World Bank Involvement in
Social Welfare System Reform
and Lessons Learned
Aleksandra Posarac
World Bank
Economic growth and investment in
human capital
Prosperous, stable societies need healthy,
educated, skilled, active citizens
Human capital has long been identified as
one of the key determinants not only of
individual welfare but also overall socioeconomic growth and development
Each single individual counts:
demographic pressure
Why investing in children?
Children are human capital
Child development and welfare
outcomes reflect investment in
children.
Investment determines future
productivity (individual and of society
as a whole)
Investment in children:
generates higher economic returns
reduces social costs (positive
externalities)
contributes to greater social equity
and social cohesion
increases efficacy of individual social
sector programs
contributes to greater labor force
participation of mothers
Human development sectors
Education
Health
Social protection
Each one is present throughout the
life cycle
They deliver best results when linked
into a range of services (integrated
approach)
Social protection
Economic growth is necessary but not sufficient
to ensure that all members of society participate
in it and benefit from it
Social protection is defined as a collection of
public measures to improve and/or protect
human capital
Well-designed and implemented social protection
systems and policies contribute to more inclusive
growth and strengthen cohesion (equity aspects),
enhance efficiency and hence are growthpromoting by themselves
Social risk management approach
to social protection (1)
SRM is a framework used to analyze:
the sources of poverty and vulnerability,
the ways how societies manages risks, and
the relative costs and benefits of various
public interventions on household welfare.
Poverty reflects an unacceptable level of wellbeing, vulnerability captures the exposure to
uninsured risk leading to a socially unacceptable
level of well-being currently and in the future
(vulnerability to poverty but also vulnerability to
other risks: death, divorce, crime, substance
abuse, violence, etc.)
Social risk management approach
to social protection (2)
Individuals and households face risks
(insurable and non-insurable);
materialized risks become shocks and
have negative impact on well-being
(material, physical, emotional,
psychological…)
SRM looks at how poor and vulnerable
individuals and households can be helped
to better manage risks and become less
susceptible to damaging welfare losses
Risk reduction, mitigation and
coping (1)
SRM comprises actions that occur
before and after a shock—usually,
but not necessarily an economic
one—has occurred
Some reduce the impact that a
future event might have on a
household or an individual (ex ante
risk mitigation) – social insurance
arrangements
Risk reduction, mitigation and
coping (2)
Other help households or individuals cope
with a shock once it has occurred (ex
post risk coping) – mostly social safety
net interventions;
Finally some reduce the likelihood of a
shock occurring (reduction/prevention
of risk): include responsible
macroeconomic policies, labor market
policies which enhance skills development
and job creation, etc.
Some programs address several risks
Risk coping – social safety nets
The objective of the SSN is to improve welfare of
chronically and transient poor and vulnerable
households, including individuals and families
facing difficult life circumstances
Mostly risk coping, they also contribute to risk
mitigation and to some extent risk reduction
They enable households to employ or benefit
from other social risk management strategies,
increasing their chances to become more resilient
to risks and shocks and to exit poverty and
overcome other life difficulties permanently.
Social safety net programs
Income support: to increase consumption
(cash, in-kind, targeted, sometimes
conditional, etc.)
Economic empowerment programs (skills
development, education catch-up, incomegeneration programs, business start-up,
grants, micro-finance)
Social care services to vulnerable
individuals/families (including child welfare
services)
Social care services
Integral part of the safety net system
Address vulnerabilities and social problems that affect poor and
non-poor population alike
The groups in need of social care services are many (children,
families and women at risk, people with disabilities; elderly, etc.)
Difficult situations faced by these groups negatively affect human
development, labor market participation and productivity, they
lead to deprivation and exclusion, and may induce significant
negative externalities and social cost, if not attended to
adequately and in a timely fashion
The types of services are many and range from social work and
psycho-social counseling, care and rehabilitation for disabled
people, at home services for frail elderly, shelters, legal advice,
etc. to family substitute services for children without parental
care.
World Bank focus so far
Analytical work and lending (projects)
Health
Education
Social protection: social insurance (pensions),
social assistance, labor market policies
Relatively limited involvement in social care
systems and policies development, reform
modernization…. (in some countries more than
the others)
SIFs (initially infrastructure rehabilitation,
increasingly involved in social welfare services
(piloting)
Involvement in social welfare/care
systems reform
Both analytical and investment
support
Entire ECA Region; South-East
Europe: Albania, Serbia, Romania,
Macedonia, Bulgaria, Turkey, Croatia
A combination of institutional
development (legal framework),
capacity building, piloting of new
initiatives
Explaining the WB focus
Biggest impact on human development
(i) the size of affected population
(ii) the size of the problem
(iii) amount of resources involved
(fiscal attention)
Increasing poverty was calling for
programs with immediate impact (cash
transfers, Bulgaria one of first to introduce
CCTs)
Client interest (demand)
Why relatively limited involvement
in social care/welfare services?
Although an important individual and social
welfare and inclusion concern:
Client demand? There should be a consensus that
a particular intervention is a priority (advocacy is
not our particular strength)
Knowledge gap; challenging design; requires
permanently new solutions;
Complex for implementation with many
players/interests involved
Long-term involvement (projects are typically 4-5
years, implies a series of interventions)
Limited resources (links to public choice and
inevitable trade-offs)
What have we learned (1)?
We need to build a constituency within our own
institution
Importance of a champion (or a team of
champions) and sustained strong commitment of
key cabinet members (finance, in particular)
Knowledge, sufficient resources and sufficient
time: patience and persistence
Partnership (at the national, but also
international levels: speaking the same language,
sharing the same vision)
Political economy (no interest shall remain
unaddressed)
Lessons learned (2)
There is a role for everyone to play (the state,
service providers, NGOs, CBOs, beneficiaries,
etc.) – the importance of a balanced approach
Changing laws and rules is necessary, but not
sufficient for a change: persistence in
implementation and sufficient resources
Education of social workers, case management,
standards, plan for de-institutionalization and
transformation of institutions
Prevention: a range and a continuum of services
Bringing in the “missing element”
Analytical work to underpin interventions: making a case by
assessing costs and benefits (direct and indirect) of child welfare
interventions
Pool of knowledge with examples of good practice;
Working with clients, raising the child welfare questions persistently and
advocate for changes and improvements (we need partners)
Bring out clearly the human capital aspect of social welfare services
Work with partners (involve them in analytical work and projects
development and implementation; a challenge of brick, mortar and
computers vs. TA
Never give up.
Thank you!