Presentation on theme: "Development economist"— Presentation transcript:
1 Development economist An Asian Welfare State Model? East and South Asian trajectories and approachesGabriele KöhlerDevelopment economistConference on Re-Thinking Asia II“Building New Welfare States: What Asia and Europe can learn from each other”Protestant Academy Tutzing28-29 October 2013Re-Thinking Asia II“Building New Welfare States: What Asia and Europe can learn from each other”Protestant Academy Tutzing, Bavaria/Germany, October 2013Re-Thinking Asia is an annual Forum, organized by the German Friedrich-Ebert-Stiftung (FES), which intends to stimulate a visionary debate on Asian politics in the 21st century and their impact on global policies affecting Europe. The Forum brings together a selected group of leading politicians, distinguished academics and experienced practitioners from Germany, Europe and Asia and creates space for courageous and visionary ways of thinking about future Asian-European cooperation.Re-Thinking Asia draws from the observation that Western perspectives on the emergence of Asia have for too long been dominated by old fashioned worldviews. On this reading the emergence of Asia is often portrayed as a threatening scenario for Europe asking for defensive policies in return or upholding Europe as a model for Asians to follow. The opportunities for Europeans and Asians to work together as partners are frequently overlooked in this interpretation. Against this background, the concept of Re-Thinking Asia aims to establish a progressive counter-narrative.
2 I.) Premises of the discussion Growing social inequalities in Asia and EuropeDespite commonly accepted fundamental values and idealsNeed for a progressive counter-narrative toTackle social inequalitiesMake social justice available to allReduce income inequality and unequal opportunitiesWhat role do comprehensive social security systems playHence: revisit the welfare stateSource: FES invitation
4 Vulnerability, poverty, informality Source ILO World Social Security Report 2010 p 31
5 Source: http://www. nationmaster Data for each country from latest available year 1993 (!) – 2004.This is a dated and static picture of the state of income inequality measured by the Gini coefficient. The closer to 0, the more equal income distribution, the closer to 100, the more unequal the situation; generally, a Gini coefficient higher than 30 is considered socially unjust. This graph shows the large differences in income inequality, and that many of the so called emerging economies, considered to be so successful in terms of economic growth, are among the countries with the highest inequalities.A dynamic picture showing changes over time would reveal the increasing income inequality of the past decade, but is not possible given the lack of time series and recent data.
7 III. Welfare state trajectories Sources: Mkandawire 2005; and other literature
8 Welfare state definitions Two -three – four – five pillarsEducationHealth accessSocial security and social assistanceActive labour market policiesFamily policy - welfare services
9 Pillar III: Social security Pillar II: Health A welfare state model Social Insurance, including health insuranceSocial assi-stanceLabour market policiesForms of micro credit, micro insurance, area-basedschemesChild protectionservices/transfersPillar III:Social securitySource author, based on ADB 2001.Different policy domains belong to social protection, and there are different ways of organising them. One broad based approach is to include social insurance and assistance, and also active labour market policies; microcredit and insurance; and even child-related policies.Specific reference: Isabel Ortiz , editor. Social protection in Asia and the Pacific. Manila: ADBAlso seePillar I:EducationPillar II:Health
10 Welfare state politics Nation buildingDemographic factorsEconomic progressProductivity enhancementEconomic compensation – anti-povertyEnhancing the domestic marketPolitical co-optation of subordinated classes by elitesGuilt or security concerns of the elitesPolitical stabilityPolitical pressure from trade union movements or “grassroots”Socio-cultural values and changing welfare provision arrangementsNormsPeer competitionCopycatting…. Social policy as a process driven by power relationsSources: Mkandawire 2005; and other literature
11 The North: welfare state history Germany Bismarckian reform: 1870sUS New Deal: 1930sJapan interventionist welfare state: post WWIIUK: Keynes and Beveridge 1950sNorthern, Central Europe, Southern Europe welfare states: since 1950sSources: Japan: Pierson: 2005: 228
12 The South: welfare state history Latin America in sUruguay, Argentina, Chile, Brazil, Costa RicaSri Lanka 1930sSouth Asia – Constitutions of 1940s/1950sSources: Pierson 2005; Wehrr et al 2012
13 The South: recent developments Source: Nora Lustig in High level panel report on the post 2015 development agenda. United Nations May Page 33. Estimate based on sample size of 144 countries.Most countries now have some form of social protection. See Barrientos et al.
15 “Developmental welfare state I” Japan, Republic of Korea 1st phase, Taiwan PoC, Hong Kong SAR, Singapore, MalaysiaSocial policy subordinate to economic developmentLow government spendingMeans tested, frequently conditional
16 “Developmental welfare state II” Korea:New social contract after 1997 – democracy and response to Asian financial crisisNational Basic Livelihood Security Act 1999:right to social assistanceuniversalisedguaranteed social minimum
17 Indonesia: recent social assistance programmes NameBLTUnconditional Cash Transfer( )RaskinRice for the PoorJamkesmasHealth ProtectionBSMScholarship for the PoorPKHConditional Cash TransferTransferTypeCashSubsidized RiceHealth service fees waivedCash & ConditionsTargetgroup (HHs)Poor & near poor HHsStudents from poor HHsVery poor HHsNumber of beneficiaries18.7 Mn HHs17.5 Mn HHs18.2 Mn HHs8 Mn Students1.5 Mn HHsBenefitlevelIDR 100,000 per month15 kg rice per monthUnlimitedIDR 480,000 per yearIDR 1,287,000 per yearKey executing agencyMinistry of Social Affairs(MoSA)Bureau of Logistics (BULOG)Ministry of Health (MoH)MoNE & MoRAMoSASource: Nazara, Suahasil. Poverty alleviation in Indonesia: Progress and challenges. Social Protection Conference, Myanmar, June 2012.
18 Philippines: conditional cash transfer Selection Procedures of Target HouseholdsTo raise the average food expenditure of poor householdsTo increase school enrollment and attendanceTo improve preventive health care for pregnant women and young childrenTo reduce child laborTo encourage parents to invest in their children’s (and their own) human capital: health and nutrition, education, and participation in community activitiesGeographical TargetingHousehold Assessment (Enumeration)Source: Solloso, Ernestina Z.. Philippines conditional cash transfer program. Social protection conference: call to action. Myanmar, June 25-26th, 2012.Selection of Poor Beneficiaries using Proxy Means TestEligibility Check
19 “Developmental welfare state II” China:Disconnect between urban and rural coverageSelective social contract: Minimum Subsistence Guaranteefor urban populations in 1999 – response to market reformsextended to rural populations in 2008does not cover migrantsRural cooperative medical insurance schemeuniversalisedRingen and Ngok 2013
20 “Developmental welfare regime III” South Asia: Bangladesh, India, Maldives, Nepal, Pakistan, Sri LankaNorms-basedStrong social inclusion angleMixture of means-tested and universalRights-basedJusticiable (notionally)Koehler and Chopra 2014
21 Social protection panorama South AsiaFood-relatedmeasuresSocialAssistancePublicworksAffirmative actionHuman rightsNational Rural Employment Guarantee (IND)Employment Generation Programme for the Poorest (BGD)Karnali Programme; Employment Guarantee Act (NPL)Employment generation for rural unskilled workers (PAK)Cooked school meals (IND)Subsidized PDS (IND, NPL, BGD)Subsidized grain pricesUniversal old age pension (NPL)Benazir Income Support Program (PAK)Child benefit (NPL)Unorganized sector health insurance (IND)Secondary school stipend for girls (BGD)Education for all (NPL)Child grants for girls (IND)Rural development and community based interventions (IND)Right to food/National Food Security Act (IND)Mid-day meal (IND)Right to education (all)Right to health services (all)Right to work (IND)Right to information (IND, BGD, NPL)Source: updated from Bonnerjee and Köhler The challenge of food and nutrition insecurity and policy innovations from the South. Rethinking Development in an Age of Scarcity and Uncertainty. EADI/DSA Conference.https://www.conftool.com/gc2011/index.php?page=browseSessions&form_room=28&presentations=show&print=yes
22 “Developmental welfare state IV” Dismantling: Europe 2005 onwardsPartial deterioration of entitlementsMeans testing reintroducedConditionalitiesExamples:Hartz IV in GermanyChild benefit in UK
24 Total Social Protection Expenditure, as % of GDP Social protection expenditures comprise social security, social assistance, and labour market policies.Data fromSource: The Social Protection Index: Assessing Results for Asia and the Pacific. Asia Development Bank. 2013, Philippines. Downloadable at:
25 Source: Asian Development Bank 2013 http://spi. adb. org/spidmz/index Definition social protection index:“The SPI is a relatively simple indicator that divides total expenditures on social protection by the total number of intended beneficiaries of all social protection programs. For assessment purposes, this ratio of expenditures to beneficiaries is compared with poverty-line expenditures. For example, if the SPI were in country X, this index number would mean that total social protection expenditures (per intended beneficiary) represent 10% of poverty-line expenditures. The higher this index number, the better a country’s performance.”“The example of an SPI of can also help explain how the SPI assesses the relative importance of the major programs of social insurance, social assistance, and labor market programs. For instance, the SPI for social insurance could be 0.065, the SPI for social assistance 0.025, and the SPI for labor market programs These three program-level SPIs necessarily add up to the overall SPI (e.g., = 0.100). This example is similar to the actual results across Asia and the Pacific. Social insurance is indeed the dominant form of social protection.”Source: ADB The Social Protection Index. Assessing Results for Asia and the Pacific . P. xii
27 Proposition IEach country has a trajectory of a developmental welfare state, but its characteristics differ as a function of power politicsSome are purely instrumental for nation building, growth, social appeasementOthers are progressive, as outcome of pressure from formal sector trade unions, informal sector or rural cooperatives, women's movements, social or faith-based CSOs
28 Proposition IICommon perception: welfare states were invented in EuropeIn fact, types of welfare states existed in the South before the NorthLatin America had welfare state elements in the 1910sSri Lanka“Zeitgeist” for welfare states: see post-war Europe, independent South Asia
29 Proposition III Convergence in Asia: 1st new wave: East Asia post 1998 economic crisis with new social policies2nd new wave: rights-based or notionally universal welfare states South Asia, South Korea, Southeast Asia and China, since early 2000s
30 Proposition IV Divergence South-North: While “Asia” is moving towards nascent universalist developmental welfare states (at modest level of coverage and benefit levels)Europe is moving towards a top-down welfare state (with remaining high coverage, but decreasing real entitlements, more conditionalities, and widespread public resentment)
31 Selected referencesAsian Development Bank, The Social Protection Index. Assessing Results for Asia and the Pacific. ADB Manila.Köhler, Gabriele and Deepta Chopra, eds., Development and Welfare Policy in South Asia. LondonMkandawire, Thandhika, ed., Social policy in a development context. UNRISD. Geneva, LondonPierson, Chris Late industrializers and the development of the welfare state, in Mkandawire, op. cit.Porsche-Ludwig, Markus Sozialpolitik in Asien. Ein Handbuch der Staaten Asiens von A-Z. LitVerlag Berlin: W HopfRingen, Stein and Kinglun Ngok, What Kind of Welfare State is Emerging in China? UNRISD working paperRingen, Stein, Huck-ju Kwon et al, The Korean State and Social policy. Oxford: OUPUNRISD, Combating Poverty and Inequality. Structural Change, Social Policy and Politics. GenevaWehr, I., Leubolt, B. and Schaffar, W ‘Welfare regimes in the Global South: A short introduction’, Austrian Journal of Development Studies, Welfare Regimes in the Global South, 28(1), pp. 6-13 .
32 Contact information Gabriele KöhlerWebsite: Development and Welfare Policy in South Asia Edited by Gabriele Koehler and Deepta Chopra Routledge, February 2014