social protection
TRANSCRIPT
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Social Protection and Social Risk Management: Poverty as the Inability to
Manage Risks
Amartya Sen and the Evolution of the Concept of Poverty
Leland Joseph R. de la Cruz
Director, Development Studies Program
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Triggers for a new approach
World Bank and IMF structural adjustments led to safety nets.
Social welfare adjustments in transition countries.
Increased globalization
East Asian crisis
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Globalization
Generates benefits but the benefits are not shared by all.
Increased inequality.
Increased vulnerability.
Reduced ability by the government to respond.
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East Asian Crisis
Recognition that non-poor can become poor.
Shocks can have long term consequences.
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“Sound macroeconomic policies, while of great
importance, are not sufficient for sustained
poverty reduction”.
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Vulnerability to economic risks
Economic crisis or transition
Change in prices of basic needs
Unemployment
End of source of livelihood
Low income
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Other sources of vulnerability
Environmental risks
Social/ Governance risks
Lifecycle risks
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Environmental risks
Flood, rains
Earthquake
Landslides
Drought
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Social/ Governance
Political instability
Exclusion/ losing social status/capital
Crime or domestic violence
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The poor are especially vulnerable
The poor are most exposed to diverse risks.
The poor are affected most by various shocks.
The poor have the fewest instruments to deal with risks. They thus resort to coping strategies which are counterproductive.
The poor have the least capacity to take risks.
Government cuts back on programs for the poor during crises.
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Poor women are even more vulnerable.
Less education
Less property rights
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Other highly vulnerable groups
Child
Labor
Disabled
Unemployed Youth
Orphans
Poverty
Inability to manage risks
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Why the poor are vulnerable
Lack of human capitalEducation, health
Lack of savings
Lack of access to social assistance
Voicelessness
Informal labor
Informal business
Insecure property rights
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Coping strategies of the poor
Reduce consumption of goods and services.Reduce consumption of food or alter the menu.
Withdraw children from school.
Make children and women work.
Sell (productive) assets.
DS
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Risk Management MechanismsAfter the event (ex post)
Coping strategies: relieve the impact of risk once it has occurred.
Before the event (ex ante)Prevention strategies
Prevent or reduce the probability of risk occurring.
Mitigation strategiesReduce the impact of the risk event.
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Risk Management Arrangements
Informal
Market-based
Public
Informal and market based arrangements are not effective in handling macro-risks. (War and conflict, widespread AIDS, price volatility, drought, macro-economic shocks)
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Strategies and Arrangements for Social Risk Management
Public Mitigation Strategies
Public Prevention Strategies
Public Coping Strategies
Public
Market-based Mitigation Strategies
Informal Mitigation Strategies
Risk Mitigation
Market-based Prevention Strategies
Informal Prevention Strategies
Risk Prevention
Market-based Coping Strategies
Informal Coping Strategies
Risk Coping
Market-basedInformal
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Informal Coping Strategies
Transfers
Child Labor
Dissaving in Human Capital
Sale of Assets
Migration
Borrowing from neighbors/ relatives/ friends.
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Public Coping Strategies/ Social Assistance Strategies
TransfersCash, in-kind benefits, food stamps, shelter provision, community-based social services, mobile health and education services
SubsidiesFood subsidies, health subsidies
Public Works
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Market-based Coping Strategies
Sale of financial assets
Borrowing from banks
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Informal Prevention Strategies
Multiple jobs
Migration
Hygiene and disease prevention
Proper feeding
Less risky production
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Public Prevention Strategies
Labor market policies
Infrastructural improvements
Macroeconomic policies
Disease prevention
Conflict prevention and resolution
Pre-service training
Child labor interventions
Public labor standards
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Market-based Prevention Strategies
In-service training
Market-based labor standards
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Informal Mitigation Strategies
Multiple jobs
Investment in human, physical and real assets
Investments in social capital
Share tenancy
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Public Mitigation Strategies
Pension systems
Asset transfers
Support for financial services to the poor
Mandated insurance
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Market-based Mitigation Strategies
Investment in multiple financial assets
Microfinance
Insurance
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Social Protection and Social Risk Management
Social protection has been associated with particular policies such as social assistance, labor market policies and pension provision.
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Social Protection and Social Risk Management
Lenses through which we can understand and deal with poverty.Identifies many forms of risks and vulnerabilities.Identification of strategies involving public, market, or informal arrangements that prevent risks or help affected sectors mitigate or cope with the effects of risks.
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Sources
World Bank (2001), Social Protection Sector Strategy: From Safety Net to Springboard.
Holzman, Sherburne-Benz and Tesliuc (2003), Social Risk Management: The World Bank’s Approach to Social Protection in a Globalizing World.
Ortiz (2001), Social Protection in Asia and the Pacific.
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Social Protection and Social Risk Management: Poverty as the Inability to
Manage Risks
Amartya Sen and the Evolution of the Concept of Poverty
Leland Joseph R. de la Cruz
Director, Development Studies Program