Social risk management: The World Bank's approach to social protection in a globalizing world

Social protection is moving up on the development agenda. Dismissed as ineffective, expensive or even detrimental to development in developing countries for a long time, it is now increasingly understood that assisting individuals, households and communities in dealing with diverse risks is needed for accelerated poverty reduction, and sustained economic and social development. Conceptually, social protection is shifting towards social risk management to reduce the economic vulnerability of households with appropriate instruments and to help them smooth consumption patterns. For the poor countries, it is about moving away from unproductive coping strategies adopted by households (such as removing children from schools, delaying health care, selling livestock) that are buffeted by shocks (such as drought, cyclones, floods, conflict, terms of trade, policy reforms, health, unemployment, etc.). It seeks to replace these strategies with ex-ante planning and mechanisms to help households anticipate and insure against these shocks (through public works, weather-based insurance, water management, grain storage, micro-savings, etc.). For all countries, it is about rethinking the design and implementation of traditional public interventions such as labor market, social insurance, and social assistance policies. The paper outlines the development aspect of social protection, presents the social risk management concept and its operationalization in risk and vulnerability assessments, explains the focus on vulnerable groups (such as children and the disabled), and briefly reviews traditional programs such as labor market interventions and pensions through the social risk management lens.