DOI: 10.1111/j.1468-2397.2011.00783.

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I N T E R NAT I O NA L
J O U R NA L O F
Int J Soc Welfare 2011: 20: 240–249 SOCIAL WELFARE
ISSN 1369-6866

Social protection and poverty ijsw_783 240..249

Barrientos A. Social protection and poverty Armando Barrientos

Int J Soc Welfare 2011: 20: 240–249 © 2011 United Nations Brooks World Poverty Institute, University of Manchester,
Research Institute for Social Development (UNRISD), Manchester, UK
International Journal of Social Welfare © 2011 Blackwell
Publishing Ltd and the International Journal of Social Welfare.
In the last decade, social protection has emerged as a policy Key words: social protection, social assistance, developing
framework employed to address poverty and vulnerability in countries
developing countries. The article links social protection to Armando Barrientos, Brooks World Poverty Institute,
new perspectives on poverty and vulnerability, identifies and University of Manchester, Humanities Bridgeford Street
discusses key issues in the emergence of social assistance Building, Oxford Road, Manchester M13 9PL, UK
programmes in developing countries, and assesses their poten- E-mail: [email protected]
tial contribution to addressing poverty and vulnerability in the
South. Accepted for publication December 21, 2010

protection programmes and policies in developing coun-

Introduction
tries against poverty reduction objectives. The focus of
In the last decade, social protection has emerged as a the third section is on social assistance, as it is the
policy framework employed to address poverty and vul- component of social protection that addresses poverty
nerability in developing countries. A range of factors most directly. A discussion of social protection expen-
signal the rise to prominence of social protection. Inter- diture and financing closes this section. Finally, a con-
national development organisations, especially agencies clusion gathers together the main points of the article.
within the United Nations family, have adopted and
adapted social protection strategies and policies.1 A The emergence of social protection in
growing number of national governments in the devel- developing countries
oping world are developing and adopting national social
protection strategies within their poverty reduction plan- Social protection is rapidly becoming a key component
ning. There is a rapid escalation in the number and of development policy. This section provides a descrip-
coverage of social assistance policies and programmes tion and definition of social protection, identifies the
being implemented in developing countries.2 There is key policy drivers and describes the scope of social
also rising interest in social protection among develop- protection as a policy framework.
ment researchers, development research institutes and
higher education. The article links the emergence of Social protection and development
social protection to new perspectives on poverty and
In the work of the ILO, social protection is associated
vulnerability, identifies and discusses key issues in the
with a range of public institutions, norms and pro-
emergence of social assistance programmes in develop-
grammes aimed at protecting workers and their house-
ing countries, and assesses their potential contribution to
holds from contingencies threatening basic living
addressing poverty and vulnerability in the South.
standards. Broadly, these can be grouped under three
The article has three main sections. The first section
main headings: social insurance, social assistance and
outlines the emergence of social protection as a policy
labour market regulation. Social insurance consists of
framework in the South. The second reviews poverty
programmes providing protection against life course
and vulnerability concepts and measures, noting the
contingencies such as maternity and old age, or work-
growing influence of multidimensionality in poverty
related contingencies such as unemployment or sick-
analysis. The third section assesses existing social
ness. Social assistance provides support for those in
poverty. Normally, social insurance is financed from
1 A number of multilateral and bilateral organisations and non- contributions by workers and their employers, whereas
governmental organisations (NGOs) have adopted social
protection, such as the Asian Development Bank (2001), social assistance is tax financed. Finally, labour and
Department for International Development (2005), HelpAge employment standards ensure basic standards at work
International (2003), Inter-American Development Bank and extend rights to the workers’ organisation and
(2000), International Labour Office (ILO, 2001), United
Nations (2000) and World Bank (2001).
voice. These institutions have been fully established in
2 For a database of social protection programmes in developing developed countries, but in developing countries their
countries, see Barrientos, Niño-Zarazúa and Maitrot (2010). development has been uneven.

© 2011 United Nations Research Institute for Social Development (UNRISD)

International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare.
240 Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
 Social protection and poverty

In the 1990s, the role and significance of social pro- measured. ‘Resourcist’ perspectives define poverty as
tection underwent an important transformation in ‘the inability of an individual or family to command
developing countries. Against a background of eco- sufficient resources to satisfy basic needs’ (Fields,
nomic crises, structural adjustment and globalisation, 2001: 73). These perspectives dominate discussions of
social protection in developing countries has increas- poverty and its measurement in developing countries.
ingly come to describe a policy framework for address- Social participation and inclusion perspectives define
ing poverty and vulnerability. It can be defined as poverty as exclusion from cooperative activity; those in
‘public actions taken in response to levels of vulner- poverty are not ‘able to participate in the social life of
ability, risk, and deprivation which are deemed socially a community at a minimally acceptable level’ (Kanbur,
unacceptable within a given polity or society’ (Conway, 1987: 64).4 These perspectives dominates discussions
de Haan & Norton, 2000: 2). As will be noted below, in of poverty in developed countries. There is no doubt
developing countries, the focus has been on social that these two perspectives can be easily linked. We
assistance. could define a level of resources required for social
There are several features distinguishing the emer- inclusion and participation, satisfying both resources
ging paradigm in developing countries. There, social and participatory requirements. Access to resources is
protection has a strong focus on poverty reduction and dependent on forms of participation and inclusion. Sen
on providing support to the poorest (Barrientos & demonstrated the limitations of resourcist approaches
Hulme, 2008), whereas in developed countries, the to poverty by underlining the distance existing between
emphasis of social protection is on income mainten- resources and wellbeing (Sen, 1985, 1999). He argued
ance and on protecting living standards for all (but that the appropriate space to assess wellbeing, and
especially workers). In developing countries, the focus therefore poverty as significant deficits of wellbeing, is
of social protection is not restricted to compensating that of capabilities and functioning broadly understood
those in poverty for their income shortfall, but rather as the capacity to achieve rational life plans. This article
aspires to have a broader developmental role. This is a often falls back on the resourcist approach for simplic-
very important point that is developed in more detail ity, but it is crucial to keep in mind the need to broaden
below. this approach further.
As a policy framework addressing poverty and vul- The poverty headcount rate denotes the share of a
nerability in developing countries, social protection is a population who are in poverty. It is usually based on
key component of development policy. The broader estimates of the number of households and individuals
developmental role of social protection in developing whose income or consumption are below the poverty
countries involves three main functions: (a) to help line, a socially defined minimum standard. This esti-
protect basic levels of consumption among those in mate of the number of households and individuals is
poverty or in danger of falling into poverty; (b) to then standardised as a proportion of the total popula-
facilitate investment in human and other productive tion. It is also important to know how poor those in
assets, which alone can provide escape routes from poverty are. Adding up the shortfalls experienced by
persistent and inter-generational poverty; and (c) to those in poverty – the gap between their observed
strengthen the agency of those in poverty so that they income or consumption, and the poverty line – yields
can overcome their predicament (Barrientos, 2009). the aggregate poverty gap. Distributing this gap across
the population, and dividing by the poverty line, pro-
vides a measure of the average depth of poverty, which
Poverty and vulnerability: concepts, measures
can allow comparison across time and countries. The
and dimensions
poverty headcount rate and the poverty gap rate are the
This section provides a brief review of poverty con- most often used aggregate poverty measures, capturing,
cepts, and then outlines recent developments concern- respectively, the incidence and depth of poverty in a
ing multidimensionality and vulnerability which have population.
contributed to the emergence of social protection. There are two areas of poverty research that have
been prioritised by poverty researchers: the multi-
dimensionality of poverty and its dynamics
Review of poverty concepts (Thorbecke, 2005). Developments in these two areas
Poverty describes a state in which individuals or house- have been fundamental to the emergence of social
holds show significant deficits in wellbeing.3 Different
perspectives on wellbeing and development emphasise
4 The distinction between the ‘resourcist’ and the ‘social par-
different spaces in which poverty can be observed and
ticipation’ perspectives on poverty has a bearing on the
related distinction between ‘absolute’ and ‘relative’ poverty
3 Poverty is a state rather than a condition: people are not poor; approaches dominating poverty discussions in developing
they are in poverty. and developed countries, respectively.

© 2011 United Nations Research Institute for Social Development (UNRISD)

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Barrientos

protection as a policy framework. Increasingly, social

Vulnerability
protection interventions are based on a multidimen-
sional perspective on poverty, which is reflected in the A key dimension of poverty is duration, but its analysis
widening scope of social assistance programmes with has lagged in developing countries, despite its impor-
an emphasis on combining and integrating interven- tance in the context of establishing patterns and causes
tions. One particular dimension of poverty is its dura- of mobility into and out of poverty (Hulme & Shepherd,
tion and persistence. Again, new forms of social 2003). One of the reasons for this has been the scarcity
assistance pay special attention to this issue, and aim to of longitudinal datasets in developing countries. The
break the persistence of poverty across generations and headline finding from the research of the Chronic
to prevent vulnerable households from falling into Poverty Research Centre (CPRC) is that around 40 per
poverty. Vulnerability provides a more dynamic per- cent of those in poverty in the developing world are in
spective on poverty. These two areas are briefly exam- persistent or chronic poverty, confirming that poverty
ined below. duration is a significant issue (CPRC, 2005).
More recently, the focus of this work has moved on to
the notion of vulnerability as a prospective approach to
Multidimensionality poverty duration. Vulnerability can be defined as the
There is a broad consensus among poverty researchers probability that individuals, households or communities
around the view that poverty is multidimensional.5 will be in poverty in the future.6 As with multidimen-
Households in poverty show consumption deficits often sionality, there are significant difficulties involved in
linked to restricted access to basic services, limited identifying and measuring vulnerability. The core diffi-
networks and limited access to economic opportunity. culty is establishing, on the basis of present and/or past
Typically, households in poverty show deficits along information, the likelihood that people will be in
many dimensions of wellbeing at the same time. poverty in the future. This is intrinsically a predictive
There are several difficulties involved in operation- exercise, with all the methodological problems involved
alising this perspective, and so far, no agreed (Hoddinott & Quisumbing, 2003). However, the gains
methodological approach to the identification and mea- from this approach could be large. The significance of
surement of multidimensional poverty has emerged. vulnerability has been apparent to researchers working
Identification is a problem. There is no agreement on on poverty traps.7 Vulnerability is not only a dimension
the main dimensions of wellbeing and poverty upon of poverty, but can also be a cause of poverty and its
which analysis should focus. It is disputed, by Sen persistence. The view that ‘poverty begets poverty’ has
(1993) and others, that a definitive listing of dimensions been a commonplace in analysis on the subject.
is feasible or desirable. It is easier to identify a set of Vulnerability sheds light on how this applies in
basic dimensions for the purposes of poverty analysis developing countries. The likelihood of future poverty
(income, employment, nutrition, health, education, may force some households currently in poverty to
shelter and information, for example) around which adopt protection strategies that are dysfunctional in the
consensus could be easily reached, but it is more diffi- sense that they could end up reinforcing poverty and
cult to arrive at consensual measures for security, inclu- could even trap the households into long-term poverty.
sion and negative freedoms (Thorbecke, 2005). Setting The list of micro-strategies that fit into this category is
poverty lines for each of these dimensions is a complex a long one in developing countries and includes: reduc-
task. Assuming that identification issues could be ing the number and quality of meals (Schubert, 2008);
resolved and basic thresholds agreed, a central concep- postponing health-related expenditure (Cutler et al.,
tual issue is how these different dimensions relate to 2000); withdrawing children from school and/or engag-
each other, especially whether deficits in one dimension ing in child labour (Emerson & Portela Souza, 2003);
could be compensated for with sufficiency in others or engaging in informal employment (Lund & Srinivas,
whether they compound deficits in other dimensions. 2000); adopting less productive, but safer, crops
(Morduch, 1995); and resorting to adverse incorpora-
5 See, for example, the description of poverty in the 1995 tion as a means of protection, for example by trading
Copenhagen Programme of Action of the World Summit for autonomy and the potential for economic improvement
Social Development. ‘Poverty has various manifestations, in exchange for security from elites or patrons (Wood,
including lack of income and productive resources sufficient 2001). Vulnerability can itself contribute to chronic
to ensure sustainable livelihoods; hunger and malnutrition; ill
health; limited or lack of access to education and other basic poverty. Rational but detrimental responses to
services; increased morbidity and mortality from illness;
homelessness and inadequate housing; unsafe environments; 6 Those currently in poverty have a significantly higher prob-
and social discrimination and exclusion. It is also charac- ability of being poor in the future. Groups in chronic or
terized by a lack of participation in decision-making and persistent poverty are highly vulnerable. ‘Poverty traps’
in civil, social and cultural life’ (United Nations, 1995: describe acute vulnerability.
paragraph 19). 7 For a review, see Barrientos (2007).

© 2011 United Nations Research Institute for Social Development (UNRISD)

242 International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare
 Social protection and poverty

vulnerability are difficult to identify and measure thereby weaken social exclusion, advancing the partici-
empirically, but an emerging body of research is pation of the poorest in their communities and soci-
making this link with growing confidence. More impor- eties. By comparison with its essentially residual and
tantly, the findings from this research suggest that these compensatory role in developed countries, social assis-
feedback effects may be quantitatively dominant in tance in developing countries has a very different role.
explaining the impact of vulnerability on persistent In developing countries, social assistance has a primary
poverty (Elbers, Gunning & Kinsey, 2003). role within social protection and is developmental in
scope.
Trends in social insurance in developing countries
Key issues in social protection in
have been mainly negative over the last two decades,
developing countries
showing a decline in those areas of the developing
This section contains a discussion on programme world where it had previously been significant (Latin
design, financing and expenditure. America and transition countries, especially China) and
stagnation in countries where it had reached only a very
small share of workers (South Asia and sub-Saharan
Why focus on social assistance?
Africa). The only significant recent extension of social
This section focuses on social assistance. It is the com- insurance worth noting is the 30 baht basic health insur-
ponent of social protection with the strongest focus on ance in Thailand and the Unorganised Sector Workers
poverty reduction, the topic of this article, and it is also Social Security Scheme Bill in India aiming to incor-
where change, innovation and expansion have concen- porate the majority of informal workers into a basic
trated in the last 15 years. social insurance scheme. A key factor explaining the
It is important to note from the outset some key stagnation or decline of social insurance coverage in
differences in the function, scope and scale of social developing countries is labour market liberalisation, in
assistance programmes in developing countries, com- many cases associated with globalisation.
pared with those in developed countries. In developed By contrast, there has been a very rapid extension of
countries, social assistance is largely a residual safety social assistance programmes in developing countries
net charged with protecting a small minority of indi- over the last 15 years. This has come in many forms: the
viduals and households from the effects of poverty, introduction and extension of pure income transfers
after all the other components of social protection such as non-contributory pensions or child-based
(social insurance, basic services, labour market regula- transfers; income transfers conditional on work, for
tion) have proved unsuccessful. In developing coun- example public works or employment guarantee
tries, where social insurance covers at best a minority of schemes; income transfers combined with services
the labour force, basic services are highly stratified, such as conditional cash transfers or integrated social
labour market regulations are thin and poorly enforced, assistance schemes; and, more recently, the develop-
and the incidence of poverty and vulnerability is high; ment of integrated poverty reduction programmes.
social assistance is the primary – and sometimes the (These are reviewed in more detail below.) There has
only – social protection instrument addressing poverty been a large measure of innovation in the design of
and vulnerability. social assistance programmes in developing countries.
The primary role of social assistance in developing Scale is also important. In a very short time, social
countries calls for fresh approaches and models. As assistance programmes have been introduced and
noted above, in developing countries, social assistance expanded. The Minimum Living Standards Scheme
is called to play a broader role than in developed coun- in China, for example, expanded from 2.4 million
tries, as a key component of development policy. As in beneficiaries in 1999 to over 22 million in 2002, as the
developed countries, social assistance aims to ensure economic restructuring led to a rapid increase in unem-
minimum levels of consumption that protect poor ployment among workers in state-owned enterprises.
households from the worst effects of deprivation. In The Child Support Grant in South Africa was intro-
addition, social assistance in developing countries is duced in 1998 and rapidly scaled up to over 8 million
expected to strengthen productive capacity, whether beneficiaries in 2009. Bolsa Familia, a programme pro-
through investment in human or physical assets.8 It is viding income transfers to poor families with children
also expected to bridge access to basic services and of school age in Brazil, reached over 12 million house-
holds in 2010. The Employment Guarantee Scheme in
8 Garfinkel, Rainwater and Smeeding (2010) have provided an India reached 48 million households in 2008. As the
interesting discussion of the role of welfare programmes in transfers support entire households, the number of
promoting investment in education in the context of the USA.
They refute the often observed criticism that welfare pro-
those in poverty reached by these transfers is consider-
grammes undermine productivity and limit economic ably larger. In South Africa, it is estimated that one in
growth. two households benefit from income transfers (one in

© 2011 United Nations Research Institute for Social Development (UNRISD)

International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare 243
Barrientos

four in Mexico). The rapid extension in the reach of Much discussion within social protection in devel-
social assistance programmes in developing countries oping countries has focused on the advantages and
explains the focus on social assistance.9 disadvantages of specific instruments. Most social
assistance programmes include an income transfer as a
primary or secondary instrument. Income transfers
Programme design and objectives
have a number of advantages relative to alternative
This subsection focuses on discussing social assistance design options. They can be implemented and scaled up
programmes, their characteristics and key design relatively quickly, have an immediate impact on con-
issues. sumption and are capable of reaching the very poorest.
In the extension of social protection and social assis- Having noted this, it is highly unlikely that a single
tance in developing countries in the last decade and a social protection instrument could achieve the manifold
half, income transfers dominate, but they are increas- objectives of protecting household consumption, pro-
ingly combined with other interventions targeting moting asset accumulation, strengthening productive
human development. The focus below is on regular and capacity and inclusion, and reducing poverty, vulner-
reliable social assistance programmes,10 excluding one- ability and inequality. It is therefore vitally important
off, or short-term, humanitarian or emergency assis- that discussions around design options shift from the
tance.11 It will be useful to classify social assistance current focus on single instruments to a broader focus
programmes into: on integrated programmes, or a mix of programmes,
capable of progressing the different objectives of social
• Pure income transfer programmes, which include
protection among the poor and poorest. The experience
transfers targeted to poor households, categorical
in Latin America with programmes combining transfers
transfers such as children and family allowances,
and services shows that they can be effective both in
and social pensions (categorical transfers target spe-
improving consumption and facilitating human devel-
cific groups thought to be especially vulnerable).
opment objectives. It also demonstrates that the
• Income transfer programmes conditional on the
programmes’ effectiveness increases where comple-
supply of labour, which require that beneficiaries
mentary interventions are included, such as skills,
supply labour for specific periods of time and are
employment, saving and participation. Moving progres-
tied to the improvement of infrastructure or commu-
sively towards integrated social protection programmes
nity services.
for the poor and poorest is the main challenge for the
• Income transfer programmes conditional on
future. Integrated poverty reduction or eradication pro-
human capital investment, which include human
grammes place much greater demand on resources and
development-targeted transfers schemes, also
capacity, especially as they involve the coordination of
referred to as conditional cash transfers. These
different agencies or the consolidation of pre-existing
focus largely on education, health and nutrition,
programmes.
and aim to break the persistence of poverty across
The extent to which social protection interventions
generations.
should select beneficiaries based on their poverty status
• Integrated poverty reduction programmes, which
has attracted some attention in the literature. A great
constitute an important new innovation in social
deal of discussion on this is pitched around the effec-
assistance, combining a range of interventions
tiveness of selection, with those arguing against selec-
focused on the poorest.
tion emphasising the costs associated with selecting
Table 1 provides summary information on these beneficiaries, in terms of administration and stigma.
types of programmes in developing countries. Key However, the high incidence of poverty in developing
design features and impact are then discussed. countries makes the selection of beneficiaries a neces-
sity where resources for poverty reduction are insuffi-
cient to reach everyone. Selection is also discussed in
9 It is important to keep in mind that while social assistance the context of the dynamics of poverty reduction in a
has made huge advances in reaching those in poverty, social
assistance budgets are relatively small, compared with social political economy context. In Latin America in particu-
insurance budgets, for example, which limits their impact on lar, the selection of beneficiaries through a process of
poverty reduction. ranking households according to the extent of their
10 Emergency and humanitarian transfers are different in kind poverty has constituted a response to widely held con-
(Harvey, 2005).
11 This section does not cover in-kind transfers, which support cerns that anti-poverty programmes in the past proved
households in poverty with food or other necessities (food- ineffective because of political clientelism and corrup-
based transfers are important in parts of Africa and South tion. The selection of beneficiaries through agreed and
Asia), nor input grants for small-scale farmers, involving
tools or seeds, for example, that are in place in some coun-
transparent methods can build credibility and political
tries in Africa (Malawi) and South Asia (Bangladesh). These support for social protection interventions. Combining
are mostly one-off or irregular transfers. attention to the costs of selection, to the influence of

© 2011 United Nations Research Institute for Social Development (UNRISD)

244 International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare
 Social protection and poverty

Table 1. Social assistance in developing countries: programmes and objectives.

Instruments Examples of programmes Objectives

Pure income transfers

Income transfers targeted to poorest Kalomo pilot social transfer scheme, Zambia; Reduce poverty and vulnerability among poorest
Mchinji pilot social transfer, Malawi households without economic capacity and with children
Categorical income transfers: social Social pensions in Botswana, Lesotho, Reduce poverty and vulnerability among older people and
pensions and child transfers Mauritius, Namibia, South Africa, Bolivia, their households
Brazil, Bangladesh, India, Nepal
Child Support Grant, South Africa Reduce household poverty and facilitate investment in
schooling, helping break poverty persistence across
generations
Income transfer conditional on work
Public works, cash-for-work, Employment Guarantee Scheme, India In rural areas, to smooth seasonal income fluctuations. In
employment guarantees urban areas, to reduce poverty caused by unemployment
Productive Safety Net Programme, Ethiopia
and underemployment
Income transfers conditional on human
capital investment
Human development-targeted Bolsa Familia, Brazil; Oportunidades, Mexico Supplement income for poorest households to ensure
conditional transfers improvements in consumption; facilitate investment in
nutrition, healthcare and schooling; and ensure
availability and utilisation of basic services aiming to
reduce inter-generational persistence of poverty
Integrated poverty reduction programmes
Integrated poverty reduction/ Challenging the Frontiers of Poverty Stabilise consumption of poorest households and improve
eradication programmes targeting the Reduction, Targeting the Ultra Poor, their human and productive asset base to the point
extreme poor Bangladesh where conventional micro-finance programmes could
help asset accumulation.
Chile Solidario, Chile Eradicate extreme poverty caused by social exclusion by
supporting poorest households in achieving minimum
thresholds across seven main dimensions of wellbeing:
income, employment, housing, health, education,
registration and household dynamics

Source: Barrientos et al. (2008).

programme design on the dynamics of social protection households’ out-of-pocket expenditures and informal
expansion, and to strengthening solidarity and support- provision to a more diversified mix (Barrientos, 2008).
ing shared values of social justice are crucial challenges This is clear in the context of the introduction of health
for social protection in developing countries. insurance institutions. In their absence, out-of-pocket
household expenditure on healthcare is often inefficient
as well as insufficient because, first, responses to health
Financing and capacity constraints
shocks can crowd out investment in preventive care,
One of the main challenges facing the extension of and second, they are rationed by available resources.
social protection in developing countries is financing. Health insurance instruments can improve the effi-
These concerns are stronger in the case of low-income ciency of households’ health expenditures and make
countries (Smith & Subbarao, 2003). The concern is resources go further.
less about affordability than about long-term sustain- The costs of social assistance programmes focused
ability. Affordability is less of an issue when the costs on the poor and poorest are small in absolute terms.
of not having social protection are factored in. The Income transfers in Latin America are below 1 per cent
current gaps in effective social protection have signifi- of gross domestic product (GDP) (this is considered in
cant costs to society in terms of poverty and vulnerabil- greater detail in the next subsection). This is not to say
ity (ILO, 2005). These gaps place restrictions on the that financing the extension of social assistance will be
development of human capital, which themselves easy. The route to the expansion of social protection
become a constraint on growth and development. The followed by today’s developed countries was through
costs to individuals and households associated with payroll taxes to finance social insurance, but this is an
their vulnerability can be high. unlikely route for countries in which the majority of the
In this context, it is helpful to see the extension of labour force works informally. The constraints to
social protection, not as ‘new’ expenditure, but as a financing social protection and assistance in poorer
shift in the financing mix. Extending social protection countries are significant. In low-income countries in
involves moving away from an exclusive reliance of sub-Saharan Africa, poor revenue mobilisation is an

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Barrientos

important barrier to the extension of social assistance.

Social protection expenditure and poverty
In countries where 15 per cent of GDP, or less, is
mobilised for public spending, the fiscal space for an National governments have the leading role in the
extension of social assistance is very limited, even if extension of social protection and assistance. Analysis
programmes for the poorest are kept below 1 per cent of of their resource allocation to social protection and
GDP. International aid can ease the costs associated assistance would, in principle, provide a window into
with the initial introduction or scaling up of social existing priorities and achievements in these areas.
assistance programmes, but longer-term sustainability However, the measurement and analysis of government
remains an issue. New aid modalities, such as general social protection expenditures are, in practice, beset by
budget support, could extend the time frame for difficulties and gaps in data. There is no consensus on
external support for social protection in low-income the scope of public social protection and, until recently,
countries. no agreed guidelines for measuring government social
Capacity limitations are a further barrier to the protection expenditures. With these caveats, this
extension of social protection in developing countries. section looks into trends in public expenditure on social
These apply at several points in the policy cycle, begin- protection and assistance. Two questions are important:
ning with the capacity to study, measure and analyse is government social protection expenditure associated
poverty and vulnerability; the capacity to design and with improved poverty indicators?; and what is the
implement appropriate policies; and the capacity to appropriate level of government social protection
deliver and evaluate social protection programmes. On expenditure among developing countries?
the ground, a successful extension of social protection We could approach the first question by checking
will involve the vertical integration of poverty research- whether higher levels of social protection expenditure
ers, policy analysts, political scientists, financial are consistent with lower current poverty at the country
experts, programme managers, information systems level. Given year-on-year variations in public expendi-
analysts and developers, accountants and field officers. ture and gaps in information, it is essential to focus on
Developing these capacities in low-income countries data covering a longer period. Besley, Burgess and
has not been an explicit objective of policy makers, Rasul (2003) focused on two measures of social pro-
research institutes or international organisations. In tection expenditure: (a) government expenditure on
many low-income countries, government restrictions social security and welfare as a proportion of GDP; and
on recruitment and salaries, as well as ‘departmental- (b) transfers to organisations and households also as a
ism’, make it unlikely that government agencies could proportion of GDP. The data are taken from the Inter-
develop these networks and ensure their integration. national Monetary Fund Government Finance Statis-
Engaging international NGOs to fill in this gap pro- tics, averaged over 5 years through the period 1972–
vides a short-term palliative, but not a longer-term, 1997. Table 2 below reports on a simple regression of
solution. This is an area in which technical fixes may be alternative measures of government expenditure and
feasible – for example through donor support for the expenditure on social protection taken from the above-
development of the appropriate skills – and there is also mentioned study, on alternative measures of poverty
the potentially significant role of intergovernmental headcount rates for 2005. The estimated coefficients
transfers of information, knowledge and know-how provide information on the correlation of longer-term
across the developed and developing world, and within measures of expenditure, on the one hand, and current
the latter. poverty measures, on the other.

Table 2. Long-term social protection expenditure and current poverty.

Dependent variable Poverty headcount rate using national poverty lines Poverty gap at US$2 as % of poverty line

Independent variable Social security and welfare Transfersb Governmentc SSWa Transfersb Governmentc
(SSW)a

Coefficient (standard error) -1.76 (0.54) -1.59 (0.52) -0.80 (0.22) -1.94 (0.43) -1.62 (0.43) -0.56d (0.22)
Adjusted R2 0.165 0.180 0.190 0.259 0.250 0.089
Number of countries 49 37 51 54 43 56

Notes: a Social security and welfare expenditure as a percentage of GDP, 1972–1997. b Transfers to organisations and households as a percentage of
GDP, 1970–1997. c Total government expenditure as a percentage of GDP, 1970–1997. d Significant at 5 per cent; all other coefficients significant at
1 per cent.
Sources: SSW, transfers and government are taken from Besley et al. (2003); poverty headcount and gap measures are taken from World Develop-
ment Indicators 2005 (World Bank, 2005). The estimated coefficients have not been tested for potential heteroscedasticity.
GDP = gross domestic product.

© 2011 United Nations Research Institute for Social Development (UNRISD)

246 International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare
 Social protection and poverty

Perhaps not surprisingly, this basic exercise reveals a Table 3. Government expenditure on social protection, social
strong correlation existing between long-term levels of insurance and social assistance as per cent of GDP in selected
countries.
social protection expenditure and current poverty. The
results indicate correlation, not causation. Replacing Country (year) Social Social Social
social expenditure measures with total government protection insurance assistance
expenditure as a proportion of GDP produces similar Argentina (2004) 9.2 7.7 1.5
results, at least for the poverty headcount rate, suggest- Brazil (2004) 13.2 11.7 1.4
ing that social protection expenditure might be simply a Chile (2003) 7.6 6.9 0.7
proxy for total government expenditure (i.e. it could be Colombia (2004) 6.5 5.9 0.6
Dominican Republic (2004) 2.4 0.7 1.7
possible that it is the size of government rather than Guatemala (2000) 1.8 0.7 1.1
social protection expenditure that is captured by the Mexico (2002) 3.5 2.6 1
correlation between expenditure and poverty headcount Peru (2004) 3.6 3.1 0.5
rates). Bangladesh 3.8 0.3 0.1
Indonesia 1.9 1.3 0.3
The relationship existing between government social Mongolia 10.5 7.8 1.1
protection expenditure and poverty reduction is also Nepal 2.2 1.0 0.1
likely to be mediated by other factors in important Pakistan 2 1.7 0.1
Vietnam 3.5 1.9 0.5
ways, for example by the pattern and size of vulner-
ability in a country, the incidence of both vulnerability Notes: Social protection expenditure includes expenditure on social
and government social protection expenditure, and the insurance, social assistance and other programmes, such as housing,
effectiveness of social protection schemes. In fact, the municipal and community services.
Sources: Data for Latin American countries were taken from Lindert
computed adjusted R2s, indicating the proportion of et al. (2005); data for Asian countries came from Baulch et al. (2006).
the variation in the dependent variable explained by the Data points are from the early 2000s for Asian countries.
variation in the independent variables, suggest that GDP = gross domestic product.
long-term social protection expenditure measures
account for only a fraction of the variation in current
poverty. devoted to social protection suggests that the level of
It is also crucial to keep in mind that government expenditure is, to an important extent, a policy variable,
social protection expenditure is a subset of all social rather than simply the outcome of deterministic factors
protection expenditures. These include corporate and (such as the level of development, economic structure
not-for-profit social protection expenditures and, and so on). Social protection expenditures are therefore
importantly, private or household social protection mediated by policy processes to a very significant
expenditures. In developing countries, off-budget inter- extent. The balance of expenditure between social
national aid expenditures on social protection can be insurance and social assistance is noteworthy. Social
significant. As a consequence, increases in government assistance expenditure is a fraction of that of social
social protection expenditures might not add up to an insurance, even in the case of Latin American countries
increase in total social protection expenditure, for where the latter was measured in net of contributions
example where rising public expenditure crowds out (i.e. as the fiscal support for social insurance schemes).
private expenditure on social protection. However, Finally, the range of public expenditure on social assis-
this re-balancing of the social expenditure mix can tance is considerably narrower than the same range for
be welfare enhancing, as in the case of health social protection. Among Latin American countries, the
insurance schemes replacing out-of-pocket payments range is from 0.5 to 1.5 per cent of GDP, whereas in
by households. Asia, it is lower at 0.1 to 1.1 per cent of GDP.
What is an appropriate level of public expenditure on It would be unsafe to assume all social protection
social protection and assistance? Here, we take a posi- expenditure to be poverty focused. Lindert, Skoufias
tive approach to this question, which is to consider and Shapiro (2005) developed a detailed analysis of the
current levels of expenditure in developing countries. components of social protection expenditures for a
Analysis of government social protection expenditure range of countries in Latin America. They found that
is severely constrained by the lack of reliable data. government social insurance expenditure (net of con-
Comparative research on this issue is stronger for Latin tributions) is highly regressive. In their estimation,
America, both because of better data and a growing ‘those in the top quintile of the population receive about
interest in the poverty reduction potential of social 60% of net social insurance transfers’ (Lindert et al.,
insurance and social assistance. 2005: 43). Some social assistance expenditure is
Table 3 shows the main components of social pro- regressive, too, but the bulk of expenditure reaches
tection expenditure, social insurance and social assis- those in poverty. The fact that overall spending on
tance for selected countries in Latin America and Asia. social assistance programmes is low limits the impact
The large variation across countries in the share of GDP of this expenditure on poverty. Some governments in

© 2011 United Nations Research Institute for Social Development (UNRISD)

International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare 247
Barrientos

the region – in particular Mexico, Argentina and Brazil The extension of social protection in developing
– are committed to a very gradual re-balancing of countries has focused on social assistance, as opposed
expenditure, away from social insurance and towards to social insurance or labour market regulation. In the
social assistance. last 15 years, there has been a great deal of innovation
To recap, there are significant gaps and considerable in social assistance programmes, and a step increase
difficulties involved in measuring social protection in in their reach. Regular and reliable social assistance
developing countries, with available data being limited programmes based around income transfers, but
and patchy.12 Higher levels of long-term government increasingly combining access to basic services and
social protection expenditures are correlated with lower investment in human development, now reach a signifi-
poverty indicators, regardless of whether the poverty cant proportion of those in poverty in the global South.
headcount or the poverty gap was used. It is likely that Where impact evaluation results are available, they
the level of public expenditure on social protection is show that new forms of social assistance have reduced
one among a number of factors influencing poverty. poverty and raised human development. However, only
There is considerable variation in public expenditure on a fraction of social assistance programmes are able to
social protection as a proportion of GDP, suggesting produce robust evidence on impact.
that there is no unique level of public expenditure on The extension of social protection in developing
social protection to target. The distribution of expendi- countries faces several constraints that will need to be
ture among the different components of social protec- overcome. These constraints are more acute for low-
tion is perhaps of greater significance in the context of income countries. Among these constraints, finance is
poverty reduction. For a small sample of countries with a key barrier to the extension of social protection. The
available data, it appears that social insurance accounts issue is long-term sustainability, as developing coun-
for the largest share of expenditure. Social assistance, tries are not in a position to finance the extension of
the component of social protection with the strongest social protection through payroll taxes, central to the
focus on current poverty reduction, accounts for a emergence of the welfare state in developed countries.
small fraction of expenditure, ranging between 0.1 and Alternative sources of resource mobilisation will be
1.7 per cent of GDP. needed. Capacity constraints are a problem in low-
income countries, but this is a more tractable issue than
finance. Successfully combining poverty reduction,
Conclusion insurance and redistribution objectives will also
The article aimed to provide an overview of social require continued innovation in programme design.
protection, as well as an assessment of its potential Transforming time-limited interventions into well-
contribution to addressing poverty and vulnerability in supported and resourced institutions will also be a
developing countries. challenge. The 2008 global financial crisis has created
In developing countries, social protection has new opportunities for the extension of social protec-
emerged as a policy framework addressing poverty and tion, especially as countries with established pro-
vulnerability, in the context of economic and financial grammes found themselves in a stronger position to
crises in the 1980s and 1990s, structural adjustment and reduce its adverse effects. At the same time, the crisis
globalisation. Rising poverty and vulnerability follow- will reduce the resources available for the extension of
ing the 1980s ‘lost decade’ in Latin America, the social protection, through its impact on international
financial crises in 1997 in Asia and rapid economic aid and fiscal revenues. The future of social protection
transformation in transition economies demonstrated in developing countries is bright and promising, but
the need to establish strong and stable institutions not yet secure.
directly concerned with reducing and preventing
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