World Bank Involvement in Social Welfare System Reform and Lessons Learned

1. World Bank Involvement in Social Welfare System Reform and Lessons Learned Aleksandra Posarac World Bank

2. Economic growth and investment in human capital • Prosperous, stable societies need healthy, educated, skilled, active citizens • Human capital has long been identified as one of the key determinants not only of individual welfare but also overall socio-economic growth and development • Each single individual counts: demographic pressure

3. Why investing in children? • Children are human capital • Child development and welfare outcomes reflect investment in children. • Investment determines future productivity (individual and of society as a whole)

4. Investment in children: • generates higher economic returns • reduces social costs (positive externalities) • contributes to greater social equity and social cohesion • increases efficacy of individual social sector programs • contributes to greater labor force participation of mothers

5. Human development sectors • Education • Health • Social protection • Each one is present throughout the life cycle • They deliver best results when linked into a range of services (integrated approach)

6. Social protection • Economic growth is necessary but not sufficient to ensure that all members of society participate in it and benefit from it • Social protection is defined as a collection of public measures to improve and/or protect human capital • Well-designed and implemented social protection systems and policies contribute to more inclusive growth and strengthen cohesion (equity aspects), enhance efficiency and hence are growth-promoting by themselves

7. Social risk management approach to social protection (1) • SRM is a framework used to analyze: the sources of poverty and vulnerability, the ways how societies manages risks, and the relative costs and benefits of various public interventions on household welfare. • Poverty reflects an unacceptable level of well-being, vulnerability captures the exposure to uninsured risk leading to a socially unacceptable level of well-being currently and in the future (vulnerability to poverty but also vulnerability to other risks: death, divorce, crime, substance abuse, violence, etc.)

8. Social risk management approach to social protection (2) • Individuals and households face risks (insurable and non-insurable); materialized risks become shocks and have negative impact on well-being (material, physical, emotional, psychological…) • SRM looks at how poor and vulnerable individuals and households can be helped to better manage risks and become less susceptible to damaging welfare losses

9. Risk reduction, mitigation and coping (1) SRM comprises actions that occur before and after a shock—usually, but not necessarily an economic one—has occurred • Some reduce the impact that a future event might have on a household or an individual (ex ante risk mitigation) – social insurance arrangements

10. Risk reduction, mitigation and coping (2) • Other help households or individuals cope with a shock once it has occurred (ex post risk coping) – mostly social safety net interventions; • Finally some reduce the likelihood of a shock occurring (reduction/prevention of risk): include responsible macroeconomic policies, labor market policies which enhance skills development and job creation, etc. • Some programs address several risks

11. Risk coping – social safety nets • The objective of the SSN is to improve welfare of chronically and transient poor and vulnerable households, including individuals and families facing difficult life circumstances • Mostly risk coping, they also contribute to risk mitigation and to some extent risk reduction • They enable households to employ or benefit from other social risk management strategies, increasing their chances to become more resilient to risks and shocks and to exit poverty and overcome other life difficulties permanently.

12. Social safety net programs • Income support: to increase consumption (cash, in-kind, targeted, sometimes conditional, etc.) • Economic empowerment programs (skills development, education catch-up, income-generation programs, business start-up, grants, micro-finance) • Social care services to vulnerable individuals/families (including child welfare services)

13. Social care services • Integral part of the safety net system • Address vulnerabilities and social problems that affect poor and non-poor population alike • The groups in need of social care services are many (children, families and women at risk, people with disabilities; elderly, etc.) • Difficult situations faced by these groups negatively affect human development, labor market participation and productivity, they lead to deprivation and exclusion, and may induce significant negative externalities and social cost, if not attended to adequately and in a timely fashion • The types of services are many and range from social work and psycho-social counseling, care and rehabilitation for disabled people, at home services for frail elderly, shelters, legal advice, etc. to family substitute services for children without parental care.

14. World Bank focus so far Analytical work and lending (projects) • Health • Education • Social protection: social insurance (pensions), social assistance, labor market policies • Relatively limited involvement in social care systems and policies development, reform modernization…. (in some countries more than the others) • SIFs (initially infrastructure rehabilitation, increasingly involved in social welfare services (piloting)

15. Involvement in social welfare/care systems reform • Both analytical and investment support • Entire ECA Region; South-East Europe: Albania, Serbia, Romania, Macedonia, Bulgaria, Turkey, Croatia • A combination of institutional development (legal framework), capacity building, piloting of new initiatives

16. Explaining the WB focus • Biggest impact on human development (i) the size of affected population (ii) the size of the problem (iii) amount of resources involved (fiscal attention) • Increasing poverty was calling for programs with immediate impact (cash transfers, Bulgaria one of first to introduce CCTs) • Client interest (demand)

17. Why relatively limited involvement in social care/welfare services? • Although an important individual and social welfare and inclusion concern: • Client demand? There should be a consensus that a particular intervention is a priority (advocacy is not our particular strength) • Knowledge gap; challenging design; requires permanently new solutions; • Complex for implementation with many players/interests involved • Long-term involvement (projects are typically 4-5 years, implies a series of interventions) • Limited resources (links to public choice and inevitable trade-offs)

18. What have we learned (1)? • We need to build a constituency within our own institution • Importance of a champion (or a team of champions) and sustained strong commitment of key cabinet members (finance, in particular) • Knowledge, sufficient resources and sufficient time: patience and persistence • Partnership (at the national, but also international levels: speaking the same language, sharing the same vision) • Political economy (no interest shall remain unaddressed)

19. Lessons learned (2) • There is a role for everyone to play (the state, service providers, NGOs, CBOs, beneficiaries, etc.) – the importance of a balanced approach • Changing laws and rules is necessary, but not sufficient for a change: persistence in implementation and sufficient resources • Education of social workers, case management, standards, plan for de-institutionalization and transformation of institutions • Prevention: a range and a continuum of services

20. Bringing in the “missing element” • Analytical work to underpin interventions: making a case by assessing costs and benefits (direct and indirect) of child welfare interventions • Pool of knowledge with examples of good practice; • Working with clients, raising the child welfare questions persistently and advocate for changes and improvements (we need partners) • Bring out clearly the human capital aspect of social welfare services • Work with partners (involve them in analytical work and projects development and implementation; a challenge of brick, mortar and computers vs. TA • Never give up.

21. Thank you!