Financial Inclusion and the Future of Social Protection Policy

The economic impacts of the COVID-19 pandemic have resulted in major setbacks in addressing global poverty levels. The UN predicts significant delays in reaching a number of the Sustainable Development Goals and the World Bank reports a two-decade reduction in eliminating extreme poverty. In this context, almost every country in the world has expanded, adapted, or developed new social protection measures. Some 1.3 billion people were assisted through this expansion of social protection over the course of the pandemic, from stimulus cheques to caregiver benefits to supports for informal workers (Gentilini et al., 2020). By far the most popular form of support were direct cash transfers (CT), with many governments expanding coverage or eliminating conditionalities entirely.

Like many observers, I was initially hopeful that these expansions would provide opportunities to address the significant gaps in our social protection systems, particularly as the most vulnerable (women, informal workers and migrants) are often excluded. Unfortunately, this does not seem to be the case. Pandemic specific transfer programs lasted, on average, only 3.3 months, with only 7% extended beyond this (Gentilini 2021). Prior to the pandemic, some 4 billion people lacked social protection coverage. The limited duration of these measures, coupled with the long-run effects of disrupted employment, means we are effectively back to where we started—even as the pandemic shows no signs of abating in much of the world.

What has emerged instead are significantly different approaches to adapting the welfare state in a context of continuous and ongoing livelihood crises.     

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Problems with a bottom-up approach to governance reform: Evidence from India

There is a neoliberal consensus pioneered by Hayek and Tiebout in the 1940s and 1950s in the idea that a market economy-like organisation of sub-national units in a federation will result in overall gains in institutional performance. Literature has focused on the efficiency gains to be derived from making sub-national units competitive guided by the principle that devolved government is better able to respond to voters’ choices. This rests on the assumption that local and national needs vary significantly. In this article, I ask whether the prioritisation of service delivery in healthcare and education sectors is indeed something that varies across states in India. The Indian federal system has been increasingly under pressure to devolve power to the states since the economy was set on a path to liberalisation. Initially, this pressure came from the outside, through international institutions (Bretton Woods, largely) but this opportunity was instantaneously accepted by sub-national politicians who promoted, rightly, the cause of their constituencies. This has taken shape in the form of reduced centralised monitoring of service delivery, and the funds previously allocated to this end are now being directly transferred to states who have unconditional leeway to allocate it to various uses. This occurred too suddenly without a mechanism in place to safeguard and ensure the equitable delivery of essential services in healthcare and education, and an ever widening gap among states.

fig1Source: Data from CMIE States of India, RBI

Building on to this, we also have inter-regional issues due to clustering economies. Some states benefit whilst others (often, the poorer ones) lose out by disgraceful margins. There is a race to the bottom on regulatory easing for corporations, and inter-state bargaining for central resources is competitive, rather than cooperative. Transplantation of a European approach to governance and institutions in the Indian context has meant that natural resources are being plundered by sub-national governments to promote corporate interests, as their citizens remain deprived. Public hospitals and primary healthcare infrastructure are slowly decaying into obscurity as shiny, private health players enter the market. This is the same case within the education sector, cheap, private schools largely targeting the middle class are driving away resources and interest away from the public school system, which in its crippled state cannot justify a case to be the recipient of sub-national governments’ interest. Read More »

Ephemeral universalism in the social protection response to the COVID-19 lockdown in the Philippines

By Emma Lynn Dadap-Cantal, Andrew M. Fischer and Charmaine G. Ramos

Since March 2020, the Philippines has implemented one of the world’s strictest and longest lockdowns in response to the COVID-19 pandemic, which has caused severe disruptions in peoples’ livelihoods. The government’s emergency social protection response, the ‘Social Amelioration Program’ (SAP), has also been notably massive, introducing one-off near-universal income protection. It is an insightful case given that the country’s existing social assistance system has been celebrated as a model for developing countries, even though it has been mostly bypassed in the emergency response. Moreover, the country’s highly stratified and fragmented social policy system has resulted in implementation delays and irregularities that have fostered social hostilities and undermined the potential for such momentary universalism to have lasting transformative effects.

The Philippine government first imposed its ‘community quarantine’ on 15 March, which has since been extended until 30 June. Thus far, the pandemic has not been severe relative to evolving global indicators, with 302 confirmed infections per million people and 11 confirmed deaths per million people as of 25 June (although at only 5,760 tests per million people, these confirmed rates are likely to be significantly underestimated). However, as elsewhere in the Global South, the lockdown has thrown the country into an employment crisis given that more than 60 percent of its workforce is informal, most in precarious situations even when earning above the official poverty line.

In response, the government rolled out the ‘Social Amelioration Program’ (SAP), comprising at least 13 different schemes and with an estimated total budget equivalent to as much as 3.1 percent of the country’s GDP [1]. The largest scheme is the Emergency Subsidy Program (ESP), which has been allocated 200 billion Philippines pesos (PhP; about 3.5 billion euros), more than three times the combined budget of all the other schemes.Read More »

Addressing the Pandemic in the Philippines Necessitates a New Economic Paradigm

Rodrigo_Duterte_delivers_his_message_to_the_Filipino_community_in_Vietnam_during_a_meeting_on_September_28In his late-night Talk to the Nation on COVID-19 on 6 April, Rodrigo Duterte, the populist President of the Philippines, echoed the affirmation of leaders from rich countries in North America, Europe, and Asia: to do “whatever it takes” for the economy to survive the pandemic. The problem, however, is that, on his own admission, Duterte is incompetent in economics. His stubbornly militaristic mindset and police-centric approach to governance is even more problematic when dealing with complex developmental causes and impacts of the coronavirus outbreak.

Yet the Philippine state’s inadequate institutional capacity to respond to the epidemic goes deeper. Given the national economy’s position in the hierarchical global economic system, its structural weaknesses impacts on how effective the government’s response can be. The current mainstream approaches to resolve the pandemic and the multiple crises of capitalism would fail to address the convoluted historical process of maldevelopment of the Philippines. Thus, a radical political strategy with a new economic paradigm for post-pandemic reconstruction is needed.    Read More »

Pandemics and the State of Welfare

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In the midst of what might possibly be the worst recession since 2008, and staring down the barrel of overwhelming economic, social and human disaster, there is widespread recognition that increased welfare spending is critical not just to contain the fallout from the pandemic, but also to effectively combat it. By ensuring timely delivery of essentials and basic income support, one can minimise the chances of people venturing outside, and hence contain the spread of the COVID-19 virus.

There are valid concerns raised as to whether these measures go far enough in helping workers or whether institutional mechanisms will be able to convert announcements into genuine progress on the ground. This blog post analyses the arguments behind the justification of introducing welfare schemes in today’s times, and the underlying economic logic behind them. 

The increase in welfare provision is sorely needed in a catastrophic situation such as the one we face. But while the readiness to deploy instruments to achieve this is unprecedented, the measures themselves are not. Much of the welfare measures rolled out by governments are standard income support and welfare packages, larger in scale but with no fundamental changes in their basic design. Much of these measures, moreover, have been advocated by many to deal with fallouts from economic crises in the past, only to be met with middling levels of success and acceptance by the powers that be. The impact of the coronavirus has shown us how quickly governments can turn over the fundamental principles of austerity if they are pushed to do so. 

This post does not simply aim to criticise government policies of the past in light of current actions, but to outline a warning for the future. The problem of economic distress will not go away once the pandemic does, because then we will be dealing with battered economies, high unemployment, and weak to non-existent growth. In such times, when the threat of the virus has ebbed, there will be calls to roll back the welfare measures of the government. These calls will have to be countered stringently, on the grounds that the need to protect welfare and ensure government assistance is not contingent simply on the existence of a virus, but on the inability of the economic machine to provide for welfare.Read More »

The Moral Economy of Housing

Belknap-Spring-2018-Moral-Economy (1)

We must be insistently aware of how space can be made to hide consequences from us, how relations of power and discipline are inscribed into the apparently innocent spatiality of social life…(Soja, 1989, p. 6)

We are first and always historical-social-spatial beings actively participating individually and collectively in the construction/production—the ‘becoming’—of histories, geographies, and societies. (Soja, 1996, p. 73)

The fortification of housing insecurity, if left unchallenged, will constitute a normalized social basis, in which an ever-growing number of impoverished households are routinely ostracized. Analyzing the dynamics of this social condition demands robust explorations of the concrete reality in which housing, in general, is developed, reproduced and institutionalized over time and space.

At its most fundamental level, housing is more than a market segment or policy, it is a social relation that serves as the kernel of human survival, which can have profound consequences for the actors involved, the actions they take, and the outcomes that follow. As such, housing provides a set of meanings and values, a material form of emotional, cultural, political and economic significance. It is an institution that points to polyvalent higher order social arrangements that involve both patterns of social mobility and symbolic systems that infuse human activity with a powerful essence. Housing insecurity, therefore, is not a just a means of financial dispossession, but an ontological crisis concerning personal identity and the relationship to the rest of society.

Thus, the inherent task is to conceive of a situational dynamic that structures a housing system that enables residents to profoundly overcome socioeconomic inequity. The mission is to construct a moral economy, so to speak, that is generated along the lines of a systematic effort to maintain a high quality of life, whereby value, norms and obligations are metabolized through particular fields constituted by dynamic combinations of meanings and practices that embody a generalized sphere of community, a realm of possibility to enhance the development of one’s potential.

Overall, the intention is to allow for a normative discussion about what possibilities exist for assessing housing as a spatial activity that altogether adheres to socially determined aesthetic and moral expectations, that is, to approach housing as a language of dignity, as opposed to a vocation of spatio-temporal fixes. Hence, the responsibility of providing the means of socially equitable forms of shelter is not an insurmountable challenge; it can be administered in the name of social stability.

What is requisite is a recognition of moving beyond close instrumentalism and incrementalism with respect to short-term benefits of goal-specific tasks. This presupposes a negation of distancing from outward signs of housing insecurity, which inherently is a society-wide phenomenon, since institutional benign neglect only contributes to the slippery slope vulnerable people continually risk, toward the untouchable-caste status of homo sacer.

References:
Soja, Edward W. (1989), Postmodern Geographers. New York: Verso
Soja, Edward W. (1996), Thirdspace. Oxford: Blackwell.

David Fields is a political economist from Utah. His work primarily centers on international political economy, with particular concerns on the role of finance in economic development. He also delves into the political economy of community planning, in order to promote socially equitable housing cross-nationally. This post was first published on the URPE blog. E-mail him at: dfields@utah.gov.