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Blogs, Macroeconomic policies

The social protection floor index: A tool to help us keep, and finance, a promise

The ILO Social Protection Floors Recommendation No. 202, unanimously adopted by 184 members of the International Labour Conference in 2012, provided for the first time concrete content to the abstract right to social security.

Recommendation 202 was born out of a desire to protect the vulnerable from the consequences of the Global Financial Crisis (GFC). It was one of the nine UN crisis initiatives agreed upon between the heads of all UN agencies in April 2009, time by when it had become obvious that, barring decisive action, ultimately the poor, the sick and disabled, the old and the unemployed would have to bear the lion’s share of the economic burden unleashed by the crisis. But, perhaps unintendedly, it helped define the right to social security, carrying important consequences for financial and fiscal policy. One of the agreements in the Addis Ababa Agenda for Action adopted as part of the Financing for Development process last year concerns, precisely, the delivery of social protection and essential services for all. It calls on national governments to consider setting “nationally appropriate spending targets” and committing “strong international support” for such efforts.

A recent discussion paper by the Friedrich-Ebert-Stiftung written by researchers from the Maastricht School of Governance on behalf of a global civil society Coalition for the Social Protection Floor (SPF), presents a new Social Protection Floor Index (SPFI) that aims at monitoring the degree of implementation of national SPFs across countries and over time.

A fall-out of the Global Financial Crisis:  a global formal consensus on the right to social security

Probably, the fear of the public reaction to the GFC had a lot to do with the changed role of social protection in national and international policies. Social protection systems were strengthened to cope with the social fall-out of the crisis. It is a sad fact that many of these measures were scrapped again a few years later when austerity policies took root again. But that is not the topic of this blog. The fact remains that never – perhaps since the period of the Great Depression or the period of economic and social reconstruction after World War II – has there been that much global public support for social protection and more acknowledgement for its role in national development strategies as well as in the management of economic, social and political crises – than after the GFC. A new global consensus on social protection emerged.

It was accepted as obvious that people cannot be productive and make productive and  meaningful contributions to societal and economic development if they are neither  healthy,  nor well nourished, nor educated nor have a minimum of income security and have to fight for their bare survival doing menial and exploitative jobs each day of their generally too short lives.   Neither can economic and social crises be managed without solid social transfers to the most affected population groups.

There is no real need for many more studies to prove these points.  There is sufficient evidence in the Global South that at least basic social protection systems are affordable everywhere and in the Global North that no successful economy has ever developed without a minimum level of social security.

With R. 202 the global community has unanimously accepted the commitment to achieve at least a floor of social protection for all people. That commitment was reaffirmed by the new Sustainable Development Goals. Target No. 1.3 of SDG One statesImplement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.” While that target is much less stringent than many in civil society would have wished for, it still recognizes the importance of the SPF and social protection for human development.  Without a floor of social protection too many people would have not even a minimum of income and health security that would enable them to live a life in a minimum of decency. The first target of R.202 and SDG One are to improve the lives of the 900 million people that still live in abject poverty and utter insecurity.

Providing contents to the largely undefined right to social security

Quasi as a side effect, though, and in an almost unnoticed way, the community of nations adopting the Recommendation had solved the definitional problem of the terms social protection and social security.

In 1948 the Universal Declaration of Human Rights had stated  in article 22 “Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State.” Article 25 had further specified “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” In 1966 the International Covenant on Economic Social and Cultural Rights ICESC reinforced in article 9 the right to social security by the categorical statement “The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance.” That statement is further amplified in articles 11 and 12.

So far 164 of the 193 member states are parties to the Covenant. The right to social security is widely accepted but far less widely implemented.  The ILO estimates that about 75 per cent of the global population does not enjoy comprehensive social protection.  Even almost seven decades after the promise of social security for all was made, that promise so far remained broken.

One of the barriers to the implementation of the right to social security might have been that its concrete content was never clearly defined. As a consequence, it was just too easy for governments to hide behind the myth that providing even a minimum level of social protection for all was impossible.  The standards to be met and specified in in ILO conventions, largely for the formal sector, were much considered too high and their implementation not affordable.  A decent and reasonable minimum level of social security was said to be nowhere defined.

That changed in June 2012. At the 101st International Labour Conference in 2012, 184 Members unanimously adopted the Social Protection Floors (SPFs) Recommendation No. 202, which provides guidance to Members to establish and maintain SPFs as core element of their national social security systems, guaranteeing access to essential health care and a basic income over the life cycle.

The Recommendation stipulates social security, i.e. income security and health security, as the objective of social protection. Furthermore, another largely unnoticed development took place.  The ILO, when demanding social security not only for the formal sector workforce but for all residents, took a bold step from promoting decent work to promoting decent societies.

A national SPF should comprise at least four basic social security guarantees that are set out in Articles 4 and 5 of Recommendation No. 202:

  • Access to a nationally defined set of goods and services constituting essential health care – including maternity care – that meets the criteria of availability, accessibility, acceptability, and quality;
  • basic income security for children at a nationally defined minimum level, which provides access to nutrition, education, care, and any other necessary goods and services;
  • basic income security at a nationally defined minimum level for persons in active age who are unable to earn sufficient income, particularly in cases of sickness, unemployment, maternity, and disability; and
  • basic income security at a nationally defined minimum level for older persons.

Recommendation No. 202 clearly formulates a protection objective. According to Article 4, “these guarantees should ensure that all in need have access to essential health care and basic income security which together secure effective access to goods and services defined as necessary at the national level.”

The recommendation  also urges members to endorse a number of key principles when they put it into practice. Among others, this includes the universality of protection, the adequacy and predictability of benefits and non-discrimination. What the Recommendation on national floors of social protection actually does is defining a minimum level of social security that has to be guaranteed to every resident.

The SPF Index: A tool to remind promisers of their promises

What is missing too often in global social policy is the political will to move from cheap and easy promises made at the global stage to concrete and perhaps costly action at the national level. To translate the global promises into social reality in countries, policy and political demands for social justice have to be articulated. Civil society organizations are natural agents of political will. R. 202 and SDG One create the credibility and the policy space that allow civil society to formulate such demands and the basis of globally accepted social standards. The prerequisite the formulation of policy demands for social protection is evidence, as to the extent to which the four social security guarantees (health security, income security during childhood, adulthood and old age) are implemented at the national level.  R. 202 envisages regular national monitoring of the progress made on the implementation of R. 202.  However, it does not provide a tool to do so.

The Social Protection Floor Index comes to fill this lacuna. The SPFI provides an indication of the degree of implementation of national SPFs, allows comparisons across members and, in future, can contribute to monitoring progress of countries over time.

The logic of the SPFI is thereby not to look at attainments that are inherently difficult to agree on and to measure, but to focus on remaining protection gaps. These shortfalls are expressed in terms of a country’s Gross Domestic Product (GDP). The SPFI thus presents a number with a concrete meaning, which eases interpretability and is intuitively understandable for a wide range of audiences.  The index can be interpreted as the minimum amount of resources – measured in percent of GDP – necessary to close national protection gaps.  The index figures calculated for all 142 countries for which data were available at the World Bank or OECD. These figures can be directly used by civil society to try to shame governments into action.

First index results:  Most countries can close the gaps a few need help

The results for 2012 illustrate that for most countries, closing gaps in order to fulfil Recommendation No. 202 does not require unreasonably large amounts. These do not necessarily have to come from additional government resources; countries can also discuss the reallocation of other social and non-social expenditure to purposes that could yield higher returns in terms of reducing poverty and inequality.

About half (70) of the 142 countries for which data were available would require an allocation of less than 3.5 per cent of their GDP to close their income security and health security gap.  About two thirds of that half (46, among them nearly all European countries) would need to allocate an additional 2 per cent of their GDP to close their SPF gaps. For them there is little excuse not to act. A number of other countries would need a major but not impossible effort to close their protection gaps.

However, some country need international solidarity, should the community of nations wish to keep its promise. Twelve African countries would require an additional allocation of more than 10 per cent of their GDP.  This is a clear call for the international community to support the establishment and maintenance of national SPFs in the respective countries and to contribute to the realization of the right to social security.

Michael Cichon, Graduate School of Govenance at UNU Merit, Maastricht (The Netherlands). Click here to download full paper on Social Protection Floor Index.

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