From historical trends to investment pathways: Social protection expenditure in Pacific Island Countries and Timor-Leste

How to finance sustained and increased social protection investments in Pacific Island Countries and Timor-Leste is a key question facing policy makers. Following two decades of gradually increasing social protection investment in the region, social protection came to the fore in the context of the COVID-19 pandemic as a core component of fiscal response packages. Social protection also has a potentially critical role to play in catalysing the ongoing recovery from the crisis, by helping to stimulate local and national markets, and building social capital. Nevertheless, this inevitably requires investment, which poses a challenge in the constrained fiscal environments faced by many countries.

This paper seeks to support analysis of social protection financing by providing an overview of the size, composition, and historical evolution of social protection expenditure in Pacific Island Countries and Timor-Leste. The focus is on long-term social protection schemes rather than short-term emergency schemes (such as those responding to COVID-19). Such information on recurrent expenditure is important for understanding the scale and nature of investments that are already being made while identifying major gaps in coverage. Meanwhile, a historical analysis can also provide a reference point for future pathways to sustainable social protection financing. This paper is published with an accompanying set of data tables with different tabulations that can be used and adapted by those seeking to undertake analysis of social protection in individual countries or across the region.

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