Globalisation and climate change are exposing the world’s most vulnerable to more frequent and intense risks and shocks. Conflict, poverty and famine are inducing unprecedented mass migration. Inequality is increasingly globally. The poor and vulnerable are encountering increasing challenges, preventing them from escaping poverty. The question is: Can social assistance programmes expand quickly and wide enough to compensate for these challenges?
Demand for assistance is high
Social assistance programmes encompass cash transfers, in-kind transfers (like seeds and medicines), and near cash benefits (such as food vouchers), and are implemented in countries the world over (World Bank, 2019). Cash transfer programmes are a prominent approach: Cash is transferred to poor households so their incomes can be raised and smoothed.
As of 2011, cash transfer programmes reached between 0.75 - 1 billion people across the globe. Subsequently, cash transfers have ballooned, rapidly becoming not just a middle-income country (MIC) phenomena but a low-income country (LIC) phenomena too (DFID 2011, p. i).
Conditional cash transfers now constitute the largest social assistance programme of many countries, including Brazil and Mexico, extending support to millions of cash-strapped households (World Bank 2009, p. 1). Unlike unconditional programmes, these distribute funds on the condition that they are invested in the family’s human capital and productivity.
Social assistance: A successful programme approach
The global trend in the expansion of social assistance programmes is easily explained by the advantages they incur. One advantage, alluded to above, concerns their ability to raise and smooth incomes in times of shocks and crisis. A regular cash transfer allows households to maintain spending on education, food, and healthcare in particularly challenging periods without having to sell their assets or acquire risky debt (World Bank 2009, p. 48).
For example, following the 2008/9 Global Financial, food and fuel crisis, shock-responsive social protection was employed to buffer the effects of these macroeconomic shocks for thousands of the world’s poor (Roelen, Longhurst and Sabates-Wheeler 2018, p. 18). Crucially, over time, sustained spending on goods such as education and healthcare manifest themselves in greater levels of human capital, boosting the output (and therefore, incomes) of families and the country as a whole.
Social assistance programmes also tend to be more efficient than other forms of aid. Emergency aid, for example, is needed in a crisis but its temporary nature makes it ineffective for governments seeking to boost human capital (DFID 2011, p. i). Humanitarian actors acknowledge the benefits of long-term aid, illustrated by the fact that 89% of humanitarian aid is sent to places that have received humanitarian assistance for over three years (ODI 2015, p. 24).
Ultimately, whilst a well-fed population is more likely to survive, a well-educated population is more likely to thrive. On the back of these clear advantages, it is no wonder that throughout sub-Saharan Africa, governments are increasingly opting to fund cash transfer programmes themselves, relying less on donors than ever before (Davis et al. 2019, p. v).
Is expansion feasible?
Despite the clear benefits of cash based social assistance programmes, today experts are increasingly concerned about their long-term effectiveness. Globalisation is one cause for the concern. Whilst a more integrated global economy has afforded poor households’ great opportunities in terms of increased consumer choice, it has also exposed the world’s most vulnerable to once distant problems.
The 2008/9 Financial Crisis perfectly illustrates such a threat, which led to numerous shocks caused by volatile food and fuel prices. This shock lead to increased levels of “transitory poverty”, as many families were forced to drastically reduce their already stretched consumption habits (DFID 2011, p. i). Importantly, if the presence and persistence of shocks and crisis expand more rapidly than social assistance programmes, the world’s most vulnerable are at risk of falling into poverty, without a way out.
Inequality is also becoming more prevalent in our highly globalised world. Since the Financial Crisis, only a decade ago, we have seen the number of billionaires across the world almost double. Meanwhile, almost 50% of humanity subsist on less than $5.50 per day (Oxfam, 2019).
For every actor or institution that disproportionately accumulates the benefits of economic growth, either through legitimate means or corrupt practices, less is inevitably left to “trickle down” to the poor (DFID 2005, p. 5). In turn, this undermines human capital accumulation, which is essential to a healthy, happy, educated global community. No country or continent is immune to the effects of inequality. As the world’s poor only become poorer, social assistance programmes will most likely have to pick up the slack.
Recommendations going forward
In short, social assistance programmes are one solution among many to the challenges presented by growing poverty and inequality. While approaches like cash transfers are gaining in popularity and displacing other forms of assistance, their rise is not inevitable.
There are a number of steps governments can take to maintain the effectiveness of social assistance policies and programmes:
- Sustaining and increasing current levels of expenditure will ensure that these programmes are substantial enough to provide adequate, predictable and reliable transfers of essential goods like cash, food and healthcare to all individuals in need. Securing fiscal space is key to social protection.
- Actively predicting and protecting against global threats will allow for the proper budgeting, design and implementation of social assistance programmes: This includes most prominently environmental, climate change, migration, and employment related treats.
- Governments must also keep an open mind as to the most effective solutions for a given challenge. Otherwise, they risk taking the expansion of social assistance programmes for granted, or worse still, putting all their eggs in one basket and neglecting less fashionable (but more appropriate) policies. In this regard, knowledge exchange and the pursuit of innovative, small-scale pilot programmes is a worthwhile investment. Political will is necessary in this pursuit.
- Inequality should be firmly on the radar of governments: They should legislate with the aim of disbursing the benefits of economic growth more widely amongst their populations. Inclusive growth is sustainable and legitimate growth.
Looking ahead, it is through sustained gains in human capital that millions of the world’s poorest will escape poverty and lead more fulfilling lives. Only properly funded and well-devised social assistance programmes will ensure that these gains are achieved, and this is where governments across the globe must step up and lead the way.
Davis, B., Handa, S., Hypher, N., Winder Rossi, N., Winters, P. and Yablonski, J. (2019). From Evidence to Action: The Story of Cash Transfers and Impact Evaluation in Sub-Saharan Africa. [online] The Food and Agriculture Organization of the United Nations, The United Nations Children’s Fund and Oxford University Press, p.v. Available at: https://www.unicef.org/socialpolicy/files/From_Evidence_to_Action_Story_of_Cash_Transfers_and_Impact_Evaluation_in_SubSaharan_Africa.pdf
DFID (2005). Social transfers and chronic poverty: emerging evidence and the challenge ahead. [online] London: the Department for International Development, p.5. Available at: https://www.unicef.org/socialpolicy/files/social-transfers_and_chronic_poverty.pdf
DFID (2011). Cash Transfers. Evidence Paper Policy Division. [online] p.i. Available at:https://www.who.int/alliance-hpsr/alliancehpsr_dfidevidencepaper.pdf
ODI (2015). Doing cash differently: How cash transfers can transform humanitarian aid. Report of the High Level Panel on Humanitarian Cash Transfers. [online] London: Overseas Development Institute, p.24. Available at:https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9828.pdf
Oxfam (2019). 5 shocking facts about extreme global inequality and how to even it up | Oxfam International. [online] Oxfam.org. Available at: https://www.oxfam.org/en/even-it/5-shocking-facts-about-extreme-global-inequality-and-how-even-it-davos[Accessed 1 May 2019].
Roelen, K., Longhurst, D. and Sabates-Wheeler, R. (2018). The Role of Cash Transfers in Social Protection, Humanitarian Response and Shock-Responsive Social Protection. [online] Institute of Development Studies, p.18. Available at: https://opendocs.ids.ac.uk/opendocs/bitstream/handle/123456789/14081/Wp517_Online.pdf?sequence=1&isAllowed=y
World Bank (2009). Conditional Cash Transfers: Reducing Present and Future Poverty. [online] Washington, D.C.: The World Bank Group, pp.1-48. Available at: https://siteresources.worldbank.org/INTCCT/Resources/5757608-1234228266004/PRR-CCT_web_noembargo.pdf
World Bank (2019). ASPIRE: The Atlas of Social Protection - Indicators of Resilience and Equity | Social Assistance | The World Bank. [online] Datatopics.worldbank.org. Available at: http://datatopics.worldbank.org/aspire/indicator/social-assistance [Accessed 2 May 2019]