Urgent: World Bank safety net needed

The original version of this blog appeared on Development Pathways

Beginning in the early 1980s, the World Bank (with the International Monetary Fund) foisted structural adjustment programmes on a variety of poor countries around the developing world. These programmes, based on the forced application of new ideologies of liberalisation and privatisation, led to massive unemployment, human misery and deprivation. Jobs were lost in government service (which had to be shrunk drastically), in state marketing boards (as trade was thrown open to the private sector) and in public services (where utilisation fell as a result of the introduction of prohibitive access fees).

In partial (and inadequate) response to this, the World Bank adopted the idea of “safety nets” to help the main losers and minimise social unrest. In 1987, to cushion the adverse effects of structural adjustment programmes on the poor, the Bank helped Bolivia to establish a first Emergency Social Fund (ESF) aimed at providing emergency relief through creating temporary employment and improving income. The Bank’s commitment to “safety nets for the poor” was set out in the World Development Report 1990: Poverty. And, after Bolivia’s ESF, the wave of social funds and public works spread to more than 60 countries, throughout Latin America, Africa, Asia and – from the 1990s – eastern Europe. By 2014, a World Bank review[i] counted 94 countries with public works programmes, often cleverly rebranded as “productive safety nets” rather than workfare.

Starting in 2001 and learning from existing programmes in Brazil and Mexico, the Bank began to support Conditional Cash Transfer (CCT) programmes…in Colombia, Jamaica, Turkey, the Philippines, Indonesia, Kenya and elsewhere; the same recent review counted 64 countries with CCTs in 2014. The Bank still confusingly termed these programmes “safety nets”: which was odd, because one of the key arguments it used to get around its own restrictive bylaws on providing loans for direct cash transfers was that CCTs had human development as their main objective. For the Bank, therefore, safety nets gradually became synonymous with social assistance and social transfers, but with distinctively neo-liberal characteristics: small-scale, poverty-targeted (usually using proxy means testing), involving a labour requirement or compliance with human capital conditions, and often with an objective of “graduation”. And so they have remained, rolled out as a kind of blueprint in tens of countries around the world, with technical support from a veritable army of World Bank technical experts with specific skill-sets.

Until now! On 30 June 2015 – seemingly out of the blue – the President of the World Bank, Jim Yong Kim, threw his organisation’s full weight behind universal social protection. In a joint statement with the ILO, he recognised the opportunity “to make universal social protection a reality, for everyone, everywhere”; and he even explicitly recognised that countries might prefer not to adopt the Bank’s established safety net blueprint: “There are many paths towards universal social protection. It belongs to each country to choose its own, and to opt for the means and methods that best suit its circumstances”.

The concept note supporting this bold statement contains no allusion whatsoever to poverty-targeting or proxy means testing; it doesn’t include the word “conditions” (still less the non-word “conditionalities”); it makes only one brief passing reference to public works programmes; the concept of “graduation” is totally absent; and the term “safety net” doesn’t even get a mention. Rather, the concept note recognises that social protection “is a human right that everyone, as a member of society, should enjoy, including children, mothers, persons with disabilities, workers, older persons, migrants, indigenous peoples and minorities”. The Bank’s stated objective is now “to increase the number of countries that can provide universal social protection, supporting countries to design and implement universal and sustainable social protection systems”.

This is of course excellent news for the wider cause of global social protection. But there must be concerns that – like structural adjustment three decades back – the imposition of this new ideology may entail serious human costs. In particular, it risks creating swathes of unemployment among the massed ranks of the World Bank’s safety net experts. What is to become of all those worthy Bankers whose skills, acquired and nurtured over the intervening years, have suddenly become redundant? This would include, for example: the multiple trainers on its annual social safety nets training course; the proponents of public works programmes with their endless discussions over setting the optimal wage rate and calculating the net present value of assets generated; the arcane wizards of proxy means testing, debating the sensitivities of equivalence scales and the merits of ordinary least squares over quintile regression (while still delivering a highly inaccurate targeting methodology); the fanatics of graduation, endlessly reworking their formulas and indicators to exit people from safety nets as fast as possible; and the advocates of conditionality, devising ever more complex experiments to try to demonstrate that attaching conditions to social transfers actually makes any difference (despite the accumulating evidence that it does not). All these, incompatible as they are with rights-based universal social protection, are now apparently relics of the past, consigned – like the poor laws and workhouses before them  – to the dustbin of social policy history.

So how can we help these unfortunate souls now they are no longer useful to the World Bank? With their redundant qualifications and outmoded skills, we must nonetheless hope against hope that they will be able access an adequate safety net. In particular, we must trust:

• That having spent so many years devising and imposing non-human rights based safety nets, they themselves are not now denied their basic human right to social security.
• That the poverty-targeting approaches they have designed are sufficiently responsive to detect their plight rapidly (though unfortunately the next retargeting exercise is not scheduled for another three years and may well be delayed further).
• That the proxy means testing formulas they have devised are sensitive enough to identify them as being particularly worthy of support, ideally without too heavy a weighting against asset-ownership, previous income or educational level of household head.
• That their once leafy, yet now deprived, townships around DC will be geographically targeted for inclusion in a putative Safety Net for Indigent Professionals (SNIP) emergency response programme.
• That they are physically robust enough to toil for hours each day in the torrid heat of the Washington sun, in order to receive a derisory wage set tantalisingly below the statutory minimum.
• That they are located close enough to basic health facilities and public educational establishments that they and their children will be able to comply with any necessary “human capital co-responsibilities”.
• That the graduation criteria for programme support are not set so low that they will have to exit the safety net before they have had time to equip themselves with the new skills needed to re-engage with the labour market.

This promises to be a true test of safety nets!

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[i] Oddly enough, The State of Social Safety Nets 2015 was published just a week after the President’s statement advocating universal social protection. Let us hope (a) that this was an unfortunate coincidence and not an early indication of dissent and recalcitrance among displaced World Bank staffers, and (b) that the hoped-for safety net is indeed up to the task of defusing any resultant internal unrest. We look forward already to the next edition of this flagship report, entitled, no doubt, The State of Universal Social Protection 2016!

Safety net ≠ social assistance

The original version of this blog appeared as a Pathways Perspective on Development Pathways

This is an appeal – primarily to the World Bank – to stop using (or abusing) the term “safety net”. For reasons best known to itself, the Bank now uses the term interchangeably with the term “social assistance”. But the two are not synonyms; and now, as it launches its new “Social Protection and Labor Strategy” for the next decade, is a propitious moment for the Bank to recognise this publicly, and to mend its semantic ways.

“Social assistance” defines a subset of social protection[i], comprising those social transfers that are non-contributory (ie which are funded from general government revenue, rather than from specific contributions by individuals). There are many definitions of social assistance[ii], but most people would agree that the key characteristics are regularity, predictability over the long term, government ownership, and entitlement.

“Safety nets”, on the other hand, is a dangerously elusive and baggage-laden term. It was originally coined by the Bretton Woods institutions in the 1980s and 1990s to refer to temporary measures to catch those who were transiently made vulnerable through structural adjustment and liberalisation. Most people continue to use it in this original narrower definition of a temporary social transfer project, usually operated for a finite period and often outside of Government structures.

The World Bank, however, has incrementally mutated the term “safety net” (often now prefaced with “social” – ie “social safety net”) to become synonymous with social assistance. Indeed the current draft of the “Strategy” makes this explicit, baldly stating on page 1: “Social assistance programs (also known as safety net programs…)”. In fact, social assistance programmes are not “also known as safety net programs” by the majority of people outside the Bank …nor should they be.

But, the Bank might say, terminology is allowed to evolve, and often does. Why should we object in this case? For three reasons, one definitional, one practical, and one Macchiavellian.

The definitional reason is that “safety net” is a clumsy and inadequate metaphor to capture what social assistance is meant to achieve. An actual “safety net” (eg one under a trapeze artist) is there to catch those who fall, no more, no less. Yet true social assistance, as the “Strategy” itself accepts in its belated adaptation of the “3Ps” framework, has three goals: (i) to catch people who fall (“protection”, or “equity” in Bank parlance), (ii) to prevent people from falling in the first place (“prevention”, or “resilience”), and (iii) to allow people, where possible, to raise themselves out of poverty (“promotion”, or “opportunity”). “Safety net” encapsulates only the first of these three goals. As a result of this deficiency, there has been a proliferation of slightly ridiculous terms such as “social springboards”, “social trampolines”, “safety ropes” and “safety ladders” to try to capture metaphorically the other functions of social assistance.[iii] There has also emerged the meaningless concept of “productive safety nets”: but how can a safety net be productive, either literally or figuratively? It is like talking about an “intelligent log” or an “emotional toothbrush”…or perhaps a “compassionate economist”!

The practical reason is that the use of “safety nets” as being synonymous with “social assistance” creates unnecessary confusion, because there is then no way of distinguishing temporary, short-term, discretionary measures implemented by external actors from guaranteed, long-term, entitlements offered by governments. And this is an increasingly important distinction in the social protection debate. There is certainly a continuing need to provide true “safety nets” in some instances, for example after a shock such as a drought, an earthquake or a dramatic rise in food prices, but this is not at all the kind of programme that the Bank is trying to promote in its new “Strategy” for 2012 to 2022, where the focus is on “the need to build a coherent portfolio of social protection and labor programs”, and whose “strategic direction is to help developing countries move from fragmented approaches to more harmonized systems”.

The Machiavellian reason is that it may suit the Bank to perpetuate the term to promote its own primary agenda: that of making loans. In the same way as subliminal advertising works, the use of the term “safety net” implies something temporary and finite, and may sub-consciously make governments more prepared to take on a loan than if the same package is dressed up as “social assistance” with its connotations of long-term commitment and rights-based entitlement. [This is the same logic as underpins the Bank’s promotion of conditional cash transfers, because it is much easier to sell loans for programmes that can be justified on their educational and health objectives than for child benefits or other forms of unconditional social assistance.] The only other explanation for the Bank’s reticence to change would be an inbuilt institutional inertia: in other words that so much has been invested in “safety net” websites, how-to tools, evaluations, reports, etc, that it now becomes too daunting to redo them all.

But whatever the explanation, the time has come to change. So, please, before the Bank goes final with its “Strategy”, could it (i) replace that definitional entry on page 1 with the wording: “social assistance (formerly, and sometimes still incorrectly, referred to as safety nets)…”, and (ii) replace all 100 or so other occurrences of the term “safety net” with the term “social assistance”, except in the rare instances where it is actually referring to a short-term response to transitory poverty, operated substantially outside of government social protection frameworks?

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[i]  Many would argue that “social security” (the term more commonly used in OECD countries) should also be used globally, in preference to “social protection”.

[ii]  There is some debate about whether “social assistance” itself is the best term for such non-contributory transfers, since it may have connotations of charity rather than entitlement.

[iii]  The previous iteration of the Bank’s strategy paper (for 2000-2008) was even called “From Safety Nets to Springboards”.