In this blog, Gunnel Axelsson Nycander reflects on the ongoing debate between universal and poverty-targeted social security systems. She highlights recent efforts to promote universal benefits, particularly through discussions with global institutions and policymakers, and emphasises the viability of such systems even in low- and middle-income countries.
Maybe things are beginning to move.
The debate about universal or poverty targeted social security has been going on for a long time. Act Church of Sweden and myself have been part of it since 2015 when we published our first report on the benefits of universal systems, largely drawing on academic research on social policy and Swedish historical experiences.
Since then, together with Development Pathways, we have published a number of reports on the failure of poverty targeted programmes to reach the intended beneficiaries, on how ‘social registries’ multiply the effects of targeting errors, on the role of universal social security in nurturing trust and a strong social contract between citizens and government, and on the World Bank’s effort to reconcile its commitment to “universal social protection” with continued promotion of poverty targeting. Summarising the main messages from these reports, we have suggested how advocates should talk about universal social security in a way that may “win hearts and minds”.
We have had discussions with the Swedish development agency Sida and talked to politicians, officials in the Swedish Ministry of Foreign Affairs, and the Nordic-Baltic representatives on the executive boards of the IMF and the World Bank. Rarely have I been told that the facts and arguments we put forward are wrong. More often, the end of the discussion has been: “This is all interesting, but resources are limited, and it is simply too expensive to provide support to all people. We have to start with the most vulnerable.”
That is why Act Church of Sweden and Development Pathways have published two reports that 1) through economic projections show that it is indeed financially viable for low- and middle-income countries (LMIC) to introduce universal old age, child and disability benefits gradually over a 20 year period and, 2) document that 52 LMICs already today have implemented a total of 82 such schemes, financed without external support.
It could be a coincidence, but it also may be that suggesting concrete alternatives, rather than complaining about current practices, has contributed to opening doors. During the last few months, I have had the opportunity to present the latest reports in two different spaces, both held under the Chatham House rules, where representatives from the WB and IMF had agreed to comment on them: first, in February, in a “knowledge exchange on emerging topics” workshop organised by the USP2030 financing social protection working group; and, second, at the end of May, in a meeting hosted by the Nordic-Baltic Executive Director office at the World Bank, with participants joining from ministries in several of the countries in the constituency. There were questions, of course, and some questioning of the economic modelling in one of the reports. But no one has said that we are crazy and totally wrong. Having World Bank staff read and respond to our messages is certainly a step forward.
At the end of April, I was invited to present the same reports – as well as our message on poverty targeting – at an internal learning event organised by the Directorate-General for International Partnerships (DG-INTPA), the part of the European Commission responsible for international partnerships. Participants were mostly staff from EU delegations in different parts of the world, implementing the EU’s development cooperation programmes. The presentation was well received, and, in the discussion, I heard interesting testimonies from national contexts from Morocco to Paraguay. The discussion focused on how to promote an EU position towards universal social protection system strengthening, based on the EU experience. At the country level today, and where actual social transfers are supported (as distinct from systems and capacity building), the EU is often co-financing poverty-targeted programmes but also categorical schemes or emergency transfers. I hope there is a possibility that the EU will take a more independent path in the future, honouring the tradition and values of European universal models of social security. The policy framework from 2012, the Public Finance Management-Social Protection Programme – implemented jointly by the ILO, Unicef, and CSOs – are good examples. Looking forward, the Team Europe Initiatives (TEIs) on Social Protection in Sub-Saharan Africa and Inclusive Societies in Latin America and the Caribbean are promising examples with a clear direction for promoting universal social security. In addition, during the last few months, a structured and promising dialogue between civil society and the unit at DG INTPA has been initiated.
The day after, I had the privilege of speaking at a seminar held in the Danish Parliament: What role for Danish development aid in ensuring access to social security in low- and middle-income countries? The event was organized by the JUST SOCIETY programme at the University of Southern Denmark (SDU), together with the Danish organisation Research & Action for Income Security (RAISE) and hosted by the Danish Social-Liberal Party (Radikale Venstre). The host, the former minister of development cooperation Christian Friis Bach, said that he regrets that, when he was a minister, he didn’t realise the importance of social security in development and poverty reduction, and that it will be a key priority if his party wins back power after the next elections. Like most of the participants in the event, he thinks that, if Denmark engages more in supporting social security, it should promote a rights-based approach and build the systems of universal schemes. The title of the report he prepared for the party is “A world with welfare” (En verden med velfærd).
So, it was with quite some optimism that I got ready for the summer holidays. Especially because, on June 17th, at the World Bank IDA forum that preceded a formal negotiation session on the IDA21 replenishment, two Nepalese CSO colleagues delivered a joint statement and letter with recommendations on social security education and health in IDA21, signed by 25 organisations worldwide. Reorientating away from poverty targeting to universal social security was the main message, and the number of signatures to the letter increased during the following days to more than 40.
I must admit I was disappointed when I read the section on social protection in the Policy Package for IDA21, published on 18 June, which stated in Paragraph 52: “IDA21 will build countries’ capacity to accurately identify the poorest and most vulnerable and prioritize them for support.”
The sentence is blunt and provoking. It is written as if it was possible – even in theory – to “accurately identify” the poorest and most vulnerable: as if the well-documented risks and costs of poverty targeting were not relevant; as if the documented existence of 88 universal social benefits in 52 LMICs doesn’t mean that supporting such systems is a realistic alternative; and as if we do not already know that the only way to effectively reach the poorest members of society – and leave no one behind – is through universal benefits. A detailed joint comment on the draft Policy Package, prepared by the Global Coalition for Social Protection Floors (GCSPF) and the Social Security Campaign, was prepared for the European IDA Forum on 24 July.
Negotiations on IDA21 will continue, with the last session to be held in South Korea on 10-11 December. Until then, there will be plenty of opportunities to dialogue with decision-makers.
Gunnel Axelsson Nycander is a policy adviser on development finance and social protection at Act Church of Sweden, which is working on international development, humanitarian response, and advocacy. Gunnel was trained in economic history and environmental economics. Before joining the Church of Sweden in 2002, she worked at the Swedish Ministry of Environment and as an independent consultant. She has worked on various policy issues including food security, trade and agriculture, climate change, business and human rights. Social protection has been her focus since 2010.