Chair:

Andy Norton

Speakers:

Caroline Moser, ODI
John Seaman, Save the Children Fund UK

Andy Norton introduced the third meeting of the series. The theme of this meeting was safety nets and the related issues of social protection and livelihood protection.

Caroline Moser initiated the discussion, providing an overview of the analytical framework for social protection, largely provided by the World Bank in its World Development Report (WDR), as well as insights from her recent research in Bolivia. The WDR links social protection with issues of risk and opportunities and the livelihood debate. It analyses sources of risk at the micro, meso and macro levels, and outlines three types of risk arrangements - risk prevention, risk mitigation and risk coping strategies - by both informal and formal mechanisms (which the World Bank has developed into a risk management matrix - see Table 2 in the background notes - forthcoming).

The purpose of the Bolivian study was to ascertain whether the framework these conceptualisations provide is useful or not, especially in light of the introduction of Poverty Reduction Strategy Papers (PRSPs) in the HIPC countries. Research showed that risks in Bolivia were identified as mainly falling into the following areas - natural, health, social, and economic. There is an enormous wealth of informal mechanisms to deal with risk - migration, crop and plot diversification, credit arrangements (pasanukas), social capital investment, health care insurance, etc. On the whole, the framework is a useful one.

However, there were also some weakness identified with the framework:

• the significant power of international donor communities (e.g. CARE International, USAID, Food For The World, etc) does not appear in the accounting, when in reality donors are very involved in the process;
• more understanding is needed on what goes on in the formal sector;
• policies need to be designed to take account of informal mechanisms or social protection - utilising their strengths and not 'crowding out' local solutions; and
• further analysis on how to move from coping to mitigation is required. Notwithstanding these weaknesses, the WDR framework does provide a useful new approach.

John Seaman provided a more sceptical outlook, not of the concept of social protection itself, but of the likelihood that there was something new in this approach or that it would have a significant impact in the poorest countries. There is a compelling case for doing more on poverty reduction than is currently the case in many countries (where in some areas, up to 40% of the population are living in poverty) for several reasons:

• for humanitarian reasons;
• for practical reasons;
• unless something is done about the very poor people in a country, the country cannot develop fully; and
• the DAC targets will not be reached in the poorest countries if action is not taken now.

The constraints of a targeted approach are well known. The more targeted the approach, the more it costs and the more work involved, but the more likely the project is to be successful and useful. Still, there are various options available: i) to improve the income of the poor (for example by public works schemes); ii) reduce costs for the poor (by reducing taxation or health costs); and iii) controlling prices, especially of food, to help poor withstand shocks. The fact that the World Bank has moved this debate back into the mainstream is encouraging. Mitigation is a long-standing debate and it is good that it is back in the forefront, as it provides a more useful way of thinking about the problem. But unless the fundamental problem of insufficient resources being channelled into poverty reduction is solved, it will not be of much use. To have a significant and long-lasting impact, funding needs to be substantial, recurrent funding over several years.

In the discussion, a number of points were made:

• The need to ensure that the linkages between the different factors behind poverty (e.g. for example how AIDS impacts on informal coping mechanisms) are considered and taken into account more fully.
• The concept of social protection would be more effective if there was more of a focus on macro policy dimensions and the elements of risk these introduce.
• There is a need for better understanding of the complex relationships between the different types of risks and shocks.
• It is imperative to move from focusing on micro to macro issues in poverty reduction. PRSPs might be the mechanism by which this can be achieved. Advocacy, lobbying and access to power are vital in this process.
• The issue of rights and how they should be introduced into the debate was raised. It might be useful in terms of leverage to get the debate onto the macro level.