Social Protection in Developing Countries Essay

Social Protection in Developing Countries Essay

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The global crisis has sharply underscored the need to strengthen social protection institutions in developing countries, and especially in low income countries. Before the onset of the crisis in November 2008, a growing body of research had accumulated proving a comprehensive knowledge base demonstrating that social protection programmes are effective instruments in reducing poverty and enhancing human development.

In the decade prior to the onset of the crisis a large number among the new social protection programmes had emerged in the South with a specific focus on children. Children are the largest group within the global poor, and by investing in children’s development, social transfers contribute to providing a permanent exit from poverty. The focus on children signals the fact that social protection is as much to do with reducing current poverty, as with investing in the future (Barrientos & DeJong, 2006).

These programmes exhibit considerable diversity in terms of objectives and programme design. They can take the form of pure income transfers, like in the case of South Africa’s Child Support Grant, whereas other countries have adopted a different approach consisting in linking income transfers with basic service provision. For example, Mexico’s Oportunidades (previously known as Progresa), and Brazil’s Bolsa Familia, which provides income transfers to poor households on condition that they regularly send their children to school and that household members attend health clinics. In fewer countries, like in the case of Chile Solidario, income transfers are combined with a wide range of interventions in health, education, employment, and housing. Our focus on social protection programmes directly focusing on childr...

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... of revenue collection of the machinery of redistribution, important though these are. An optimal financing mix should do three jobs well: (i) generate the resources needed to establish and strengthen appropriate social protection systems; (ii) ensure that the incentives generated by the financing modalities reduce child poverty and child vulnerability; and (iii) secure legitimacy for social protection institutions and policies. Section three examines the main issues involved in financing social protection in low income countries, beginning with a discussion of trends in sub-Saharan Africa, and the issues raised by the current global crisis; followed by a discussion of alternative policy strategies adopted in three Latin American countries: the use of natural resources in Bolivia; budgetary surplus policies in Chile, and borrowing in Mexico. Section four concludes.

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