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Urgent: World Bank safety net needed


The World Bank HQ

Beginning in the early 1980s, the World Bank (with the International Monetary Fund) foisted structural adjustment programmes on a variety of poor countries around the developing world. These programmes, based on the forced application of new ideologies of liberalisation and privatisation, led to massive unemployment, human misery and deprivation. Jobs were lost in government service (which had to be shrunk drastically), in state marketing boards (as trade was thrown open to the private sector) and in public services (where utilisation fell as a result of the introduction of prohibitive access fees), writes Nicholas Freeland.

In partial (and inadequate) response to this, the World Bank adopted the idea of “safety nets” to help the main losers and minimise social unrest. In 1987, to cushion the adverse effects of structural adjustment programmes on the poor, the Bank helped Bolivia to establish a first Emergency Social Fund (ESF) aimed at providing emergency relief through creating temporary employment and improving income. The Bank’s commitment to “safety nets for the poor” was set out in the World Development Report 1990: Poverty. And, after Bolivia’s ESF, the wave of social funds and public works spread to more than 60 countries, throughout Latin America, Africa, Asia and – from the 1990s – eastern Europe. By 2014, a World Bank review counted 94 countries with public works programmes, often cleverly rebranded as “productive safety nets” rather than workfare.

Starting in 2001 and learning from existing programmes in Brazil and Mexico, the Bank began to support Conditional Cash Transfer (CCT) programmes…in Colombia, Jamaica, Turkey, the Philippines, Indonesia, Kenya and elsewhere; the same recent review counted 64 countries with CCTs in 2014. The Bank still confusingly termed these programmes “safety nets”: which was odd, because one of the key arguments it used to get around its own restrictive bylaws on providing loans for direct cash transfers was that CCTs had human development as their main objective. For the Bank, therefore, safety nets gradually became synonymous with social assistance and social transfers, but with distinctively neo-liberal characteristics: small-scale, poverty-targeted (usually using proxy means testing), involving a labour requirement or compliance with human capital conditions, and often with an objective of “graduation”. And so they have remained, rolled out as a kind of blueprint in tens of countries around the world, with technical support from a veritable army of World Bank technical experts with specific skill-sets.

Until now! On 30 June 2015 – seemingly out of the blue – the President of the World Bank, Jim Yong Kim, threw his organisation’s full weight behind universal social protection. In a joint statement with the ILO, he recognised the opportunity “to make universal social protection a reality, for everyone, everywhere”; and he even explicitly recognised that countries might prefer not to adopt the Bank’s established safety net blueprint: “There are many paths towards universal social protection. It belongs to each country to choose its own, and to opt for the means and methods that best suit its circumstances”.

The concept note supporting this bold statement contains no allusion whatsoever to poverty-targeting or proxy means testing; it doesn’t include the word “conditions” (still less the non-word “conditionalities”); it makes only one brief passing reference to public works programmes; the concept of “graduation” is totally absent; and the term “safety net” doesn’t even get a mention. Rather, the concept note recognises that social protection “is a human right that everyone, as a member of society, should enjoy, including children, mothers, persons with disabilities, workers, older persons, migrants, indigenous peoples and minorities”. The Bank’s stated objective is now “to increase the number of countries that can provide universal social protection, supporting countries to design and implement universal and sustainable social protection systems”.

This is of course excellent news for the wider cause of global social protection. But there must be concerns that – like structural adjustment three decades back – the imposition of this new ideology may entail serious human costs. In particular, it risks creating swathes of unemployment among the massed ranks of the World Bank’s safety net experts. What is to become of all those worthy Bankers whose skills, acquired and nurtured over the intervening years, have suddenly become redundant? This would include, for example: the multiple trainers on its annual social safety nets training course; the proponents of public works programmes with their endless discussions over setting the optimal wage rate and calculating the net present value of assets generated; the arcane wizards of proxy means testing, debating the sensitivities of equivalence scales and the merits of ordinary least squares over quintile regression (while still delivering a highly inaccurate targeting methodology); the fanatics of graduation, endlessly reworking their formulas and indicators to exit people from safety nets as fast as possible; and the advocates of conditionality, devising ever more complex experiments to try to demonstrate that attaching conditions to social transfers actually makes any difference (despite the accumulating evidence that it does not). All these, incompatible as they are with rights-based universal social protection, are now apparently relics of the past, consigned – like the poor laws and workhouses before them – to the dustbin of social policy history.

So how can we help these unfortunate souls now they are no longer useful to the World Bank? With their redundant qualifications and outmoded skills, we must nonetheless hope against hope that they will be able access an adequate safety net. In particular, we must trust:

1) That having spent so many years devising and imposing non-human rights based safety nets, they themselves are not now denied their basic human right to social security.

2) That the poverty-targeting approaches they have designed are sufficiently responsive to detect their plight rapidly (though unfortunately the next retargeting exercise is not scheduled for another three years and may well be delayed further).

3) That the proxy means testing formulas they have devised are sensitive enough to identify them as being particularly worthy of support, ideally without too heavy a weighting against asset-ownership, previous income or educational level of household head.

4) That their once leafy, yet now deprived, townships around DC will be geographically targeted for inclusion in a putative Safety Net for Indigent Professionals (SNIP) emergency response programme.

5) That they are physically robust enough to toil for hours each day in the torrid heat of the Washington sun, in order to receive a derisory wage set tantalisingly below the statutory minimum.

6) That they are located close enough to basic health facilities and public educational establishments that they and their children will be able to comply with any necessary “human capital co-responsibilities”.

7) That the graduation criteria for programme support are not set so low that they will have to exit the safety net before they have had time to equip themselves with the new skills needed to re-engage with the labour market.

This promises to be a true test of safety nets!

[Postcript Oddly enough, The State of Social Safety Nets 2015 was published just a week after the President’s statement advocating universal social protection. Let us hope (a) that this was an unfortunate coincidence and not an early indication of dissent and recalcitrance among displaced World Bank staffers, and (b) that the hoped-for safety net is indeed up to the task of defusing any resultant internal unrest. We look forward already to the next edition of this flagship report, entitled, no doubt, The State of Universal Social Protection 2016!]


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