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Social Protection Sector Strategy: From Safety Net to Springboard

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The World Bank's involvement in social protection-which traditionally consists of labor markets, pensions, social funds, and "safety nets"-began with work on labor markets in the 1970s and the incorporation of safety net components into structural adjustment programs in the 1980s. The debt and economic crises of the 1980s in various parts of the world set the stage for the World Development Report 1990 on poverty, which recognized the importance of safety nets. The concept of social protection gained importance with the collapse of communism, the continuation of economic crises, and the rising share of elderly populations in developing countries. The World Bank espoused a broader view of social protection in its World Development Report 1995, which focused on labor issues, as well as in its groundbreaking 1994 study of aging and pension reform, Averting the Old Age Crisis. Events of the 1990s brought social protection programs to the forefront of the World Bank's work. The fiscal impact of the "cradle-to-grave" social security schemes in the former communist countries was unsustainable, and the World Bank's approach entailed reducing expenditure and targeting transfers to cushion the negative effects of transition on the most vulnerable. The global financial crisis that hit East Asia and then Russia and Brazil in 1997-98 resulted in the implementation of large-scale social protection measures with World Bank assistance. The crises and the downturn in the East Asian "miracle" countries demonstrated that growth and sound macroeconomic policies, while necessary, are insufficient for sustained poverty reduction. Shock-resistant risk management programs, including safety nets, income support systems for the elderly, and well-functioning labor markets with social safeguards are essential to reduce poverty over the long term and to protect gains already made. The World Bank's portfolio in social protection reflects its growing involvement in the sector in response to world conditions. Lending in the social protection area has increased more than six-fold since 1994. The lending volume in FY99 was $3.76 billion, 13 percent of the World Bank total (all monetary figures are in US dollars). While the response to the global financial crisis has driven much of the recent increase, annual lending levels for investment operations and noncrisis reform are about 3/4 of a billion and 1 billion dollars, respectively.

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Availability

KP XXI.000222

KP XXI IND s

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Detail Information

Series Title

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Call Number

KP XXI IND s

Publisher

Washington : The World Bank., 2001

Collation

xvi, 77p. : ill. ; 29cm.

Language

English

ISBN/ISSN

0821349031

Classification

KP XXI

Content Type

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Media Type

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Carrier Type

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Edition

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Subject(s)

Social Security
Developing Countries

Specific Detail Info

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