Social protection: underspent and underreported

Last week I [1] attended an event on social protection at ODI, which was a discussion of the findings of the ILOs World Social Protection Report 2014. The report is really a very good read on all matters to do with social protection. It really highlights the importance of more investment in social protection in order to overcome inequality, tackle extreme poverty and foster more inclusive growth. It gives a great overview of what each country has been doing on social protection over recent years which builds into an excellent global picture and overview of social protection systems and policy. It reviews social protection for children, women and men in working age, older persons, and reports on progress towards achieving universal health coverage. It also analyses recent trends, such as the impact of austerity programme in the aftermath of the financial crisis.

What was really excellent – from our perspective here at Government Spending Watch (GSW) – is that report uses some of our GSW data to show how much some countries are spending on social protection. In fact, the report uses a host of different data sources, which is almost certainly a reflection of the fact that good data on social protection spending by governments is so very hard to come by.

One thing myself and colleagues here at GSW consistently find is just how hard it is to gather good data on public financing for social protection.  Often it is hard to tell what exactly a government is spending on social protection because there is no separate function on social protection or it is buried across multiple budget lines and within multiple ministries. It is almost universally the hardest area for us to define and track in budgets (well, maybe gender spending is harder but it certainly is tough!).

Even when we can actually identify social protection spending it is it is almost certainly lower than the estimated amount necessary.  Our analysis last year of GSW data on social protection showed that no country in the GSW database is meeting two targets which have been set as benchmarks for spending on social protection. In Windhoek in 2008, African governments adopted a declaration which recommended that spending on social protection should be around 4.5 per cent of GDP. In addition, the International Labour Organization (ILO) and others have estimated the level of government spending needed to provide basic social protection at between 2.9 and 5.2 per cent of GDP. No country is meeting either of these, and most spend well below 1% of GDP

This is in spite of increasing evidence of the absolute centrality of social protection spending in tackling inequality and promoting inclusive growth.  One of the interesting findings of the ILO 2014 World Social protection report is that while social protection schemes have been contracting in developed countries as a result of the financial crisis, the authors find that middle-income countries have been “boldly expanding” their social protection systems, while in many lower-income countries, the authors note that social dialogue is taking place on building social protection floors, and that even in the poorest countries options are available for extending social protection systems.

This is something which we are beginning to build a related picture of here at GSW – it certainly seems as we go through and update our database – of mainly low income countries but with some more middle income countries coming on stream in 2015 – with the latest budget years that more countries have explicit budgets allocated towards social protection (or maybe a new ministry). That seems to suggest a more explicit policy focus. We’re yet to finalise our updates and consolidate this, which we will be doing early next year as we launch our 2015 report and findings – but watch this space for when we launch our new findings in early 2015 for our final analysis of the latest data.

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[1] This blog was written by Jo Walker the Prorgrammes Manager of GSW

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