MAKING THE CASE FOR SOCIAL

PROTECTION
Why invest in it?
Name of presenter
Economic Policy Research Institute (EPRI), Cape Town, South Africa
Save the Children Course, Abuja, Date
 Session objectives
• Generate understanding and familiarity with
multi-dimensional impacts of social
protection programmes

• Capacitate participants to communicate and

elaborate why social protection is worthy of a
country’s investment
 Social protection – why invest?
In the past year, leading medical research
journals have done something that they rarely
do…
 Social protection – why invest?

…they weighed in on global economic policy

“Investing in social protection, certainly when child-sensitive, is the

most productive pathway to long-term economic prosperity.”

The evidence highlights a key finding: “These investments generate

extra-ordinary rates of return – socially and economically – along
complex pathways.”
Social protection – why invest?

Let’s have a look at how Africa and its peers

are currently performing!
Social protection – why invest?
WE LIVE IN EXCITING TIMES!
16.0
GDP growth rates selected African countries 2008-2018
There
14.0 should be
money to
12.0
invest!
10.0

8.0

6.0

4.0

2.0

0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 (e) 2017 (p) 2018 (p)
-2.0

-4.0
Congo, Dem. Rep. Ethiopia* Ghana
Kenya Nigeria Senegal
Uganda AFRICA
 Social protection – why invest?
HOWEVER, INEQUALITY IS STILL RIFE ACROSS THE CONTINENT
Inequality across Africa, as measured by the Gini coefficient
Social protection – why invest?
SO IS POVERTY…
Per cent of people living below USD 2 per day
Social protection – why invest?
…WHICH IS EVEN ON THE RISE.
Poverty headcount across the continent, 1990 and 2013

(World Bank, Atlas of Sustainable Development Goals, 2017)

Social protection – why invest?
And, we are not the only ones..
Social protection – why invest?
Nor, have our ‘developed’ peers always been like this.

Bourguignon and Morrison (2002)

Social protection – why invest?
THERE IS ONE KEY DIFFERENCE
Public social protection expenditure as percentage of GDP

(ILO, 2017)
Social protection – why invest?
Post-tax/transfer poverty levels in selected OECD member states
 Social protection – why invest?
Pre-tax/transfer poverty levels in selected OECD member states

WITHOUT SOCIAL PROTECTION POLICIES, OECD COUNTRIES WOULD HAVE

POVERTY RATES SIMILAR TO AFRICA!
 Social protection in Sub-Saharan
Africa

Over the last decade, countries in Sub-Saharan

Africa have increasingly invested in social
protection programmes!
 Social protection has grown
substantially...
2000 2012
9 countries – 25 programmes 41 countries – 245 programmes

(Garcia and Moore, 2012)

…and delivered well-documented,
multi-dimensional impacts.
Poverty
reduction

Trust in Human
government capital

Economic Social Livelihoods

reform Protection

Social Risk
cohesion management

Economic
resilience
 Multi-dimensional impacts of
social protection
Poverty Poverty reduction
reduction

• Main aim of social protection

• Protects people from shocks and directly

Social
supports well-being
Protection
• Impacts as great as 50% reduction in
some countries
 Poverty reduction
ALONG WITH REDUCTIONS IN INEQUALITY
Inequality in South Africa: Lorenz curve pre- and post-transfers

(EPRI)
 Multi-dimensional impacts of
social protection
Human capital development
Poverty
reduction

Human • Most documented secondary goal

capital

• Shown to improve nutrition,

Social education, and health outcomes
Protection

• For both, conditional and

unconditional social protection
programmes
 Building human capital
BY INVESTING IN CHILDREN’S BRAIN DEVELOPMENT…
‘Sensitive periods’ in early Binocular vision
Central auditory system
brain development Habitual ways of responding
Language
Emotional control
High Symbol
Peer social skills
Relative quantity

Low
0 1 2 3 4 5 6 7
Years
Building human capital
…WHEN RATES OF RETURNS ARE HIGHEST.
Rates of return to public interventions
Pre-school
Intervention

Brain
Growth

Schooling

Job Training

Human Capital Rates

of Return

Pre-school School Post-School

Age (Heckman & Carneiro, 2003; Handa, 2007)

 Building human capital
BY SUPPORTING HEALTHY DEVELOPMENT OF CHILDREN THROUGH
CASH TRANSFERS…
Improvement in height-for-age z-scores of various child transfers
0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
South Africa South Africa Mexico Nicaragua Colombia Honduras
(girls) (boys)
Building human capital
…OR SCHOOL FEEDING…

(http://www.schoolsandhealth.org/Pages/SchoolNutritionFoodforEducation.aspx)
 Building human capital
…THEREBY ENABLING CHILDREN TO EXPLOIT OPPORTUNITIES.
35%
attributable increase in school attendance rate

30%

25%

20%

15%

10%

5%

0%
Bangladesh Cambodia Kenya Mexico boys Mexico girls Turkey
 Multi-dimensional impacts of
social protection
Poverty
Livelihoods
reduction

Human • A secondary impact

capital

• Small but significant improvements

Social
in many countries
Protection
Livelihoods
• People use social protection
benefits to support enterprises and
labour market participation
Supporting livelihoods development
SOUTH AFRICA
Labour force participation rates of CSG and non-CSG households
70%
60%
50%
40%
30%
20%
10%
0%
Out of LF Unemp., no Unemp., Employed
search searching
Labor force status, March 2005

CSG households Non-CSG households

CSG = Child Support Grant (monthly cash transfer to poor households with children).
 Multi-dimensional impacts of
social protection
Poverty
reduction Risk management
Human capital
• Subtle but powerful impact

Social
Protection
• Protects people from shocks and
Livelihoods
directly supports well-being

• Prevents further decline into poverty

Risk
management
• Protects assets and promotes
productive risk-taking
 Multi-dimensional impacts of
social protection
Poverty
Economic resilience
reduction

Human
capital
• Enables economy to better
withstand external shocks
Social
Protection • Provides an automatic stabiliser
Livelihoods
for economy

• Provides efficient economic

Economic
resilience
Risk
management
stimulus
Stimulating economic growth
AT LOCAL LEVEL…
Stimulating economic growth
…AND AT NATIONAL LEVEL!

(OECD, 2014)
 Stimulating economic growth
…AND IN NIGERIA
Expected benefit drivers of national cash transfer over long-term
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Current 3 years 10 years 15 years 20 years
Improved health Increased wage earning capacity Local economy effects

(EPRI, 2017)
 Stimulating economic growth
…AND IN NIGERIA
Expected benefit drivers of national school feeding programme over long-term
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Current 3 years 10 years 15 years 20 years
Improved nutrition Increased wage earning capacity Increased structured demand

(EPRI, 2017)
 Multi-dimensional impacts of
social protection
Poverty Social cohesion
reduction

Human
capital • Social protection as one of the
most concrete and valued
forms of government delivery
Social Social
cohesion Protection
Livelihoods • Inclusion in the productive
sector strengthens willingness
Economic
to pay
resilience Risk
management

• Resulting social cohesion

promotes private investment
 Multi-dimensional impacts of
social protection
Poverty
reduction
Economic reform
Economic Human
reform capital • Social protection distributes
benefits of economic growth
Social
Protection • Renders any economic reform
Social
cohesion Livelihoods programme more pro-poor

• Increases likelihood of reform

Economic
resilience
Risk
management
successes
 Facilitating economic reform
USING SOCIAL PROTECTION TO BUILD SUPPORT FOR
ECONOMIC REFORM

• Ghana and Egypt previously spent over 5 per cent of their

GDP on regressive energy subsidies

• Trying to abolish them in 1990s led to massive protests, and

reversal of reform

• Both countries recently successfully initiated economic

reform, directing cost savings to pro-poor social protection
programmes
Facilitating economic reform
WHICH COUNTRY AM I?
• A half-century ago had a poverty
profile similar to any African country.

• Today, lowest poverty rates on the

continent and some of the highest
growth rates over the past several
decades.

• Social protection enabled a

restructuring of the economy onto an
Mauritius export-led high growth path.
 Multi-dimensional impacts of
social protection
Poverty
reduction Build trust in government
Trust in Human
government capital

• Social protection improves

trust in local government,
Economic Social especially in democratically
reform Livelihoods
Protection
elected officials

• First point of contact between

Social Risk
cohesion management a government and its citizen
Economic
resilience
• Strengthens bond between
state and people
 Key takeaways

• Social protection’s main impacts are to effectively reduce

1. poverty and inequality (SDGs 1 and 10).

• But social protection also generates a wide range of

developmental impacts—in terms of human capital
2. development, household well-being and social risk
management (SDGs 2-9). Thus, social protection is a key
tool strengthening sustainable development.

• Developmental impacts promote pro-poor and inclusive

economic growth, which is reinforced by social protection’s
3. impacts on economic resilience, social cohesion and other
mechanisms to promote inclusive economic growth.