On Wednesday 21st September 2016, we heard the apparently joyous news that the International Labour Organisation (ILO) and World Bank had launched the Global Partnership for Universal Social Protection which “aims to make pensions, maternity, disability and child benefits, among others, available to all persons.” Does this send hope to developing countries that the World Bank is changing its approach to social protection, dropping its support for low budget, poverty targeted social assistance schemes and, instead, embracing inclusive lifecycle social protection while committing to realising the right to social security for all?
On Thursday 29th September 2016, we had our answer. In an article for the Guardian, Jim Yong Kim, the President of the World Bank, exhorted developing countries to implement conditional cash transfers (CCTs), the antithesis of universal social protection. CCTs target households living in poverty – rather than all persons – and, by using poor quality targeting methodologies such as the proxy means test, exclude the majority of their intended beneficiaries, while often causing division and conflict within communities. For example, Mexico’s famous Oportunidades programme has been found to have exclusion errors of around 70%, while the World Bank itself estimated exclusion errors of 93% in Indonesia’s Program Keluarga Harapan (PKH) CCT (Alatas et al 2014). And, as we should all know by now, there is no robust evidence on the value of implementing conditions, since all positive impacts on beneficiaries appear to come from the cash they receive (see this paper for further discussion).
Since CCTs are the World Bank’s social protection programme of choice, perhaps Jim Yong Kim was just showing consideration for his own staff. World Bank staff claim that their institution cannot give loans for unconditional programmes so entitlement schemes for all persons do not fit their business model. The last time the World Bank announced its support for universal social protection – in 2015 – we expressed our concern about the danger of unemployment for the World Bank’s social protection team and the need to provide them with a safety net (see blog by Nick Freeland). Kim’s support for CCTs is perhaps a signal that they are, in fact, in no immediate danger of losing their jobs. Indeed, like any good used car salesman, Kim used the Guardian interview to try and drum up business for his organisation: “We’re willing to provide financing for these conditional cash transfers,” he announced. There was no mention, though, of an offer to finance more effective, inclusive social protection schemes, of the type he appeared to agree with the ILO.
Bizarrely, Kim’s call for CCTs was in the context of an announcement to “name and shame” countries not doing enough to tackle undernutrition. Here he was, asking the countries he plans to name and shame to implement a type of social protection programme that will almost certainly exclude the majority of children – including most of those experiencing stunting – and is, as a result, relatively ineffective in addressing undernutrition. Universal and inclusive child benefits – of the type the World Bank and ILO claim to want – would be considerably more effective in tackling child poverty and undernutrition since they can reach all children. Yet, they are not on Kim’s radar, perhaps because his institution, apparently, cannot offer loans for them. Furthermore, because universal benefits are significantly more popular than targeted CCTs, they are likely to offer higher value transfers than CCTs, which further enhance their impact. For example, Mongolia’s universal Child Money programme offers transfers equivalent to 3.2% of GDP per capita, while Brazil’s mythical – but relatively ineffective (when compared to Brazil’s other social protection schemes) – Bolsa Unfamiliar programme only provides a transfer to children of 1.5% of GDP per capita. (For those wanting a more in-depth explanation of why this is the case, please read this paper on the Political Economy of social protection).
If Kim really is committed to universal social protection, he needs to adopt a more critical ear when receiving advice from his staff, who are evidently still finding it difficult to embrace a more inclusive vision. Since first committing to universal social protection in 2015, the World Bank has continued to push exclusionary and divisive poverty targeted programmes. For example, it has introduced a proxy means test in Bangladesh (thereby fanning the flames of political instability in the country), continued to promote the worldwide adoption of “unified targeting databases” – known as Social Registries – that, due to their high errors, are highly likely to exclude the majority of the poorest families from multiple social protection benefits and other social services, and even published a book extolling the virtues of the proxy means test for Africa, despite its high errors and arbitrary selection.
Perhaps a change of tactic is needed if the ILO is to be effective in persuading the World Bank to support universal social protection. Given that Kim is happy to “name and shame” developing countries, couldn’t the ILO use the same approach and name and shame those World Bank offices that promote divisive and exclusionary social assistance schemes? The ILO could produce an annual report on those World Bank offices and staff that actively undermine the efforts of developing countries to implement more inclusive social protection policies, giving it to Kim so that he can take action against the perpetrators? And, please, can’t the ILO ask Kim to establish a proper quality assurance mechanism to ensure that the World Bank no longer produces heavily biased research that distorts the evidence on the relative merits of inclusive and poverty targeted schemes (such as this example by the World Bank’s social protection team).
Come on ILO, we know you can do it!