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Module 15: Social protection and the social contract ILO, 2013.

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1 Module 15: Social protection and the social contract ILO, 2013

2 Key questions What is a social contract? Why is there a need for a contract? What is the origin of the social contract? What is the role of ideologies in influencing social policies? What is the role of religion in influencing our vision of society and social protection? What other factors influence social protection policies? What is a welfare state? What are experiences from different countries? What is the basis for social contracts in different countries?

3 Social contract is an implicit contract or agreement on how to live together in a society It defines rights and duties of all parties, e.g. people pay taxes, government provides public services financed from taxes It may be established within a family, within a community, between the government and the governed Includes social policies and taxes Definition of rights and duties must evolve over time The ABND is built upon a national dialogue process, and thus the vision of society and social contract are reflected in the ABND recommendations Social contract

4 It starts with the origin of society, i.e. the state of nature State of nature is human life without any political or social order In Thomas Hobbes’s state of nature, human beings are perfectly free and equal, i.e. anyone can kill anyone Result: Life is “a war of all against all” Humans could not improve their lives or perform productive activities as they were busy defending themselves There was need for a mutual agreement Need for a contract

5 Origin of social contract Humans created an agreement to live in society Social contract: ruler protects the people, people have to give up some individual rights People gain security and civil liberties It is a choice between total freedom and security

6 According to Jean-Jacques Rousseau, society is not abdication of freedom People lose their natural liberty, but gain civil and moral liberty He says of moral freedom, “obedience to the law that one prescribes for oneself is freedom“ as we do no more than obey ourselves Origin of social contract

7 IdeologyAimsRole of Government Best means of distribution Libertarian Individual liberty Minimum State intervention, austere welfare state Private market Liberal Maximize total utility of people, social justice (Rawls) Moderate redistributive role of State, to serve society’s goals Mixed economy i.e. private market moderated by State intervention Socialist Equality, freedom, fraternity Significant redistributive role of State Mixed economy (Democratic) / State intervention (Marxists) Role of ideologies in influencing social policies

8 Ideologies influence the design of social policies E.g. Barack Obama’s Healthcare Reform, 2010 sought compulsory universal healthcare coverage and payment of fine if a person does not have medical insurance Ideological split between proponents of universal coverage and Republicans who declared this as an “infringement on the rights of individuals” Role of ideologies in influencing social policies

9 Religion is a chief factor influencing how people view society However, all religions advocate similar principles regarding solidarity and mutual help Buddhism -> interdependence, mutual protection Role of religion Buddha’s famous discourse about 2 acrobats: “By protecting others, one protects oneself“

10 Confucianism -> altruism: “Welfare of the society above the individual” Islam -> charity: “Zakat” to share 2.5% of one’s wealth But, global influence in recent years has diluted religious feelings, cultural and family relations Role of religion

11 Other influencing factors Singapore has a pragmatic culture Limited role of government and religion in social protection Compulsory savings by individuals 2008 economic crisis focused global attention on social protection Availability of fiscal space -> universal vs. targeted, contributory vs. non- contributory? Lack of awareness on the necessity for social contributions impacts successful implementation of contributory social insurance schemes

12 Welfare state Idea of welfare state started gaining momentum in developing countries in 1980s Welfare state supports the poor and allows income redistribution An exchange: rich groups taxed more, State protects people Protecting the poor indirectly protects the rich With more skills and better health, the poor can contribute more effectively to the nation’s development

13 Experiences from countries Thailand Important role of monarchy in society Mix of policies  Universal coverage guaranteeing a minimum level of benefits to all e.g. Universal Healthcare Coverage Scheme  Targeted schemes for specific vulnerabilities e.g. Non- contributory allowance schemes for the elderly, disabled and people with HIV-AIDS

14 Indonesia Social security law, 2004 and Constitution provide for social security to all Lack of resources has slowed implementation It is considered unaffordable to pay for the non-poor -> universal coverage not a popular idea Focus is on income redistribution between the rich and poor, with little focus on middle class Rights-based approach still to gain momentum Experiences from countries

15 Freedom vs. equality in designing social policies Universal vs. targeted schemes? Voluntary vs. compulsory schemes? Other factors that shape people’s vision of society and social protection? Basis for social contract in countries

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