Social Protection: An Effective and Sustainable Investment in Developing Countries

KfW Development Research - Studies and Proceedings

KfW has published a paper, authored by Development Pathways’  Stephen Kidd, titled ‘Social Protection: an effective and sustainable investment in developing countries’. In recent years, social protection has increasingly played a key role in the social and economic policy of developing countries. The paper details some of the impacts of tax-financed social protection schemes in developing countries and the significant positive benefits that they bring.

 These range from building human capital to restoring a sense of dignity and self worth to the most vulnerable and excluded members of society. However, social protection should not be seen as a ‘silver bullet’, since schemes must be well designed if returns on investment are to be maximised. Further, social protection should be regarded as one essential component of broader national investment in social policy.

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One Response to “Social Protection: An Effective and Sustainable Investment in Developing Countries”

  1. Reagan Kaluluma Reply

    Dear Stephen,
    This is another well balanced piece of paper which is highlighting what social protection can do and necessary measures which need to be taken to ensure there are more positive impacts. I have liked the caution on targeting versus universal access and how cash transfers maintain dignity of some citizens who have past their prime period like the aged.

    When I was reading I had Malawi Social Cash Transfer in mind. At first it was all donor funded but after impact evaluation there is some commitment by Malawi Government which is putting some financial resources though small proportion. This is good for sustainability of such interventions. Impact of social protection is now becoming more evident in health, education and economic multiplier effect. The challenge which most programs are facing include sustainability. Developing countries are worried even before they start as to how they can sustain such programs beyond pilot phase. Personally I look at sustainability from three angles: Institutional, Political and Financial. Social protection programs will become sustainable if they use system which are acknowledged by the government. Using government officers and offices will help build institutional memory which is essential when government discusses development interventions. It is an advocate within the system and not handle over the results to government to carry on, governments should be part and parcel of the entire process. Political support is important. Politicians make policies of the government as such every program should be implemented in close consultation with policy makers especially Members of Parliament. Regardless of political party affiliation there should be adequate time to explain how the program will be implemented and financing mechanism. This helps shape the debate in discussing national budget. Financial sustainability is the crucial but not the only thing important. If governments are convinced the program is important for national development, they will do everything possible to mobilize resources to continue with implementation. In a small way this helped garner support for Malawi Social Cash Transfer which to a small extent has government support financially. If this is maintained, the government will have time to gradually increase the social protection envelope.

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