial risks, and shifts in
terms of trade). The linkage of SSNs and poverty is based on the assumption that the poor are more vulnerable than the non-
poor to these types of risk. From this perspective, SSN programs should be specifically designed to address the needs and
characteristics of various categories of a country’s poor population.
We note that this World Bank definition of SSNs does not directly mention social insurance systems, employment
guarantee schemes, severance payments and unemployment insurance which were included in a UNESCO study (Reddy,
1998, p. 1).6 According to the Bank, safety net transfers may take the form of cash or income transfers, such as pensions,
child allowances, etc.; transfers in kind, such as food subsidies, housing subsidies, energy subsidies, feeding programs; or
they may provide income support to the vulnerable by providing jobs in an emergency situation, through a public works
program.7

4. SSN as defined by ESCAP

An ESCAP study (Jurado, 2001) implicitly maintained that social safety nets are programs intended to assist people who
have been adversely affected by shocks and other kinds of emergencies, not necessarily the poor. It drew a line between
social safety nets and other related concepts such as social protection, social security and anti-poverty programs. It
distinguished between formal and informal safety nets and maintained that social safety nets should not include anti-
poverty programs (p. 2):
[Inclusion of such programs]. . .is a mistake since anti-poverty programs are intended to ameliorate the living
conditions of people living in poverty, i.e., not necessarily those affected by crises, while social safety nets are intended
to assist people who have been adversely affected by shocks and other kinds of emergencies, not necessarily the poor.
Social safety nets and anti-poverty programs have overlapping target populations. The targets of social safety nets are
those people adversely affected by crises or sudden shocks who mostly are poor people. They are the same people who
are the targets of anti-poverty programs. Nevertheless, some of the targets of social safety nets may be non-poor, so
long as they were adversely affected by shocks.
Jurado (p. 1) defines social protection as that panoply of institutions in society that provides ‘‘security’’ for citizens in the
widest sense of the term that is personal and collective security. His definition is not simply the term that has been co-opted
by political and military interest groups, but relates to such issues as consumer protection, crime prevention, environmental
protection, disaster prevention and relief, and social security in the sense of social insurance in one form or another. From
this ESCAP perspective, social protection is the most encompassing category, covering all members of society, without
exception. In comparison, social security is just one component of social protection, covering only employed individuals and
households. Social safety nets are similarly a component of social protection, providing coverage to people adversely affected
by crises, whether they are employed or not.8 Finally, ESCAP does not regard anti-poverty programs to be a component of the
social protection system except in the broadest sense of providing assistance to people whose income falls below a minimum
floor.

5. SSN as defined by the International Labor Organization

The ILO uses a narrower definition of social safety nets than the World Bank. Social insurance systems financed by
contributions from employers are not strictly contained in the SSN umbrella or penumbra. One ILO study maintains that
an SSN ‘‘is a government-provided anti-poverty benefit’’ (Gillion et al., 2000, p. 465). To the ILO, a social safety net is
only a part of social assistance, while social assistance is a part of social security, and social security is a part of social
protection.
A digression on the social security system may provide a better understanding of the social safety net concept. To begin
with, the ILO definition of social protection includes not only public social security schemes but also private or non-statutory
schemes with a similar objective, such as mutual benefit societies and occupational pension schemes. Social protection
includes all sorts of non-statutory schemes, formal or informal, provided that the contributions to these schemes are not
wholly determined by market forces (ILO, 2000, p. 29).

6
See also World Bank (2001) for an elaborate discussion of various safety net programs.
7
See http://www.worldbank.org/poverty/safety/types.htm. Last accessed on March 2007.
8
The World Bank has sometimes used the terms ‘‘social safety net’’ and ‘‘social protection’’ interchangeably.
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S. Paitoonpong et al. / Journal of Asian Economics 19 (2008) 467–473 471

Social security, a term long used by the ILO, is defined (ILO, 2000, p. 29) as ‘‘the protection which society provides for its
members, through a series of public measures9: to offset the absence or substantial reduction of income from work resulting
from various contingencies (notably sickness, maternity, employment injury, unemployment, invalidity, old age and death
of the breadwinner); to provide people with health care; and to provide benefits for families with children.’’
This definition of social security corresponds to the ILO Social Security Standard (Minimum Standards) Convention,
1952 (no. 102). The contingencies identified (except unemployment) affect individuals rather than communities.
Collective risks such as drought, bad harvests, natural disasters and war, also affect people’s income security, especially in
developing countries. In most cases, existing social security systems do not specifically addresses these risks but cover
them only through general ‘‘social assistance.’’ The ILO definition of social security includes social insurance (i.e.,
contributory schemes), social assistance (i.e., tax-financed benefits provided only to those with low income through
means-test or income test); and universal benefits, i.e., tax-financed benefits provided without being income- or means-
tested (ILO, 2000, p. 29).10 Social insurance provides insurance for wage earners. The principle elements of social insurance
are as follows: (1) participation is compulsory, with few exceptions; (2) it is financed by contributions which are normally
shared between employers and workers, with, perhaps, state participation in the form of a supplementary contribution or
other subsidy from general revenues; (3) contributions are accumulated in special funds out of which benefits are paid; (4)
surplus funds are invested to earn further income; (5) a person’s right to benefit is secured by his contribution record
without any test of need or mean; (6) and contribution and benefit rates are usually related to what the person is or has been
earning (ILO, 1989, p. 4).
Social assistance is the assistance provided by the government to the general public who are in need, particularly the
elderly, the sick, invalids, survivors and the unemployed. Its main characteristics are: (1) a person does not have to join the
program (by paying contribution) prior to receiving benefits; benefits are paid as a legal right in prescribed categories of
need; (2) the entire cost of the program is met by the government; (3) eligibility is determined by a person’s other income
and resources. The benefit grant is designed to bring the person’s total income up to a community-determined minimum,
taking into account other factors such as family size and unavoidable fixed obligations such as rent; grants are not related to
the applicant’s previous earnings or customary standard of living; and (4) social assistance is more or less the same as social
welfare or social work. It is problem-oriented and provides a certain amount of scope for discretion in determining awards,
within the framework of the rights established under the law (ILO, 1989, p. 5).
Social assistance, according to ILO, consists of poverty alleviation measures or anti-poverty programs.11 The ILO admits
that this is a much broader definition than is used by other organizations, governments and scholars.12 In many other
countries a sharp distinction is drawn between social security and poverty alleviation measures, notably social assistance
(ILO, 2000, p. 29). Social assistance is considered a ‘‘safety net’’ when social insurance fails (ILO, 1989, p. 6).
The ILO also expressed the view that the definition of social safety nets should not include social insurance systems since
social insurance is financed from employers and workers. It also urges that social safety nets play a selective and residual role
in social policy, essentially filling in gaps. Too much emphasis on social assistance and safety nets naturally erodes the role of
social insurance as a major pillar of social protection (Wickramsekara, 1999, p. 3).13

6. SSN as defined by Thailand Development Research Institute

During 1999–2000, the Thailand Development Research Institute (TDRI) coordinated a collaborative research project
among research institutes in Indonesia, Malaysia, the Philippines and Thailand studying the social impacts of Asian economic
crisis in Indonesia, Malaysia, the Philippines and Thailand, respectively (TDRI, 2000). In the study by Kittiprapas and
Intaravitak (2000), the concept of a social safety net is not clearly defined, and most country studies applied the concept in
the sense of social security and social welfare.
One exception was the Indonesia study (Feridhanusetyawan, 2000), in which the term refers to emergency social funds
that serve to protect individuals from falling below a defined minimum standard of living.14 The Indonesia case study noted
that social safety net programs in Indonesia were ineffective during the Asian Financial Crisis. The implementation of the
programs was not only late, but they were also poorly designed and administered, not to mention packed with controversy.
The national bureaucracy lacked the capacity to manage the programs well and became demoralized during the rapid
economic decline and political turmoil of the Crisis.

9
A key difference between ‘‘social security’’ and ‘‘social protection’’ is that the former is provided through public measures. The term ‘‘social security’’ was
first officially used in the title of U.S. legislation – the Social Security Act of 1935 – even though this Act initiated programs that focused only on the risks of
old age, death and disability (ILO, 1989, p. 3).
10
See ILO (1989) for details on the distinction between social insurance and social assistance.
11
As such, the ILO definition of social security includes anti-poverty programs.
12
In the United States, the term ‘‘social security’’ refers only to retirement, survivor and disability benefits paid by the federal government.
13
Other routes to social security include direct provision from the government, wholly or largely from general revenue, of standard benefits to each
resident in a specified category. These benefits may include a pension to every elderly, invalid, orphaned or widowed resident. Some countries, including
Thailand, operate a national health service providing medical care for all without a contribution or means test. The cost may be met wholly or mainly from
public funds, although there may be partial charges for dental, ophthalmic or specialist services, family benefits, provident funds and provision made by
employers.
14
Social safety net programs in Indonesia were defined to include the promotion of small and medium enterprises.
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In the case study (Pasadilla, 2000) of the Philippines, the author noted that for many crisis-affected people, safety nets
came in the form of loans, funding for displaced workers, educational, calamity and housing loans, and emergency loans.
The case study of Thailand’s social safety nets – in particular, the programs that were in place prior to the Financial Crisis –
was far from exhaustive.15 There were, in fact, many more formal and informal forms of safety nets. Informal private social
safety nets included any form of social welfare service or assistance that was not provided by the government (for example,
social assistance from relatives, friends, religious and voluntary organizations). In Thailand where more than half of the
workforce and population work in agriculture and live in rural areas, formal social safety nets have limited coverage and only
a small proportion of the population is covered by any pension plan. In September 1999, 5.5 million workers – only about 15%
of the total labor force – were beneficiaries of the Thai social security system. A large number of people did not receive
income compensation when ill. As such, many still rely on such informal sources as family, relatives, friends, religious and
voluntary organizations.
In Thailand, temples are another source of informal safety net services. Paitoonpong (2001, p. 17) showed that during the
Asian Financial Crisis, temples were an emergency source of food and shelter for some villagers. Indeed, village people rely
heavily on assistance from temples not only for food and shelter but also for consultations when they have problems or
experience psychological stress. Temples also provide forums for social gathering in many communities. In 2000, there were
31,111 Buddhist temples, 3181 mosques (Muslim temples), 2200 Christian churches and 40 Hindu temples in Thailand.16
During the Asian Financial Crisis, there were reports documenting the many cases of familial breakdown and the erosion
of traditional Thai values (World Bank, 1999, p. 13). Rural communities, in particular, have witnessed a rapid shift from
mutual help and reciprocal labor exchange to a cash economy where rural laborers work primarily for a wage. When younger
generations migrate for jobs to urban areas, they often leave small children in the hands of the elderly. As a result, the new
generation of workers has become detached from the extended family and village life and, thus, more individualistic. It has
been suggested that the cultural and social norms that were essential to the institutions and relationships of an earlier
agrarian era have been eroding and that there is a greater tendency for open confrontation among individuals and groups
(World Bank, 1999, p. 24).
At the same time, the Crisis in Thailand presented an opportunity to increase informal social connections and assistance
through relationships of trust and cooperation within a society or community. The crisis forced millions of families and
communities to become more disciplined and resilient, and to increase cooperation and mutual support during the Crisis.
Paitoonpong (2001) found that a portion of the social capital that had eroded prior to the crisis was restored during the crisis.
One example is the revival of the practice of labor exchange in agriculture.
Some measures taken by national or regional governments to stimulate the economy during economic downturns might be
construed as part of the social safety net. For example, the Thai government undertook seven measures to address the sudden
unemployment problems created by the Asian Financial Crisis. These measures include the repatriation of immigrant workers,
the promotion of Thai workers abroad, stimulation of employment in rural and urban areas with temporary labor-intensive civil
works programs, increased training for the unemployed and preservation of employment by providing additional support to
labor-intensive and export industries. During the Crisis, the Thai government also established an employment information
system. With assistance under the Asian Development Bank’s Social Sector Program Loan, the Ministry of Labor and Social
Welfare launched Centers for Assistance to Laid-off Workers—a one-stop service center to help laid-off workers in the areas of
severance pay, social security, placement and counseling services, training and low interest loans.
While the Thai government’s overall budget appropriations for social welfare services declined during the crisis years,
allocations to key programs targeted to the most vulnerable groups were maintained or increased (TDRI, 1998). Scholarship
and loan programs to minimize student dropouts were maintained or increased. These programs, combined with the
commitment of Thai families to education, have helped explain the relatively small increase in dropout rates. In addition, the
number of children receiving school meals increased and operational budgets for teacher training and instructional
materials were protected. Financing for the Public Assistance Scheme (low-income health card) was increased and coverage
expanded in response to the substantial increase of enrollments in the program.

7. Conclusion

The scope of the definition of a social safety net varies considerably across international organizations and scholars. The
ILO’s comments that ‘‘. . .terminology in this [SSN] area has been very heavily influenced by institutions, no doubt because
the characteristics of the different institutions concerned are quite distinctive’’ (ILO, 2000, p. 29). The World Bank has also
accepted that ‘‘. . .[s]afety nets exist in a complex political and economic context, and viewpoints on them may differ, even
within the same organizations and groups.’’17

15
Thai workers rely on severance pay requirements, as opposed to an unemployment insurance scheme, to provide them with an income source if they are
laid off. Prior to August 1998, employers were required to pay laid-off workers with a minimum of 3 years service a severance equal to 6 months of wages. As
of August 1998 and coincident with the Crisis, the maximum severance pay requirement for employees with more than 10 years of service was increased
from 6 to 10 months. The extent to which severance requirements were being implemented during the crisis was open to question.
16
There are more than 17,000 associations and foundations in Thailand, and many are not registered with the government (Paitoonpong, 2001). This
makes it more difficult to document and assess their SSN-related activities.
17
http://www.world bank.org/poverty/safety/. Last accessed on March 2007.
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S. Paitoonpong et al. / Journal of Asian Economics 19 (2008) 467–473 473

The tremendous variation in the use of the term invites confusion and makes it virtually useless as a technical concept.
The very nature of the metaphor invokes a vision of a large net that encompass a number of different types of programs. In
many cases it is not even possible to list specific programs that are included, as the particular forms of these programs could,
of course, vary with place, time and circumstances. Complicating things further, the term is sometimes used in a very narrow
sense. Given the low probability that usage of the term will ever be standardized, economists and national/international
organizations might be well served by avoiding the term completely and instead using its component parts.

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