Social Protection Is a Necessity, Not a Privilege

10 December 2010

The Great Recession highlights deficiencies in social protection systems that should be in place to promote broad-based economic growth.

This report was published by the Center for American Progress during JustJobs Network’s incubation there.

The Great Recession, like past crises, highlights deficiencies in the social protection systems that are, or should be, in place to promote broad-based economic growth and to help citizens cope with economic hardship. Strengthening or sometimes setting up these social protection systems is now more important than ever.

Public spending serves an important function in pursuing economic growth objectives while ensuring that the gains are widely distributed to promote broad-based increases in living standards. Effective government social protection systems have a critical role to play in ensuring the well-being of its citizens.

Sustained, broad-based economic growth continues to elude several developed and developing economies alike, even as the global recession is slowly receding. New policies for fiscal consolidation threaten existing social systems, let alone support new ones. But it is imperative that the world’s leaders move beyond rhetoric to action. The G20 leadership must ensure that:

  • All national governments make social protection systems a priority.
  • All donors should provide technical and financial assistance to help the developing world establish these social protection institutions.
  • All multilateral development institutions such as the International Labor Organization, the World Bank, and regional multilateral development banks coordinate their efforts to achieve maximum and lasting impact in the establishment of these social protection systems.

Social protection systems are fundamental to stabilizing and rebalancing national economies as well as the global economy in the wake of the economic crises. These systems facilitate economic and social adjustments to smooth out the ups and downs of business cycles and provide a means of ensuring that the benefits of growth are widely distributed to achieve rising living standards. Widely enacted social protection systems can raise living standards in countries around the world, contribute to stimulating economic growth during downturns, and expand the global middle class to fuel and rebalance global consumption. Social protection systems help to reduce poverty, inequality, and exclusion, and thus strengthen the social contract between national governments and society, reinforcing social cohesion and global stability.

This policy brief highlights the benefits and indeed the necessity of social protection. It is a call to the international community and national governments to keep the focus on establishing adequate, effective, and efficient social protection systems for countries around the world. It makes the economic case for enacting worldwide social protection systems and then presents some specific policy recommendations to achieve this critical goal.