Latin America Must Continue to Make Progress Towards Universal Social Protection

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During much of Latin America’s history, large sectors of the population have been completely left out of any form of social protection by the State, be they urban informal workers, rural populations, afro-descendants or indigenous communities. However, in a recent ECLAC book titled “Towards universal social protection: Latin American pathways and policy tools”, edited together with Fernando Filgueira, Rodrigo Martínez and Cecilia Rossel, we show that, since the beginning of the 21st century, the region has been undergoing a vigorous transformation in its social protection policies, with a growing proportion of the population accessing plans which, themselves, are of higher quality and paying higher value transfers. It is imperative that these achievements are maintained while further progress must continue, even in the face of a complex economic and political scenario.

Progress has been reflected in rising social investment, increased coverage of cash transfers for both older adults and families with children, as well as the expansion of social security and health coverage. Between 2002 and 2013, the percentage of wage earners enrolled in a pension plan rose from 46.3% to 55.7%, while those affiliated to a health plan increased from 54.4% to 67.6%.  Similarly, the proportion of persons aged 65 and over receiving pensions went from 37% in 2002 to 41.9% in 2011.  Coverage of cash transfer programmes for families living in poverty increased from 5.7% of the total population of the region in 2000 to 21.5% in 2013. These trends have been supplemented by the adoption of new regulations and standards for employment and the labour market and a growing use of active employment policies.

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In the Andes in Peru. Photo credit: Simone Cecchini

This expansion contrasts with the dynamic of retrenchment that characterized the 1980s and early 1990s when, as a result of the debt crisis and the ensuing structural adjustment policies, social investment was reduced and targeted at those living in extreme poverty to temporarily mitigate the negative effects of the crisis. It also leaves behind the model of social protection –typical of much of the 20th century era of industry and social modernization– based only on contributory insurance tied to formal employment and oriented towards protecting male heads of households, and indirectly their families. Currently, the focus is on non-contributory components (the “solidarity pillar”) and on the expansion of the coverage and range of risks covered by states, which are now incorporating ideas of care and support for families with young children into its traditional services of education and health care.

Comparative2These general trends apply differently to countries that are further from the universalist goal, on the one hand, and those where more substantial progress has been made, on the other. As shown in the paper “Social protection systems in Latin America and the Caribbean: A comparative view”, written with Fernando Filgueira and Claudia Robles, there are significant national variations in the pathway towards universal social protection, reflecting the existence of different welfare regimes in the region. Most Central American countries, together with Bolivia and Paraguay, face severe welfare gaps as measured by a series of social indicators of socio-economic development and demographic structure (“capacity”), tax revenue and social investment (“effort”), social protection coverage and family survival strategies such as child labour and migration. Colombia, Ecuador, Mexico, Peru and the Dominican Republic face moderate gaps. Southern Cone countries, together with Costa Rica and Panama face smaller gaps compared to the regional average.

Nevertheless, common cross-cutting matters can be identified as key to building universal social protection in all countries. These include the adoption of a rights-based approach to the design and implementation of social protection, the role of compacts in the achievement of universal social protection, the coordination of sectors and institutions for building comprehensive social protection, and a greater state role in the financing and investment for social protection. Lastly, an increasingly important issue for the proper and transparent management of social protection is the monitoring and evaluation of public policies and programmes.

Even though progress has been made, we must recognise that, in Latin America, many people are still left out from any form of social protection: coverage is wider and less segmented than in the past, although it is not universal or egalitarian. Furthermore, much of the expansion of social protection was sustained by the return to democracy, the existence of progressive Governments and broad-based economic growth. The current scenario of economic downturn and political crisis in countries like Brazil and Venezuela suggests that a period in which it will be more difficult to sustain progress towards the universalisation of social protection may be beginning.  Some governments could be tempted to cut social investment and to target it very narrowly, as done during the period of structural adjustment. However, history teaches us that following this pathway would entail dramatic consequences for the population of the region. After the 1982 debt crisis and the remarkable increase in poverty (which reached 48.4% of the population in 1990), it took a quarter of a century just to return to pre-crisis poverty levels (39.7% in 2005). Going backwards could lead to greater poverty and threaten democracy: so, the only way is forward, with governments committing to greater redistribution to both tackle inequality and strengthen economic growth.

SimoneCecchiniSimone Cecchini is an economist with the Social Development Division of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), based in Santiago, Chile. Over the last two decades he has worked on poverty reduction and social protection policies and programmes, advising countries of the region. He has published extensively on these issues, and his research is characterised by a multi-disciplinary approach and a focus on equity and human rights.

2 Responses to “Latin America Must Continue to Make Progress Towards Universal Social Protection”

  1. Matthew Greenslade Reply

    Great post, thanks! I guess it’s beyond the scope of your research but it is also worth looking at how wider government policy affects the poor, especially taxation, and can cancel out positive effects of social protection – see Nora Lustig’s work on Latin America at http://pfr.sagepub.com/content/early/2013/11/20/1091142113506931 – which you are probably very familiar with. I know it is harder to do but should we get in the habit of looking at government policy in the round more?

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