Although over one billion people in 146 countries now participate in at least one of roughly 475 social safety net programs, most of the extreme poor – those who live under
Nonetheless, the World Bank’s director for social protection and labour,
“There is a strong and growing body of evidence that social safety nets are one of the most cost-effective ways for the countries to end extreme poverty and promote shared prosperity,” he said.
Social safety net programs comprise transfers in cash or in-kind, designed to provide regular and predictable support to poor and vulnerable people.
The report highlights the role of the social safety net in reducing poverty, improving maternal and child health and nutrition, boosting school attendance and learning outcomes, and promoting sustained economic growth.
It is the first in a series of studies that will monitor and report on the growth and coverage of social safety nets in the developing world.
The report considers five types of social safety net programs: conditional cash transfers, unconditional cash transfers, conditional in-kind transfers, unconditional in-kind transfers, and public works.
It finds that one-third of beneficiaries live in upper-middle-income countries, whereas in low-income countries where 47 percent of the population is extremely poor, less than 10 percent have a social safety net support.
The two primary reasons for this, according to the report, are a lack of scaled-up social safety net programs in both low and middle-income countries, and the fact that social safety nets may not be specifically targeted at the income-poor, but instead focus more on improving nutrition or providing old age security.
Exponential growth in social safety nets has been achieved particularly with cash-based programs.
This has been particularly true in Sub-Saharan Africa, where the number of unconditional cash transfers – transfers of cash targeted at a particular category of people, for instance, pensions – has tripled from 2010 to 2013, and the number of countries that implemented these programs increased from 21 to 37 in the same period.
The largest programs in the world are in
“More could be done to assist the world’s poorest people,” he adds.
Lower-income countries face the most challenges in providing populations with safety nets.
In some 57 countries, social safety net coverage corresponds with the scale of poverty often measured by national poverty line. For example, in
However, there are about 50 countries where program coverage is below the scale of the poverty challenge. One is
As countries get richer, the aggregate spending on social safety nets rises – but not significantly, says the report.
Developing countries on average spend 1.6 percent of their GDP on social safety nets, while public policy measures such as fuel subsidies are much higher. For comparison, in the
“Even lower income countries such as
Further, the poorest people in the low-income countries are worse off when considering other capital flows, such as remittances – the money migrant workers send home – and external financing.
The study finds that remittances are ineffective in reaching the poorest households.
“Data from ASPIRE (Atlas of Social Protection: Indicators of Resilience and Equity) shows that in higher income countries, the majority of households receiving remittances are in the poorest quintiles,” Maddalena Honorati, an economist at the
“The pattern is reversed in lower income countries, where the poor are not well covered by social safety nets and most of the remittances recipients are in the richest quintile. Globally, less than 15 percent of the remittances reach the extreme poor.”
As for external financing, low-income countries are increasingly putting social safety nets programs “on-budget,” says the report. Donor financing, in some of the poorest countries, such as
On a more positive note, the report notes that many countries move from fragmented programs to integrated social protection systems. More mechanisms that help policymakers monitor the effectiveness of the programs have been developed.
One example of such a mechanism is the Cardastrosocial registry in
Currently around 68 countries have a national social protection strategy in place that outlines systemic approaches. In 2009, there were only 19. Moreover, 10 countries have introduced institutional bodies to coordinate social protection programs across sectors and ministries.
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