THE POTENTIAL CONTRIBUTION OF

SOCIAL ASSISTANCE TO THE CLOSURE

OF THE PROTECTION GAP IN ASIA
Franziska Gassmann
Maastricht University, The Netherlands

Disclaimer: The views expressed in this document are the views of the author(s) and do not necessarily reflect the views or policies
of the Asian Development Bank (ADB), or its Board of Directors or the governments they represent. ADB does not guarantee
the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice,
opinion, or view presented, nor does it make any representation concerning the same.

ADBADBI Learning Program on Financing Social Protection for Sustainable Development Goals
15-16 February 2017, Seoul, Republic of Korea
CONTENT
Background
Approach
Assessing the gap
Closing the gap
Recommendations

ADBADBI Learning Program on Financing Social Protection for Sustainable Development Goals
15-16 February 2017, Seoul, Republic of Korea
BACKGROUND
Despite impressive decline in poverty rates in Asia
330 millions in extreme poverty (ADB 2016)
Living standards of the extreme poor have hardly improved (Ravallion
2016)
Social assistance, in particular cash transfers, have proven to be
effective tools to
Reduce poverty and inequality
Increase human and physical capital
Generate local and regional multiplier effects
Foster economic and social mobility

Most countries in the region have at least one social assistance

program, yet coverage of the poor remains limited

ADBADBI Learning Program on Financing Social Protection for Sustainable Development Goals
15-16 February 2017, Seoul, Republic of Korea
APPROACH (1)
Objective:
Estimate the size of the social assistance coverage gap in 16 focus
countries
Assess the performance and costs of existing programs
Discuss policy options that may close the coverage gap until 2030
Social assistance defined as:
Non-contributory social protection programs
Provided regularly
Financed from general government revenues
Universal, categorical or means-tested
Focus on cash-based programs

ADBADBI Learning Program on Financing Social Protection for Sustainable Development Goals
15-16 February 2017, Seoul, Republic of Korea
APPROACH (2)
Estimating the size of the gap
Poverty and deprivation what is the need?
Existing programs how effective are they?
Closing the gap
Lower and upper scenario
Life-cycle approach
The way forward
 How big is the need? Poverty & deprivation
Poverty trends (national poverty lines)
Poverty rates decreased in 14 of the 16
countries; remained unchanged in the
Philippines; increased in Timor Leste.
More than 1/5 of the population below
national PL in 7 of 16 focus countries.

Stunting disparities (children <5), latest year available

Child malnutrition remains big concern

TL and Laos: almost 50% of children <5
are stunted
Risk much higher for poor children

ADBADBI Learning Program on Financing Social Protection for Sustainable Development Goals
15-16 February 2017, Seoul, Republic of Korea
What is already there?
Elderly population
Universal or means-tested social pensions
China, India, Indonesia, Malaysia, Nepal, the Philippines, Thailand, Vietnam, Timor
Leste
Children
Often in-kind (e.g. school feeding, fee waivers) or education stipends
11 of the 16 countries have school-feeding programs
Unconditional child grants are rare, often categorical and/or means tested
Mongolia, Thailand (pilot), Kazakhstan, Nepal
Conditional cash transfers
Indonesia, the Philippines, Timor Leste, Kazakhstan
Working age population
General social assistance programs for the poor
Azerbaijan, Kazakhstan
Programs for people with disabilities
Azerbaijan, Kazakhstan, Vietnam, Sri Lanka, Mongolia
Public works programs
India
Does it work? (1) Source: all graphs based on data from ASPIRE, World Bank 2016
Does it work? (2)
In countries with existing social assistance schemes:
Large shares of the poor are still excluded in many countries
In several countries, a higher share of the transfers is received by
non-poor
Average transfer is too little to have a noticeable impact on poverty

Large exclusion errors (horizontal dimension)

Poverty gap remains substantial (vertical dimension)

3 countries with no sizeable social assistance scheme

(Cambodia, Myanmar, Laos)
 Closing the gap how much will it cost?
Estimated costs of closing the income/SDG gap as % of GDP
Closing SDG related gap
Lower scenario:
Closing the income gap* in 2030**
Close the national poverty
at $1.90 at $3.10 lower upper
gap
Azerbaijan 0.0 0.0
Not realistic due to
Cambodia 0.2 3.6 0.6 7.8
underlying assumptions of
China 0.1 0.6 perfect targeting
India 0.5 3.9 Upper scenario:
Indonesia 0.1 1.4 0.1 3.4 Universal coverage of
Kazakhstan 0.0 0.0 children and elderly and
Lao PDR 1.2 6.0 0.8 4.6 minimum employment
Malaysia 0.0 0.0 0.1 6.0 guarantee for unemployed
Mongolia 0.0 0.1 0.2 5.4
working-age adults
Myanmar 2.1 8.4 Exceeds financial
Nepal 0.6 5.7 1.5 11.2
resources of some
Philippines 0.3 2.2 0.2 3.9
Sri Lanka 0.0 0.5 0.0 2.2
countries
Thailand 0.0 0.0 0.4 4.9 Consider as future
Timor-Leste 2.0 12.7 5.2 12.7 benchmark
Vietnam 0.1 0.8 0.6 6.6
*based on international poverty lines in 2011 PPP; **only the social protection gap;
indicates necessary expenditures in 2030.
Source: Income gap: Bierbaum et al. (2016); SDG related gap: Cichon (forthcoming).
Closing the gap
Given that current social assistance policies underperform
in most countries, simply allocating more money will not
solve the problem!
Need to start from a countrys status quo
Analyze current portfolio
Identify well-performing programs which can be expanded or
reformed
Basic income security for the elderly
Most promising policy context
Elderly are politically sexy; perceived as deserving
Subsidiarity principle
Social pensions can replace/complement contributory pension
Social pension design is flexible
Tailored to needs and resources of a country, adjusted over time
Challenges:
Sustainability in light of demographic changes

Source: ILO 2014 Source: UNDESA 2015

Basic income security for children
Demographic dividend may work against universal
protection of children
Universal child grants often seen as unaffordable in light of budget
constraints
Shortsighted view given the benefits of investing in children and the
future returns
Options:
Sequenced introduction:
Youngest children are often the most vulnerable and deprivation at
young age has detrimental consequences for later in life
Example: Thailand (pilot)
Combine universal and targeted child grants:
universal in the first years of life, targeted from a certain age onwards
Example: Kazakhstan
Basic income security for working age adults
Most difficult and controversial policy discussion
Concerns of work disincentives and welfare dependency
Employment-guarantee programs have potential
Middle-income countries subject to macroeconomic shock
Low-income countries exposed to weather and seasonal shocks
Post-conflict countries, fragile countries or countries affected by
natural disaster
Drawbacks:
Potential exclusion error due to nature of work
Prospects of moving to regular work often limited
PSNP Ethiopia could serve as example
Public works program supplemented with cash transfers and
livelihood support
Way forward with social assistance
Main policy issues: coverage and adequacy
Gradually extend eligibility criteria of existing schemes
Include groups currently not covered (e.g. certain age groups, urban
poor)
Lower/increase eligibility age
Raise eligibility thresholds of means-tested schemes
Introduce social assistance programs in Cambodia, Myanmar,
Laos
Implement national strategies (Cambodia, Myanmar)
Start with the youngest children
Increase benefit levels

Policy dilemma: extend horizontal dimension versus

strengthening the vertical dimension
Lower versus upper scenario
Lower scenario:
Bundling all existing social assistance programs into one single
poverty-targeted program, where transfer covers family gap up to
national poverty line
Challenge: perfect poverty-targeting does not exist!
Keep existing categorical/universal transfers, but include in family
assessment
Challenge: same as above
Upper scenario:
True spirit of SPF
Build on existing schemes and gradually extend eligibility and
transfer levels
Reform existing programs: policy consolidation towards
comprehensive social protection systems; align with social
insurance, employment and health policies
RECOMMENDATIONS
Universal or categorical allocation of cash transfers are the preferred
solution.
Alternatively:
Smart targeting, whereby wealthy households are excluded
Sequenced inclusion of additional (age-)groups over time
Raising eligibility thresholds of poverty-targeted to reduce exclusion errors
Consolidation of existing social assistance programs and subsidies
Use of social registries
Strengthen social insurance schemes and align eligibility rules and benefit
levels
Improve the collection of accurate and comparable data on poverty
and social assistance across countries

ADBADBI Learning Program on Financing Social Protection for Sustainable Development Goals
15-16 February 2017, Seoul, Republic of Korea