On 26th October 2023, the ILO organized a webinar, hosted by socialprotection.org, to discuss the key findings and recommendations of the recently-published paper “A global fund for social protection. Lessons from the diverse experiences of global health, agriculture and climate funds”. The webinar drew together the lead authors of the paper as well as discussants with expertise in global governance and social policy to explore the challenges and questions arising from this research. The panellists presented experiences of setting up global funds across various sectors and the potential implications for a putative GFSP. The discussion, moderated by Shahra Razavi (Director, Social Protection Department ILO) focused on institutional governance arrangements of existing global funds and what they tell us about critical issues that need to be carefully navigated in the design and institutionalization of a GFSP.
Over half the world’s population has no access to social protection. This shocking fact is underpinned by serious under-investment in social protection, itself the outcome of structural inequalities in the global financial and development architectures, and the situation is unfortunately only getting worse (Development Finance International 2023). While the need to act is becoming increasingly evident, the way forward to close these social protection gaps has not always been clear. One potential solution which has circulated in the global policy arena for over a decade has been to establish a dedicated Global Fund for Social Protection (GFSP). First proposed in 2012 by UN special rapporteurs Magdalena Sepulveda and Olivier de Schutter, the idea of a GFSP elicited interest as a potential mechanism for mobilizing resources and increasing the capacity of countries to invest in their social protection systems to better withstand the effects of crises and shocks.
Given the impact of the COVID-19 pandemic and the ever-growing climate crisis, it is no surprise that this idea has taken a stronger hold in the past few years. In 2021, at the International Labour Conference (ILC), constituents asked the ILO to ‘’explore options for mobilizing international financing for social protection (…) based on international solidarity and initiate and engage in discussions on concrete proposals for a new international financing mechanism, such as a Global Social Protection Fund, which could complement domestic resource mobilization efforts of countries’’.
ILO is making a two-fold response to this call, recalled Shahra Razavi, with one important contribution being its work, along with other UN agencies and development partners, to take forward the UN Secretary General’s initiative, Global Accelerator on Jobs and Social Protection for Just Transitions. The initiative provides technical support to countries to create an integrated employment and social protection policy push and find the much-needed financing, both domestic and international, to help create decent jobs at scale in the green, care and digital sectors and extend social protection to currently excluded populations. The second response from the ILO was to commission a comprehensive research paper to draw key lessons from the diverse experiences of global health, agriculture and climate funds to guide the possible design and implementation of a GFSP, and also feed into the Global Accelerator, especially its governance mechanisms.
Presentation: What could a Global Fund for Social Protection look like?
Nicola Yeates and Chris Holden
The research led by Nicola Yeates (Open University, UK) and Chris Holden (University of York, UK) focused on the main question: What might the governance structures and mechanisms of a putative GFSP look like? The research drew on the experiences of seven global funds in health, climate, and agriculture, with different modes of governance, institutional organization, and resource mobilization. The authors identified five key dimensions of governance based on the experiences of these funds: institutional and organizational structures; in-country stakeholder engagement, country ownership and coordination with national authorities and donors; resource mobilization and the development of affordable and sustainable financing; quality of investment and alignment with human rights and international labour standards; and focus on data, results, learning and innovation.
Source: Yeates and Holden ILO Webinar presentation, October 26, 2023
A mechanism for closing the financing gap
In particular, the authors noted that while a GFSP could be a key mechanism for closing the financing gap for social protection, there are risks and challenges to this approach that cannot be ignored. An additional global fund could lead to further fragmentation, as they noted had been widely observed in the case of global health funds. A GFSP could lead to the creation of parallel structures and duplication of goals, fragmenting funding to low-income countries further and ultimately undermining its own goals. On the other hand, as Olivier De Schutter (UN Special Rapporteur on Extreme Poverty and Human Rights) pointed out, fragmentation already exists in social protection. It is not a possibility in the future, but a reality that social protection systems contend with in the present. A global fund, he argued, dedicated to social protection could help consolidate the currently fragmented financing that is going to social protection.
Parallel to fragmentation is the question of adequate financing for such a fund. Multiple attendees posed the questions of how to address the risk of further fragmentation and secure adequate funding if there is no “new money” coming in, particularly in the context of austerity policies which are becoming increasingly prevalent. As Chris Holden reflected in response to these questions, fragmentation is a known risk within development funds. However, in the case of climate funds, this risk was somewhat mitigated by the fact that these funds were all established under the United Nations Framework Convention on Climate Change (UNFCCC), which facilitates coordination and a division of responsibility between funds. He also cautioned against the allure of “innovative financing” as a solution to funding gaps:
“Innovative Finance is a broad category referring to a range of mechanisms. These might help pull some funding forward, for example, but we would caution against thinking that they are a panacea: the money needs to come from somewhere, so we need to think about what the real source of the funding is.”
Country ownership, inclusive partnership and accountability
This reflection was echoed by Markus Kaltenborn (Ruhr University, Germany). While it is, of course, necessary to advocate for ambitious financing mechanisms in this specific field, he said, it is even more important for better social protection coverage and adequate funding that the mechanism operates in a fair and equitable manner. Regardless of the institutional framework that such a fund for social protection might take, as Markus Kaltenborn pointed out, there are certain basic governance principles that must be observed: country ownership, inclusive partnership, and accountability. Markus Kaltenborn argued that a future global fund should comply with these principles particularly because it would be an important requirement for such a fund to gain broad acceptance in the international community and to work successfully in practice.
Source: Kaltenborn ILO Webinar presentation, October 26, 2023
Country ownership requires that funding should be based on a country’s needs and priorities. As the authors reflected, the direct access model seen in some of the global climate funds contributes more to national ownership than funds which additionally involve an intermediary. However, as Kaltenborn pointed out, a fund for social protection would be somewhat different than existing funds for global health or the climate sector:
“When it comes to international social protection we are dealing with a different situation. Here it is always necessary to provide financial support for entire systems that are organized and supervised by the State and are long-term in nature because otherwise a rights-based life cycle approach to social protection cannot be realized.”
Moreover, for global financial instruments such as a fund for social protection, inclusive partnerships between donor and recipient countries are crucial. Both groups must have equal voting rights, rather than a system of governance that favours the donor which, as Kaltenborn pointed out, is a neo-colonial approach squarely at odds with development policies and paradigms that most countries are attempting to adhere to.
Drawing on her experiences in the public health area and the varied trajectories of major global health funds, Gita Sen (Public Health Foundation of India) presented further comments on the role of country ownership in the governance structures of global funds.
Global health funds, she argued, have received the lion’s share of funding when it comes to global funds at large. GAVI and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) are able to pull together large sums of money, particularly from the private sector, and are more flexible than State health programmes while focusing on critical concerns such as child immunization. However, it is impossible to ignore the fact that much of the decision-making in these funds is driven by for-profit, private sector motivations.
Taking the example of GAVI, which is well known as a public-private partnership (PPP), Gita Sen drew attention to GAVI’s focus on costly new vaccines even though less expensive older ones are still available—a critique that has received ample attention. The pitfalls of focusing largely on technology with a dominant role for private, for-profit corporations is clearly visible in this case. As a lead partner for vaccine access during the COVID-19 pandemic, GAVI promised over 2 billion vaccine doses in 2021. However, it clearly fell short, delivering less than a billion doses.
Questions of accountability and transparency are thus of utmost importance here, and Gita Sen pointed out that when discussing a GFSP, we need to go beyond simply calling for country ownership and recognize the power dynamics in the design and management of such a fund which is central to their results. It is necessary to examine whether there is genuine country ownership, and who administers the funds in the first place. Finally, it is also important to ask whether these funds actually address the root causes of the problem or leave them untouched, possibly even exacerbating the situation due to narrow focus and poor leadership. It is only when different elements of systems mesh and work well that a potential global fund can actually have a positive impact.
Do we need another Global Fund?
Olivier De Schutter
While much of the webinar led to discussants and attendees examining potential challenges and key concerns for the establishment of a GFSP, another key theme that emerged asked a much more fundamental question: do we really need yet another global fund?
Olivier De Schutter, one of the earliest proponents of the creation of such a fund, reflected on this during his remarks. He mentioned that while social protection needs more international funding and a new global funding facility, that does not require setting up an entirely new organization with a separate legal personality; nor does it require negotiating a new international instrument. Setting up a new instrument might take years, whereas what social protection systems across the world need right now is adequate sources of funding. It might be more realistic, he argued, to fund already existing actors and instruments rather than establishing another vertical fund which, as many people and the research report point out, runs the risk of further fragmentation.
Pierre Vincensini (International Organisation of Employers, IOE) recalled that IOE had been closely involved in the 2021 ILC discussion, and the call to explore more options for international financing for sustainable social protection. He too said that while a global fund would make sense to close the gaps in social protection systems, this should not necessarily mean the creation of new mechanisms or structures, as this might lead to duplication and underfunding. He stressed the need to strengthen ILO coordination with international financial institutions, in particular the World Bank which is a key player when it comes to global funds. He also underlined the importance of approaching the question of global funding by integrating the national level, in a difficult context of informality and debt crisis in many countries, considering all funding options without any prejudice, including private schemes.
Alison Tate (International Trade Union Confederation, ITUC) however, was strongly of the opinion that a GFSP is a step in the right direction. She pointed out that while social protection coverage is a huge challenge in many low-income countries, ILO’s research shows that these countries can finance their own social protection systems, but they need international support to kickstart them. What is necessary at this juncture is to foster country ownership and coherence in a meaningful way, building synergies between different actors within the country - government, social partners and civil society - to create more robust and resilient social protection systems, and supporting them at the global level.
The research paper and webinar discussions made a critical contribution by consolidating some of the key considerations and important recommendations for a GFSP through rigorous empirical research. The five dimensions of governance based on the experiences of existing global funds proved useful in guiding the discussion and focusing on the critical factors requiring clear strategic thinking when implementing a prospective GFSP. Drawing on the paper as well as on their experiences, webinar panellists brought thought-provoking analyses and questions to the table. The webinar was interspersed with questions from the audience, along the themes of potential safeguards against fragmentation, the role of private sector entities in a putative global fund, and potential next steps for the same.
Development Finance International (2023). 11 October - The Worst Debt Crisis Ever: Schoking New Debit Service Numbers. Accessed 28 November 2023. Accessible https://development-finance.org/en/news/831-11-october-the-worst-debt-cr...
Yeates, N.; Holden, C.; Lambin, R. C. Snell, C.; Idris, N.; Mackinder, S. (2023). A global fund for social protection Lessons from the diverse experiences of global health, agriculture and climate funds. ILO Working Paper 97. Accessed 28 November 2023. Accessible https://www.social-protection.org/gimi/RessourcePDF.action?id=58222