The original version of this blog appeared on Development Pathways
The paper compares the old age pensions in Eswatini and
Lesotho (both lower-middle-income countries) with the Social Cash Transfer (SCT)
programme in Malawi. It argues for the virtues of the latter programme, despite
the fact that it represents an approach that has single-handedly set back social
protection in parts of Africa by more than a decade. The paper falls into all
the customary crocodile traps: that it is better to target households than
individuals; that you can accurately select beneficiaries based on poverty;
that, if you can make someone work for their social protection, you should (a
throwback to nineteenth-century poor relief); and a whole load of similar crock[ii].
But its most egregious and unwarranted assumption is that the
budget for social protection is fixed. It posits that if more is spent on one
flagship programme of social protection, then less will be available for other
programmes (“The OAG grew and is still growing like the famous crocodile, which
became bigger and bigger eating all the other crocodiles on their small
island”). But the reality, as we have seen historically in higher-income
countries, is that the opposite is true! Once a country implements a
rights-based life-course entitlement programme, the likelihood is that not only
will that programme expand, but also that other life-course programmes will
start to be introduced. Both Lesotho[iii]
and Eswatini[iv]
now have child-oriented programmes (funded by government) alongside their old
age pensions, and Eswatini has a disability benefit. Malawi has nothing other
than its SCT (except public works and school feeding which all three countries
have).
Based on these fundamental misperceptions and its flawed
analysis, the paper comes down in favour of Malawi (and other countries which
have adopted the same blinkered approach): “the performance of their social
assistance systems is by far better [sic] compared to the performance of
the social assistance systems in Eswatini and Lesotho”.
This got me thinking: how does one compare the “performance”
of social protection systems across countries? Like a good crocodile, how would
I get my teeth into this absurd assertion in order to refute it? And I decided
it came down to five criteria, which can, appropriately, be summarised by the
acronym CROCO: Coverage, Rate, Ownership, Continuity and Opportunity. To “perform”
well, a social protection system should have high Coverage, its Rate
of transfer should be meaningful, it should be Owned by government, it
should have Continuity over time, and it should create the Opportunity
for further expansion. As we shall see, by all of these metrics, the old age
pensions in Eswatini and Lesotho outchomp the SCT in Malawi.
Let’s start with Coverage and Rate. These are interlinked,
because it is difficult to compare coverage between programmes that are based
on individual entitlement with those that are allocated to households, especially
when, as in Malawi’s case, the rate of the transfer is (a) banded according to
household size and (b) includes a bonus for school-going children. In terms of Coverage
pure and simple, Malawi’s SCT is paid to only 280,000 household heads, out of a
national population of 18 million (representing 1.6 percent coverage), compared
with Eswatini’s old age pension which goes to 70,000 individuals out of a population
of 1.1 million (6.4 percent) and Lesotho’s which goes to 80,000 out of a
population of 2.1 million (3.8 percent). One could reasonably argue, however,
that the coverage of Malawi’s SCT should include every household member as a
beneficiary (though the same is of course equally true for the pensions![v]):
on this basis the coverage of individual household members under Malawi’s SCT
would be about the same as Eswatini’s coverage of individual pensioners and
higher than Lesotho’s.
But this then brings us to the question of the Rate
of the transfer. Because it lacks domestic political traction, the real
value of Malawi’s SCT has diminished over the years (it is now worth on average around USD9/month/household), while the value of
Eswatini’s and Lesotho’s pension transfers have increased at a faster rate than
inflation (they are now USD25/month and USD42/month respectively). To fairly
compare coverage and rate between programmes we need to judge consistently at
the level either of the household or of the individual within the household. So
either we can conclude that Malawi’s SCT has a similar coverage of individuals to
the other two programmes but at a vastly lower rate (a one-person household in
Malawi gets USD3.50 each month and each individual in a larger household even
less than that, compared with USD25 and USD42 per individual in Eswatini and Lesotho
respectively). Or we can conclude that, at the household level, Malawi’s has both
a much lower coverage (a quarter and a half respectively) and, even then, a
substantially lower rate of transfer. As an example, a household of six,
containing two older persons, two adults and two children might receive around
USD10/month in Malawi, while the same household in Lesotho would receive USD84 (plus,
potentially, further support for children). On whatever basis you compare, the
SCT’s performance can only be judged to be significantly worse.
The next measure of performance is Ownership. The old
age pensions in Eswatini and Lesotho are – and have been since they began in
the early 2000s – fully funded by their respective governments. They also both
emerge from autochthonous political processes, so are genuinely home-grown
responses to the particular challenges faced in the two countries[vi].
The Malawi SCT relies – and has done ever since it began[vii]
– on external donors for some 90 percent of its funding. It is also an imposed
model, an imported carbon copy of the Kalomo pilot in Zambia, owing little to
domestic political impulsions. This is reflected in the much higher place on
the political agenda for the pensions in Eswatini and Lesotho, as manifested in
the increasing value of the transfers: pensioners demand, and usually get, a
Cost of Living Adjustment each year. Similarly, at one stage, when pensions
weren’t paid on time, Eswatini had to shut down its parliament until the
situation was resolved. Contrast that with the lack of accountability and the
absence of a sense of entitlement among SCT beneficiaries in Malawi.
The lack of national Ownership has serious implications for the
Continuity of the programme, surely another important measure of
“performance”. It took more than ten years to scale up Malawi’s SCT from a single
district to every district in the country, whereas Eswatini’s and Lesotho’s
pension began as, and have remained, truly national programmes. The SCT programme
has limped from one funding crisis to another and is now a patchwork of separate
donor-funded initiatives: some districts are funded by the World Bank, some by the
EU, some by KfW, some by Irish Aid and so on. The worst-performing district has
traditionally been the single one funded by the Government, Thyolo. What are
the prospects for continuity after the development partners pull out? In
contrast, the old age pensions have become established elements of the domestic
political landscape in Lesotho and Eswatini. Their future is guaranteed, and
evidence from their evolution to date suggests that they will play an
increasingly valuable role in the national social protection policies of both
countries.
This provides the Opportunity for further expansion. Lesotho
and Eswatini have the chance to progressively expand their coverage to provide entitlement-based
social protection appropriate to the vulnerabilities and objectives at each
stage of the life-course (as has happened over the years in neighbouring South
Africa). By contrast, the danger of relying solely on an unintuitive and
discretionary programme like Malawi’s may actually deter its government from
instituting proper social protection, as indeed has proved to be the case in
some of the countries similar to Malawi that the paper cites (e.g. Zimbabwe,
Ethiopia, Mozambique). Zambia, in contrast, offers an illuminating example where the massive expansion of the programme through increased government
ownership and domestic funding only occurred after it shifted from being a
household-based discretionary programme on the same Kalomo model as Malawi’s to
being substantially an entitlement programme for the elderly and those with
disabilities. Fortunately, there are early signs in Malawi of recognition of
the need for such a shift: a 2016 study by the Ministry of Gender, Children,
Disability and Social Welfare found that a universal old age pension was
feasible and desirable and, in late-2018, a Private Member’s Motion proposed
this measure in Parliament.
It is clear, using all of these CROCO dials, that the two
old age pensions perform much better than Malawi’s SCT. Does it matter that the
paper turns out to be making false claims? Well, yes, it does, because Malawi’s
programme (and others like it) negatively impact the potential of social
protection in Africa. The paper suggests in a muddled way that there is a
distinction between “systemic universalism” and “programmatic universalism” (presumably
in both case intending to use the word “universality”, since “universalism” is
a theological belief in the existence of fundamental truths!). But by no
stretch of the imagination can Malawi’s social protection be described as
universal: its SCT is a tokenistic social assistance programme for “the poor”,
providing inadequate levels of support (from largely external donor resources) to
far too few beneficiaries. Pretending that this is a model to be followed
actually damages the prospects for introducing rights-based social protection of
the kind we are beginning to see in Eswatini and Lesotho. This is true not only
in Malawi, but also in countries like Ethiopia and Zimbabwe, where the
existence of such social assistance for poor households has similarly blocked
the development of genuine life-course based social protection. Unless these
countries can break away from the Kalomo model, as Zambia itself has done, they
are heading (like Captain Hook in Peter Pan) in only one direction: into the crocodile’s
jaws. Tick tock!
[i]
Schubert, Bernd, 2020. Beware of the Crocodile: Quantitative Evidence on How
Universal Old Age Grants Distort the Social Assistance Systems of Low‐Income
Countries. Poverty and Public Policy, Volume 12 Issue 2 pp188-205.
[ii] Merriam-Webster
helpfully provides a number of synonyms for “crock”, among them: balderdash,
baloney, bilge, blarney, blather, blatherskite, bosh, bull, bunk, bunkum,
claptrap, codswallop, drivel, drool, fiddle, fiddle-faddle, fiddlesticks,
flannel, flapdoodle, folderol, folly, foolishness, fudge, garbage, guff,
hogwash, hokeypokey, hokum, hoodoo, hooey, horsefeathers, humbug, malarkey,
moonshine, nonsense, nuts, piffle, poppycock, rot, rubbish, senselessness,
silliness, stupidity, taradiddle, tommyrot, tosh, trash, trumpery, twaddle.
[iii]
The share of the social assistance budget allocated to the child support grant
in Lesotho has increased from 6 percent in 2016/17 to nearly 10 percent in
2018/19, which suggests it is not simply crocodile-fodder!
[iv]
Eswatini’s education grant pays USD120 per academic year for 51,000
beneficiaries (nearly 5 percent of the total population) – again a fairly meaty
programme.
[v] Interestingly,
the paper rather disingenuously makes this same point when talking about the
Eswatini OAG. It argues “For a household with seven or more members (the
average household size of extremely poor households is 6.5), a grant of L400 is
insignificant”. Yet this ignores the fact that even in such an extreme case the
per person value of the Swazi OAG would still be over USD3.50 per month
compared with about USD1 per person per month for the same size of household on
Malawi’s SCT!
[vi]
The paper asserts, somewhat gratuitously, that “In 2005, Eswatini followed the
advice of HelpAge International (HAI) and of the Regional Hunger and
Vulnerability Programme (RHVP)—both financially supported by the UK Department
for International Development (DfID)—to launch a universal OAG”. In reality,
RHVP did not even begin until July 2005, some four months after the OAG had
made its first payments in April 2005! The OAG is a home-grown Swazi
initiative.
[vii] There is an incorrect suggestion (and a further sleight-of-hand over dates) in the paper when it states that “When Malawi in 2010 started to consider and eventually introduce social protection, it based it on a quantitative and qualitative analysis of the poverty and vulnerability of different population groups.” This ignores the reality that the SCT actually began in 2006, preceded by very little in terms of analysis.
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