17 August 2015

Social programmes: consensus on their usefulness, disagreement on their funding

At a time when social protection is increasingly under scrutiny because of austerity measures in rich countries and as it has become even more necessary as the economic crisis and its consequences hit the most vulnerable, at the international level, and particularly for the poorest countries, its usefulnes is more and more acknowledged.

For example, during the Third International Conference on Financing for Development held in Addis Ababa, participating countries approved a new social compact that stresses the need to implement social protection systems and measures for all. On hungerexplained.org, we have already had recently the opportunity to give space to those who, for years, have been emphasising the potential of targeted social protection programmes, particularly cash transfer programmes, in the combat against hunger in rural as well as urban areas. [read here]

In a report it published last month, the World Bank also underlines the importance and the key role social safety nets can play in the fight against poverty. While it is estimated that  approximately USD9000 billion were spent on social  programmes in OECD member countries in 2011 [read here], according to the World Bank, only USD329 billion have been allocated to social safety nets in the so-called ‘developping countries’ between 2010 and 2014. These safety nets benefitted 1.9 billion individuals in 136 countries and comprised in particular nutrition, public works and cash transfer programmes, the latter representing more than one third of the social programmes implemented.

Using highly criticised estimates [read here], the World Bank estimates that safety nets allowed an reduction by 8% of the poverty headcount rate and by 15% of the poverty gap, and that every dollar transfered generated between 1.08 and 2.52 additional wealth in the societies concerned.

If everyone probably agrees nowadays on the usefulness of social programmes to combat hunger and poverty, and on the impact they have on economic growth and development, the issue remains as to how they could be funded. It is not by want of wealth, as there are plenty financial resources available that are rapidly concentrating in the hands of a few priviledged persons, by lack of a fiscal system that would impose a more equitable income tax. Big companies, particularly multinational, succeed in ‘optimising’ their taxes and in being less taxed than other tax payers, when they do not succeed in escape entirely paying taxes on their profits. The disagreement, in Addis Ababa, between OECD countries and the rest of the world, does leave much hope for the future, if not a simple statu quo ante.

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To know more:

1. -World Bank, The State of Social Safety Nets 2015, 2015
   

2. -Sundaram. J.K., Opinion: No Aid, No Tax, No Development, Inter Press Agency, 2015
   

3. -Hickel, J., Exposing the Great 'Poverty Reduction' Scandal, Common Dreams, 2014
   

Selection of earlier articles on hungerexplained.org related to the topic:

1. -Strengths and weaknesses of the agreement reached at the Addis Ababa Conference on Financing for Development, 2015
   

2. -Cash transfers to eradicate hunger, 2015
   

3. -Intergenerational equity is possible, provided there is a fundamental change in the principles that govern the world, 2015
   

Last update:    August 2015

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