Social Protection and the Four Horsemen of the Donor Apocalypse

A version of this blog was later published in “Social Protection in Developing Countries: Reforming Systems”, eds Bender, Kaltenborn and Pfleiderer, Routledge, Oxford, UK (2013)

Social protection has come a long way in the decade since it first entered the development discourse. There is now generally a recognition that the old development paradigm ("the poor are the problem") is bankrupt. This paradigm focussed development on promoting economic growth, waited for economic growth to reduce poverty, provided residual interim safety nets to those who could not benefit immediately, and left donors to step in with expensive "emergency" assistance when necessary. This has not worked.

The emerging development paradigm ("the poor are the solution") is predicated on the provision of comprehensive social protection which will allow the poor themselves to participate in the generation of economic growth; this in turn will reduce poverty and the cost of providing social protection, and will also reduce the need for emergency assistance, thus freeing donor resources to help fund further development.

Over the last decade, donors and their international development partners have indeed done a lot to promote and support these significant advances. But they could have done better. There is a serious, and continuing, problem that donors and IDPs fall into four competing camps, which this paper characterises as the "Four Horsemen of the Donor Apocalypse": the Productivists, the Ten-Percenters, the Instrumentalists and the Universalists.

The White Horse

I watched as the Lamb opened the first of the seven seals. Then I heard one of the four living creatures say in a voice like thunder, "Come and see!" I looked, and there before me was a white horse! Its rider held a bow, and he was given a crown, and he rode out as a conqueror bent on conquest.

The Productivists are led by the World Bank and the IMF. The characteristics of their vision of social protection are that it must be targeted at the poorest; that the poorest should preferably be identified through "proxy means testing"; and that no-one should be given "something for nothing". This means that they favour public works programmes, social action funds and conditional cash transfers (for all of which it is of course much easier to persuade Governments to take substantial loans, since such programmes are also demonstrably producing physical, social and human assets). Examples of Productivist programmes abound, for example in Latin America, in the Philippines, and in Ethiopia, Rwanda and Tanzania.

There are some concerns with this "poor relief" approach, however. The first is that the incremental benefits of conditionality, pushed hard by the Bank, are unproven (or at best controversial) . The second is that proxy means testing is, by the Bank's own admission, "most appropriately used where a country has reasonably high administrative capacity", and it has been shown elsewhere to be highly inaccurate (watch this Wahenga space). And the third is that, while the Bank has (belatedly) adopted the "3 Ps" framework for social protection, it has bizarrely dropped the concept of "provision". Its "3 Ps" are promotion, prevention and protection, with the latter introducing a worrying semantic circularity. But the more fundamental problem is that, the way it is defined, "protection" (ie protection " from destitution and catastrophic losses of human capital ") is little different from "prevention" (ie protection "against drops in well-being from income and expenditure shocks") - in that both presuppose that people have something to start with, which needs to be "protected" or its disposal "prevented". And what we have lost from the original "3Ps" is any concept of "provision" - the idea that there are groups of people (who many would argue should be the core target groups for social protection) who have virtually nothing to "protect" or "prevent", and who rely on social protection just to survive. This might include the elderly, the disabled, street-children, marginalised groups. The worry is that by excluding this "provision" function, the Bank is inching SP away from the poorest and most vulnerable, and towards those with economic growth potential ... and therefore better prospects for their "lending operations".

The Red Horse

When the Lamb opened the second seal, I heard the second living creature say, "Come and see!" Then another horse came out, a fiery red one.

The Ten-Percenters are led by UNICEF (though - in fairness - not all of UNICEF). The principal characteristic of their vision of social protection is that it should use community-based targeting to identify the most labour-constrained households among the "ultra-poor", which - somewhat mysteriously - appears to equate ubiquitously to ten percent of the total population. The identified beneficiaries are then given unconditional cash transfers, sometimes with additional incentives if they have school-going children. This approach began with the tiny, but much-feted, Kalomo pilot in Zambia, and it has since been rolled out, with little modification to adapt to differing national circumstances, in Malawi and Liberia. More recently, Zimbabwe and Uganda have escaped with variants on the original.

Here the concern, rather than being with the "3 Ps", is that it has "no Ps": no practical basis, no political support, and no potential! On the contrary, there are multiple problems, many of which have been discussed in earlier RHVP Comments and Briefs. First, it is almost impossible to identify the poorest and most-labour constrained ten percent, especially in countries where over seventy percent of the population are churning in and out of poverty. It is difficult enough even on a pilot scale with extensive external resources and additional "project" funding: it is totally impractical on a national scale. This can lead to problems of moral hazard and even social conflict. Second, even if it were possible, the income from the transfer to the poorest households will result in them rapidly "leap-frogging" up the wealth distribution, so that they will very soon no longer be the poorest. This can lead to problems of equity and the need to retarget frequently. Third, the arbitrary choice of ten percent - essentially a budget rationing tool - cannot be applied universally with any semblance of fairness: there are huge variations in the extent of poverty between, and even within, different districts and communities. As a result, none of the cited examples has been successfully scaled up: and in Zambia, showcase of the Ten-Percenters, the Government has recently expressed its clear preference for a categorical child benefit over the ten percent model that has been pushed so hard and for so long.

The Black Horse

When the Lamb opened the third seal, I heard the third living creature say, "Come and see!" I looked, and there before me was a black horse! Its rider was holding a pair of scales in his hand.

The Instrumentalists are led by ILO, which has rallied an impressive array of UN and other agencies behind its Social Protection Floor(SPF) initiative. Emerging from an employment and "decent work" perspective, the SPF comprises four main components: access to health services; child or family support; income support for the unemployed; and income security for elderly and disabled persons. If you believe the propaganda, examples of the successful implementation of the SPF are everywhere, even in countries where social protection has been evolving at its own pace and in its own way for many years before the term SPF was even coined: these include Mexico, Brazil, Argentina, South Africa, Bolivia, Sri Lanka, Ghana, Haiti, East Timor, etc, etc, etc.

The primary concern with the SPF is to know "which P?": is it a process or is it a prescription? The correct answer is that it is a process. But - for one reason or another - it has been mis-sold, and now suffers from an image problem. Many stakeholders, including some countries and some key donors, perceive it as being too prescriptive, with a mandate to roll out a social protection carpet of standard instruments: health insurance/fee waivers, child grants, unemployment benefits and old-age/disability pensions. To some extent, this misperception in understandable: the ILO has itself recently made a number of presentations describing the SPF as "four essential social transfers" and "four essential social security guarantees", in both cases specifically citing the instruments of "family/child benefits", "social assistance", and "pensions". The ILO public relations machine will have to work hard to retrieve the situation and demonstrate convincingly that the SPF is what it says it is: a recognition that "each country has different social needs, development objectives and fiscal capacity to achieve them, and will choose a different set of policies"; and that the role of the SPF "through a coordinated country response [is to] facilitate and accelerate the introduction or strengthening of sustainable context-specific social protection systems".

The Pale Horse

When the Lamb opened the fourth seal, I heard the voice of the fourth living creature say, "Come and see!" I looked and there before me was a pale horse!

The Universalists are a diverse (and fluid) crowd: they include a number of the big international NGOs, a handful of bilateral donors including the Nordics and DFID ... and - let us be honest - RHVP. The characteristics of their vision of social protection are that it should be rights-based, that it should use predominantly universal approaches and categorical targeting, that it should favour demand-led employment guarantee schemes over supply-led discretionary public works projects, and that it should deliver unconditional cash transfers with no strings attached. Examples can be found in many OECD countries, but also in South Africa, Botswana and Nambia, and (at least partially or incipiently) in lower income countries such as Lesotho, Nepal, Uganda and Zambia.

The primary concern here is again with "3 Ps": how do we pay, pay, pay? There is no doubt that such universal schemes will cost more to implement, and this is often raised as an impossible hurdle. Yet experience has shown that when such schemes are introduced, they are more sustainable: more people benefit from them, understand them, and accept them as fair; so more people vote for them; so they become more popular politically; so they attract a greater share of the national budget. And so, ultimately, it can be argued that the poorest get more benefit from universal schemes than from programmes targeted more narrowly at them. One option to defray the costs is to introduce such schemes progressively: in other words, to set eligibility for a social pension at a relatively high age such as 70 and reduce it gradually, or to start a child benefit at a young age such as 2 and then increase it over time (like South Africa has done), as the evidence of beneficial impacts generates increased public and political support. Experience shows that governments will devote much more substantial shares of their budgets to universal programmes than to poverty-targeted ones. For example, the universal social pensions in Mauritius, Lesotho and Nepal command more than double the resources as a share of GDP than the means-tested pensions in Cape Verde, Argentina and India; and it is often overlooked that the budget of the vaunted poverty-targeted Bolsa Familia in Brazil is dwarfed by that of the country's near-universal rural and urban pension programmes.

Angels and Demons

They were given power over a fourth of the earth to kill by sword, famine and plague, and by the wild beasts of the earth.

The funny thing about the Four Horsemen of the Apocalypse is that no-one really knows what they mean. The popular, more dramatic view is that they symbolise tribulation, and are the harbingers, respectively, of conquest, war, famine and death. But there is another school of thought that equates them with the angels of the four winds (Michael, Gabriel, Raphael and Uriel), who are often associated with the four cardinal directions. And this seems more appropriate in terms of our Four donor Horsemen: the danger is that, whatever the strengths and weaknesses of their competing visions, they are pulling in four opposite directions. And this can have disastrous consequences at national level. Let us look at how this has played out in one poor country: Malawi.

Malawi has been trying, since 2007, to develop a comprehensive national social suport policy. During that time:

1) The Productivists (aka the World Bank) have been (a) pursuing their investments in public works through the Malawi Social Action Fund (MASAF), and (b) experimenting with a pilot Conditional Cash Transfer in Zomba;

2) UNICEF has been pushing its Ten-Percent model, with a pilot first in Mchinji, and then expanding  to a handful of other districts;

3) ILO and its Instrumentalist partners have been assiduously fixing the joists for their Social Protection Floor;

4) DFID has commissioned some like-minded Universalists - HelpAge, EPRI and (it must be admitted) RHVP - to argue the case for a universal social pension.

The result: stalemate. No wonder Malawi's Cabinet has still not approved the policy, five years on!

In the meantime, the Government has shown very clearly where its own "social support" policy priority lies: in its agricultural input subsidy programme. So what should the donors have done? Instead of  declaring that they didn't approve of subsidies, instead of insisting that the national social support policy be approved before they did anything, and instead of pursuing their opposing policy agendas, they should rather have:

·       jointly supported the Government;

·       explored integrated ways to extend social transfers to the poor with no land or labour (as in the direct welfare support components of Ethiopia's PSNP and Rwanda's VUP);

·       explored options for cash transfers to those who routinely sell their agricultural input vouchers, on the basis that there must be cheaper and more efficient ways to provide them with the cash they need;

·       facilitated the inclusion of civil society and of beneficiaries in the national social protection debate;

·       invested in necessary upfront expenditure, such as national identity systems;

·       helped to build capacity at national and sub-national levels;

·       promoted the institution of independent grievance and appeals procedures, and of social audits;

·       explored innovative delivery systems;

·       leveraged maximum private sector participation in the programme;

·       funded a futures option on maize imports (as DFID and the World Bank had done successfully in 2005) to provide insurance against the next year when (not if) the harvest fails;

·       invested in monitoring and evaluation to learn lessons and inform the evolution of the programme.

What a missed opportunity!

In conclusion, social protection still has a huge role to play in development; but it will only achieve its full potential if the Four Horsemen of the Donor Apocalypse reconcile their differences and unite to ride in the same direction as individual national Governments.