A Social Protection Focus for MDGs 2.0?

The MDGs took shape during the 1990s. At that time a number of UN conferences were held on various issues related to development. The UN conference methodology aims at dealing with global challenges that lack political structures and political backing in member countries. The MDGs were very much part of such a norm-setting process. A leading theme was to stop the continued fall of aid volumes from OECD countries. One way of doing this was to make results from aid more visible, through the quantification of outcomes. Another was to strengthen the mutual responsibilities between donors and receivers. In this, the UN conference on Finance for Development in Monterrey 2002 was very much part of the deal.

The MDGs can be seen as both operational and “aspirational”, i.e. normative goals to strive towards mainly at a general, international level. Their operational character implies that the goals also form part of a strategy, aiming at tangible and measurable results at national levels.

The MDG deal served the purpose of mobilizing more ODA, at least to some extent. Commitments and disbursements went up when the deal was struck (even though part of it was debt write-offs with had only indirect development effects in the form of opening up for new credit and investment opportunities).  The MDG process also served the purpose of mobilizing people in the Western world to campaign for the eradication of poverty.

However, it is less obvious how effective the MDGs have been in reducing poverty. This should not come as any big surprise, since it is extremely difficult – if not impossible – to steer with goals in political settings. In addition, goals formulated at the international level can only be successful at national levels if they are fully integrated into national policies, which they seldom were. Instead, the main driver of poverty reductions during the last decade has been the rapid economic growth in mainly China, India and Indonesia. This growth increased demand for energy and raw materials, which created positive spin-off effects in Sub-Saharan Africa and elsewhere. If this growth takes a different trajectory in the future, for instance due to demographic factors in China and India, global poverty reduction would be affected.

The ongoing discussion of a new set of international goals after 2015 has raised some key issues:

• Should the goals go beyond demands for increased social sector spending, and focus on productivity and employment – in order to treat causes rather than symptoms?
• Should the goals be set for the national rather than the international level –and focus on a more limited number of the poorest countries?
• Should the goals include empowerment, human rights and voice – because development without democracy and citizen participation is not a worthy development?
• Should the goals address rising inequalities – in order to reach the remaining half of the world’s poor and the chronically poor where usual methods are inefficient?

Another key issue is whether MDG-type of goals as such are outdated. The global development landscape has changed since the 1990s, and it is still under rapid transformation. Several low-income countries are turning middle-income. It is now estimated that some 75 percent of the worlds’ poor live in middle income countries. Some of these – China and India in particular – are rapidly emerging world powers, to which OECD countries would be less willing to give aid.

Further, the development debate and interventions have shifted from dealing with drivers of development to a focus on the limits and negative consequences of growth; climate change effects, crises of various sorts, failing states and security issues are increasingly in focus. The role of aid is gradually becoming more complementary when dealing with such global challenges.

Moreover, the aid atmosphere has changed; substantial cuts in aid can be expected when the bills for the financial crisis rescue plans shall be paid in OECD countries; insights about the impossibility of steering with goals, in particular at a global level, are beginning to sink in; the emergence of a host of new donors have started to shake up the traditional aid architecture.

So what kind of international opinion is possible to form regarding poverty issues from now until 2015? Could a coalition between OECD countries and emerging economies be formed around strategies for doing something about poverty in the 39 remaining low-income countries? Probably not, since the new “donors” would be reluctant to gang up with the old ones and thereby risking the advantages they have gained in relations to many poor – but resource rich – countries by behaving in ways that differ from traditional donor behaviour.

Should ambitions instead be lowered and a truly normative process be promoted, separated from the operational side of aid relationships? Based on an updated global poverty map – with much poverty residing in the domestic states and provinces of India and China – aspiration goals could perhaps be agreed upon, without being operationalised and quantified. If so, an unhappy marriage of international normative goals and global operational strategies seeking results on national levels could finally be broken up.

Normative, aspirational goals could be formulated for the national level. And, if the ambition still is high, operational goals could be saved for the international level. But what would then a commonly shared message look like? It needs to be easily understood and encountered. Even the MDGs have been criticized of being too complex for a broader audience.

One candidate for global rallying could be “social protection”. What many leading economists point to as a new reality are the manifold crises that we have to expect in the future – financial, climatic, political or other. We cannot know for sure what character the next crisis will have, nor where or when it will hit or how long its duration will be. The only thing we can be sure of is that crises will come. In such a brave new world, we have to prepare ourselves. Developing safeguards in advance that can meet a number of different crises would be the wisest strategy.

Social protection may be undertaken both at national and international levels.

Given what we know about social protection, the spread of broad and general social protection systems with a leaning towards universalism would be the best road to follow at national level. Systems targeted at the poor are more piecemeal, expensive in relation to their effects, and without the important spinoff effects that more general systems have. Generalized systems are actually feasible and affordable also in developing countries – even if this is a contested claim. Such systems are currently under construction in a number of developing countries. They could be further helped by an encouraging international community. Aspirational goals about the spread of such generalised systems may be agreed upon.

At international level, goals can be made operational. For instance, Ravi Kanbur has proposed the formation of a Social Protection Assessment Program (SPAP). This would work as an assessment tool, linked to a pre-financed facility that would kick in once certain predetermined crisis thresholds are crossed. If social protection goals are directly linked to such mechanisms, they become more realistic.

If properly shaped, social protection systems will not only protect individuals and human capital, they may also help promote economic growth as well as improved institutions. Such systems may be a prerequisite for reaching a number of today´s MDGs, and with a single tool. What we need is a debate that is slightly less ideological and slightly more based on evidence.

International development targets have always been about shaping norms and attitudes. It will continue to be so. To argue for protection, insurance and security in today’s climate of crises seems highly relevant.