From July 2016 to January 2017, four webinars were presented under the Fiscal space for social protection knowledge sharing initiative organized by the International Policy Centre for Inclusive Growth and HelpAge International.
The first of these instalments, “Inequality and Redistribution: Taxes and Transfers”, focused on the critical necessity of incorporating fiscal policy as an intrinsic factor for understanding how social protection can seek to address inequality and redistribution. In follow-up, “Harmonization of Contributory and Non-Contributory Programmes” argued for a clearer understanding of contributory versus tax-financed divides in social protection debates, crucial to understanding the financing mechanisms behind these programmes.
The last two webinars in this series, “Social compacts for sustainable financing of social protection systems” and “Constituency Building and Fiscal Space for Social Protection - Navigating Political Space”, explored key issues of consensus building and political action for pushing forward sustainable and equitable policy solutions.
Fiscal policies, redistribution and social protection
Social protection and fiscal policy, transfers and taxes, are intimately interconnected as instruments of redistribution. However, evidence to date shows that low and middle income countries tend to underutilize the latter, consequently reducing the former – defunding social programmes more than their high income country counterparts.
The first webinar in the series took a closer look at the fiscal policies practiced in Latin American countries, showing that personal and corporate income tax contributes very little to the overall tax collected – limiting the resources available for social expenditure. This is further exacerbated by the rampant issue of tax avoidance, representing a significant challenge in increasing revenue.
Some countries in the region, such as Chile and Mexico, have begun implementing structural tax reforms (along with social expenditure commitments) aimed at tackling persistent inequality. The need for the consolidation of fiscal pacts in the region is key, however, establishing reciprocity between tax inputs (not least of all the shoring up of a culture of compliance) and public service outputs remains a regional challenge. To learn more, check the recording of the webinar here and the presentations here.
Moreover, if the need to consolidate social compacts around promoting a sustainable fiscal space for social protection is to be addressed, leaving a large share of the population uncovered is a significant problem. In many countries there is a significant gap between the (often arbitrarily defined) poor and the non-poor - this “missing middle”, neither poor enough to be entitled to targeted non-contributory schemes nor eligible for contributory schemes, is thus left vulnerable. The second webinar in the series delved into these particular issues – see the recording here and the presentations here.
Social compacts and constituency building for sustainable financing of social protection
Social contracts are the foundation upon which inequality and poverty can be addressed, defining citizens’ rights and reciprocal government responsibilities towards them – in turn determining the fiscal contracts which establish taxation and spending priorities. Data on social assistance expenditure from around the world shows that the expansion of social assistance is not primarily dependent on economic development, but more on the type of institutions – in particular its social protection/welfare institutions. One-to-one relationships between the size of government and the level of economic development do not exist; it is the social contract, politics and institutions which matter in shaping social protection provision. The third webinar in the series dealt with these issues in more detail – see the recording here and presentations here.
There is thus a need to better understand which political processes help to build coalitions to favour the expansion of social protection – the theme of the last webinar in the series (see the recording here and presentations here). In Asia, for instance, civil society organisations (CSOs) have shown to have played an important role in this process. In the case of the Philippines, a confederation of CSOs organized successfully towards the provision of a social pension enacted in 2011, led by the Confederation of Older Persons Associations of the Philippines (COPAP) in partnership with the Coalition of Services for the Elderly (COSE) and other CSOs. Emblematic of CSO activism across the world, these organizations and stakeholders continue to pressure their government to consistently increase the programme’s budget and coverage (which rose from 130,000 pensioners in 2011 to over 2.8 million in 2017).
As in many cases, diverging opinions between government (itself a conglomeration of competing interests and preferences) and between different CSOs (e.g. organised labour and advocates of those caught in the informal sector) remained challenges to overcome. Over the course of dedicated advocacy, research, and stakeholder engagement, COSE and its partners have been able to successfully develop and release a variety of advocacy components including feasibility studies and verifiable data to convince policymakers. Together with concerted efforts at national and local levels the organizations involved have made great strides in pushing forward the matter of social protection and SDG 1.3 in the country.
The International Policy Centre and HelpAge International are currently co-organizing a new series of webinars on the topic of Social Protection and Social Accountability.
You can register for the first webinar here!