World Bank guidelines for universal social protection are lacking

As rising inflation, the impacts of climate change, the Covid-19 pandemic and armed conflict create rising levels of hunger, poverty and inequality around the world, Universal Social Protection (USP) – designed to ensuring an adequate standard of living for all – is more important than ever.

The World Bank is the largest social protection funder, with a portfolio of $29.5 billion in 71 countries. Two weeks ago, the World Bank released its new sector strategy for social protection and employment, also known as the SPJ Compass. The strategy makes a strong commitment to the USP. However, his advice on how countries can achieve this is problematic.

It emphasizes ‘prioritizing the poorest’, despite evidence, including from the World Bank itself, that programs that target households in extreme poverty are insufficient.

Human Rights Watch and others, including a recent study by the nongovernmental organization Development Pathways, found that poverty-targeted programs fail to protect human rights, are prone to mismanagement and corruption , and that they can stigmatize people living in poverty. Everyone has the right to social security, which is essential to guarantee other economic and social rights, in particular the right to an adequate standard of living, which includes the right to food and adequate housing.

Poverty-targeted programs may not reach all people in need because they are often designed too narrowly. For example, in Lebanon, where it is estimated that more than 80% of the population lives in poverty, the two largest social protection programs – both financed by the World Bank – are designed to reach only 27 % the poorest.

Additionally, the targeting methodologies promoted in the strategy are flawed. World Bank strategy suggests countries can identify poorer households using dynamic social registries, a database that determines eligibility for benefits programs, as well as means testing by proxy. But research from the International Labor Organization and others suggests these methods are highly imprecise and fail to identify beneficiaries.

Targeted programs can play a secondary role in USP systems where benefits that protect all people throughout their life cycle, from childhood to old age, are guaranteed. But they shouldn’t be the very foundation of an otherwise thin protection system.

Universal systems that align with human rights standards are more effective in leaving no one behind and therefore in reducing poverty and inequality, especially when funded through progressive taxation.

As officials gather in Washington this week for the World Bank’s annual meetings, they are expected to pledge to step up the USP. Given the bank’s current financial investment, the impact would be substantial.

The world may be on the brink of a prolonged economic downturn and with more than four billion people still without any social protection, USP is more urgent than ever.

Joel C. Hicks