A strong social contract is a precious resource in any country. Without it, citizens will be reluctant to pay their taxes resulting in governments being unable to collect the revenues they need to offer good quality public services to their citizens. The fundamental building block of a strong social contract is citizens being able to trust their Governments. As Sweden’s Ministry of Finance argues, governments build trust through the provision of universal public services.
The model of social security that is prevalent across today’s Global South has a strong emphasis on programmes targeted at the poorest members of society. In this paper, written in partnership with Act Church of Sweden, we argue that this model reinforces a vicious circle of low government revenues and poor-quality social security which weakens citizens’ trust in their governments, thereby undermining the social contract. Through targeted programmes the majority of the population – the so-called ‘missing middle’ – are, by design, excluded from the national social security system while the ‘poor relief’ programmes that are delivered tend to be of poor quality: targeting errors are high while selection is widely perceived by citizens as arbitrary and unfair; transfer values are low, with their real value falling year on year; conditions and sanctions are often used, which undermine dignity and self-respect; recipients are often stigmatised; and, local elites often use programmes as a means of exercising power and control over recipients.
A core challenge facing countries across the Global South today is how to create the virtuous circle of increased government revenues and higher quality public services. This paper argues that the best and easiest means of building trust in government is through investing in universal social security. A high-quality universal social security scheme – such as a child, old age or disability benefit – could be established in a very short period of time and would be a very visible means of governments demonstrating to their citizens that their taxes are being used well and that the government cares for them, thereby generating trust.
Building trust and a strong social contract is particularly important in fragile states. In this paper, the argument is made that universal social security is also the answer to fragility: universal social security scheme would be a game-changer in building national social contracts and in signalling to everyone that they are part of the nation-state.
The COVID-19 crisis is an opportunity to re-think the paradigm of social security. The pandemic has highlighted the weaknesses of current social security systems across much of the Global South. They need to be strengthened, as do other public services such as health and education and this can only be done if government revenues are increased. If governments want to build a strong social contract and grow government revenues, establishing universal social security schemes would be a singularly effective tool.
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