Equitable financing and solidarity

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Ensuring the equitable and sustainable financing of national social protection schemes is one of the key challenges for policy makers. ILO Recommendation No. 202  underlines the principles of solidarity in financing as well as financial, fiscal and economic sustainability with due regard to social justice and equity.

Social protection systems can only guarantee protection for all members of society, if appropriate risk pooling and redistribution mechanisms are in place, as a matter of solidarity between the healthy and the sick, between economically active age groups and elderly and children, between those with well-paying jobs or high incomes and those without employment or with very low incomes. Solidarity in financing across all members of society cannot be achieved without considering a diversity of financing mechanisms for social protection provisions, either by subsidising non-contributory schemes for those who are unable to contribute or have low and incomplete contributory histories, or by setting up non-contributory schemes. In fact, many countries, such as Brazil, Ghana and Thailand, have used a combination of social security contributions and taxation (partly supported by external resources) to extend social coverage to larger groups of the population with a view to achieving universal protection.

Photo credit: “Borrowers’ group in Indonesia” by waterdotorg (CCBY 2.0 via Flickr).

Legal Instruments

Social Security (Minimum Standards) Convention, 1952 (No. 102)

A reference for the development of social security systems, Convention No. 102 is the flagship of the up-to-date social security Conventions since it is deemed to embody the internationally accepted definition of the very principle of social security.  Convention No. 102 is unique for both its conceptual formulation of social security, and the guidance it provides for […]

Social Protection Floors Recommendation, 2012 (No. 202)

Recommendation No. 202 is the first international instrument to offer guidance to countries to close social security gaps and progressively achieve universal protection through the establishment and maintenance of comprehensive social security systems. To this aim, the Recommendation calls for (1) the implementation, as a priority, of social protection floors (SPF) as a fundamental element […]

Legal Cases

Adoption of principles of collective financing and social solidarity in Bolivia

In 2010 Bolivia adopted a new constitution that established a new hierarchy of legal standards by giving precedence of international instruments ratified by state over national laws. In the spirit of harmonizing existing law to the new Constitution, the State and the Bolivian Workers’ Federation (COB) signed a framework agreement for the reform of Bolivian […]

Austerity measures that contravene Conventions by reducing social protection and increasing poverty in Greece

Recalling previous recommendations, the Committee observed that the austerity measures in conjunction with the continuous contractions of the economy, employment and public finances posed a threat to the viability of the Greek national social security system, resulting in the impoverishment of the population, thus undermining the application of all accepted parts of Social Security (Minimum […]

Resources

Income Inequality and Labour Income Share in G20 Countries: Trends, impacts and causes

  The Government of Turkey has made inclusiveness one of the three priorities of its G20 Presidency. This builds upon the G20 Leaders’ commitment in 2014 to “…support development and inclusive growth, and help to reduce inequality and poverty.” Indeed, the inclusiveness of growth, and the related issues of growing inequality and declining labour income […]

Why Macroeconomic Policy Matters for Gender Equality

This brief synthesizes research findings, analysis and policy recommendations on creating an alternative gender-responsive macroeconomic agenda. Macroeconomic policy, including fiscal and monetary policy, is often thought of as gender-neutral. But economic policy choices affect women and men differently because of their different positions in the economy, both market (paid) and non-market (unpaid). For instance, budget […]

Social Budgeting

The first part of the book provides guidance for designing a social accounting system. The second part shows how the relationships between the economy and the social protection system can be translated into a quantitative model which permits projections and simulations to be carried out. Includes two concrete country applications. Link to this page

Shaping the Future of Social Protection: Access, Financing and Solidarity

The proposals set forth in this document rest on the premise that public policy should be guided by the ownership of rights. These recommendations are therefore designed to build bridges between social rights and the policy guidelines needed to make them more enforceable through improved access, better financing and greater solidarity. To that end, an […]

Equity in financing and use of health care in Ghana, South Africa, and Tanzania: implications for paths to universal coverage

Universal coverage of health care is now receiving substantial worldwide and national attention, but debate continues on the best mix of financing mechanisms, especially to protect people outside the formal employment sector. Crucial issues are the equity implications of different financing mechanisms, and patterns of service use. This report provides a whole-system analysis—integrating both public and […]

Financing social protection

Designing social protection systems that are effective and equitable as well as fiscally, financially and economically efficient has been a challenge for many countries. This book offers a comprehensive overview of the many financing options available while also provides a thorough analysis of their advantages and disadvantages and their financial and economic implications. The most […]

Reversing pension privatization. The experience of Argentina, Bolivia, Chile and Hungary

This paper systematically compares and evaluates the reforms of private pensions systems in Argentina, Chile, Bolivia, and Hungary due to initial failures in design and performance after its implementation. The document presents advantages and flaws of the structural reforms and private pension systems before the re-reform and analyses legal features and socio-economic effects of the […]

Fiscal Space for Social Protection: Options to Expand Social Investments in 187 Countries

It is often argued that social protection is not affordable or that government expenditure cuts are inevitable during adjustment periods. But there are alternatives, even in the poorest countries. This working paper offers an array of options that can be explored to expand fiscal space and generate resources for social investments. These include: (i) re-allocating […]