Social protection

Types of social protection

This page provides resources on four of the most common types of social protection:

Social assistance – resources, either cash or in-kind, are transferred to vulnerable individuals or households. These transfers can be unconditional (for example, social pensions or cash benefits) or conditional (given in exchange for work on public works programmes or attendance at school, for instance).
Social insurance – the beneficiary makes contributions to a scheme to mitigate risk, such as health insurance or unemployment insurance schemes.
Labour market interventions – programmes designed to protect workers, such as minimum wage legislation.
Community-based or ‘informal’ social protection – mechanisms by which social safety nets and coping strategies are provided and sustained at community-level.

Social assistance

Social protection programmes are described as ‘social assistance’ when resources, either cash or in-kind (e.g. food transfers) are transferred to vulnerable individuals or households. Social assistance mechanisms have been used for many years in industrialised countries, and are now employed effectively in developing country contexts. Such programmes take many forms. This section of the guide covers cash transfers, social pensions, public works programmes, and in-kind transfers.

Howell, F., 2001, 'Social Assistance - Theoretical Background', in 'Social Protection in the Asia and Pacific', ed. I. Ortiz, Asian Development Bank, Manila, ch. 7
What is social assistance and how should such programmes be designed? This chapter defines social assistance as government and non-governmental action to transfer resources to people whose vulnerability warrants some form of entitlement. Social assistance should be seen as a means to reduce poverty and to develop the capabilities of the most vulnerable, increasing social and economic participation and equality of opportunity. Programme design needs to balance the goals of: a) preventing shocks which will have a negative impact on the poor; b) reducing the impact of shocks; and c) helping vulnerable groups to cope with shocks.
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Cash transfers

There is a wealth of literature on the impact of cash transfers and the various programming options available. Although cash transfers are not a panacea, they have been demonstrably effective and are seen as a viable mechanism in both developmental and humanitarian contexts. Conditional Cash Transfer (CCTs), implemented in Latin America with great success, are seen to be a way of mitigating the risk of cash transfers being misused. CCTs yield rapid, positive impacts (poverty alleviation, improved health and education outcomes) and break the ‘vicious cycle’ of intergenerational poverty in the long-term. However, CCTs are criticised for having high administrative, monitoring and enforcement costs, being too reliant on targeting, having a disempowering effect on recipients and negatively affecting overall levels of consumption amongst both beneficiaries and non-beneficiaries.

Experience indicates that in the case of CCTs, adequate needs assessments are crucial, and that integrating CCT interventions into wider social policies bring huge gains. In general, there is the need to convince national governments that cash transfers are social ‘investments’ rather than free handouts. The ‘externality effect’ – the impact of CCTs on non beneficiary households – also needs to be measured and assessed more stringently.

Slater, R. et al, 2008, ‘A Conceptual Framework for Understanding the Role of Cash Transfers in Social Protection’, ODI Project Briefing, Overseas Development Institute, London
This note presents a conceptual framework outlining how cash transfers can promote and protect livelihoods in both development and humanitarian relief settings. The framework encompasses three spheres and the intersections between them: (1) institutions, politics and governance; (2) capacity and implementation; and (3) local economic and social impacts. Issues common to all three spheres include political context and acceptability, targeting and instrument choice, and beneficiaries' voice.
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Fiszbien, A., and Schady, N., 2009, ‘Conditional Cash Transfers: Reducing Present and Future Poverty’, Policy Research Report, World Bank, Washington D.C.
Do conditional cash transfer programmes (CCTs) succeed in reducing inequality? Are they effective in producing better development outcomes in the countries where they have been implemented? This report argues that CCTs have been an effective way to redistribute income to the poor, while recognising that even the best-designed and best-managed programme cannot fulfil all of the needs of a comprehensive social protection system. Evidence from existing programmes suggests that to maximise their potential impact, CCTs should be complemented with other interventions, particularly those that focus on outcomes rather than on promoting the use of services alone.
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Holmes, R. and Slater, R., 2007, ‘Conditional Cash Transfers: What Implications for Equality and Social Cohesion? The Experience of Oportunidades in Mexico’, Overseas Development Institute, London
The Oportunidades programme aims to increase the human capabilities of poor households and break the intergenerational cycle of poverty. Oportunidades helps five million families to enhance their well-being through cash transfers to mothers and increased access to education, health and nutrition. The programme has increased both access to and equality of access to public services, but improved service quality may be needed. In order for the Oportunidades model to be transferable, there must be: (1) strong political commitment to the programme; (2) a high level of institutional capacity in terms of the number and skills of staff; and (3) a supply of accessible health and education services.
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For further information on the impact of conditional and unconditional cash transfers, see:
GSDRC, 2007, ‘The Impact of Cash Transfers’, GSDRC Helpdesk Research Report, Birmingham
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Cash transfers: Programme examples and lessons learned

Hilou, D., and Soares, F. V., 2008, ‘Cash Transfers: Lessons from Africa and Latin America’, Poverty in Focus Report No.15, International Poverty Centre, New York
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Soares, S., 2007, ‘Conditional Cash Transfers in Brazil, Chile and Mexico: Implications for Inequality’, Working Paper No.35, International Poverty Centre, New York
What impact do conditional cash transfers (CCTs) have on inequality? This paper investigates the effects of CCTs in Brazil, Mexico and Chile. CCT programmes helped reduce inequality in all three countries between the mid-1990s and mid-2000s. They are a low-cost way of reducing inequality that can be replicated. However, the total amount transferred by these programmes is modest, and their expansion is limited by political, administrative and budget constraints.
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Devereux, S. et al, 2005, ‘Making Cash Count: Lessons from Cash Transfer Schemes in East and Southern Africa for Supporting the Most Vulnerable Children and Households’, Institute of Development Studies, University of Sussex, Brighton
To what extent have unconditional cash transfers been used in East and Southern Africa, and what can be learnt from these schemes? This report was commissioned by the United Nations Children’s Fund as part of a review of social protection measures reaching vulnerable children. It summarises findings from a survey across 15 countries, and from case studies in four countries, drawing out lessons learned with a particular focus on reaching the most vulnerable children (MVC).
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Schubert, B., and Huijbregts, M., 2006, ‘The Malawi Social Cash Transfer Pilot Scheme: Preliminary Lessons Learned’, UNICEF, New York
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Cash transfers in emergencies

Cash transfers have been found to be particularly effective in emergencies, offering a protective mechanism which can be administered relatively easily in a short time-frame, with immediate impact. They also offer an opportunity for testing innovative ways of delivering transfers in difficult environments where ‘normal’ systems have been disrupted, for instance through the use of mobile phones in Kenya.

Mvula, P. M., 2007, ‘The Dowa Emergency Cash Transfer Project: A Study of the Social Impacts’, Regional Hunger and Vulnerability Programme, Johannesburg.
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Datta, D., Ejakait, A., with Scriven, K., 2009, ‘Cash Transfers Through Mobile Phones: An Innovative Emergency Response in Kenya’, ALNAP Innovations Case Study 1, ALNAP, London
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Social Pensions

Social pensions are non-contributory pensions, a form of cash transfers targeted by age. Research shows that they have a strong poverty reducing potential as the cash benefits tend to be shared within households. In general the literature suggests that social pensions have been employed particularly successfully in southern African contexts.

Devereux, S., Ellis, F., and White, P., 2008, ‘Social Pensions’, REBA Thematic Brief, Regional Hunger and Vulnerability Programme, Johannesburg
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Palacios, R., and Sluchynsky, O., 2006, 'Social Pensions Part 1: Their role in the Overall Pension System', Social Protection Discussion Paper No. 0601, World Bank, Washington
Are social pension schemes (SP) an effective way of alleviating poverty among the elderly in developing and transition countries? What issues need to be considered in formulating pension policy in developing countries? This study for the World Bank reviews the global experience with social pensions, finding that coverage and cost of schemes varies widely. Policy formulation needs to take country specific contexts, extent of coverage, and the relative poverty status of the elderly. More research is needed on fiscal trade-offs, incentives, and comparative analyses of SP versus direct social expenditure.
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Public works programmes

Public works programmes are a form of conditional transfer whereby cash or food is given in return for work on public infrastructure projects, such as road building. They can be employed as both short and long-term measures, and there has been a recent resurgence of interest in such programmes as a consequence of the food and financial crisis. Public works programmes are popular with donors as they are seen to create assets, produce jobs and be self-targeting (unattractive to the non-poor as such low wages or rations are paid). However, it is also argued that such schemes create as much dependency on the state as cash transfers, prevent the poor from engaging in their normal cash-generating activities, and are not always well-targeted. Although only tentative conclusions can be offered thus far the available evidence indicates that whilst short-term public works programming can promote consumption smoothing during labour market disruptions, their long-term social protection function is likely to be limited unless guaranteed employment is introduced.

McCord, A., and Farrington, J., 2008, ‘Digging Holes and Filling Them in Again? How Far do Public Works Enhance Livelihoods?’, Natural Resource Perspectives No.120, Overseas Development Institute (ODI), London
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Subbarao, K., 2003, ‘Systemic Shocks and Social Protection: Role and Effectiveness of Public Works Programs’, Social Protection Discussion Paper Series no. 0302, World Bank, Washington
Public works (workfare) programmes have been important counter-cyclical interventions in both developed and developing countries for many years. This paper from the World Bank discusses the rationale behind such programmes and gives an overview of experiences in a number of countries – many of them in Asia and Africa – focusing on design features and how the programmes were selected and implemented. The paper concludes that the success of each programme depends very much on its design features.
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McCord, A., 2004, ‘Policy Expectations and Programme Reality: The Poverty Reduction and Labour Market Impact of Two Public Works Programmes in South Africa’, ESAU Working Paper No.8, Overseas Development Institute (ODI), London
How effective has South Africa been in reducing poverty and promoting employment through public works programmes (PWPs)? This study explores the contribution of PWPs to social protection in South Africa by examining the Gundo Lashu programme in Limpopo and the Zibambele programme in KwaZulu Natal. It argues that, for reasons of both design and scale, PWPs alone cannot adequately address the social protection gap facing the working-age unemployed. PWPs should be targeted to the poorest and linked to other development initiatives, such as microfinance.
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McCord, A. with Slater, R., 2009, ‘Overview of Public Works Programmes in Sub-Saharan Africa’, Overseas Development Institute, London
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In-kind transfers

In-kind transfers are non-cash resources passed to vulnerable individuals and households, often with the aim of modifying or influencing the behaviour of recipients. There is considerable debate over whether in-kind transfers should be favoured over cash transfers, despite the latter being popular for providing beneficiaries with choice in accordance with needs, as well as providing an opportunity for investment.

In-kind transfers: Food

The debate over food vs. cash transfers dates back to the 1970s, with discussions questioning whether food transfers can be used as an alternative to cash, or whether the two are complimentary. There is debate over whether food transfers are a nutritional or economic intervention, i.e. whether they aim to only ‘feed people’ or aim to support livelihoods. Food transfers are generally thought to be preferable in situations where markets are not functioning and the food/income shortages stem from a lack of supply rather than demand.

Gentilini, U., 2007, ‘Cash and Food Transfers: A Primer’, Occasional Paper No. 18, World Food Programme (EFP), Rome
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Ahmed, A., et al, 2009, ‘Comparing Food and Cash Transfers to the Ultra Poor in Bangladesh’, Research Monograph 163, International Food Policy Research Institute (IFPRI), Washington, D.C.
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Gentilini, U., 2007, ‘Food Transfers and Food Security’, Institute of Development Studies (IDS) Bulletin, vol. 38, no. 3, pp. 82-86
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In-kind transfers: Utility subsidies

Utility subsidies such as housing, electricity and water are designed to remove the burden of utility expenditures. However, there exist concerns that utility subsidies are not well-targeted and often do not reach poor communities living in areas without water and electricity. They are also seen as more costly to implement than other forms of social assistance. Housing subsidies, whilst expensive, run less risk of excluding the most vulnerable.

Katsura, H. and Romanik, C., 2002, ‘Ensuring Access to Essential Services: Demand-Side Housing Subsidies’, Social Protection Discussion Paper no 232, World Bank, Washington
the World Bank examines the strengths and the weaknesses of demand-side subsidy approaches for improving access to housing for poor households. It suggests that different subsidies are appropriate in different situations. Moreover, the design of housing-related subsidy programmes varies in response to philosophical, political and resource considerations.
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Komives, K., et al., 2007, ‘Utility Subsidies as Social Transfers: An Empirical Evaluation of Targeting Performance’, Development Policy Review, Vol. 25, Issue 6, pp. 659-679
Do utility subsidies actually help the poor? This paper argues that the average targeting performance of water and electricity subsidies is similar to that of other social transfer mechanisms using the same targeting method. The most common utility subsidies are consumption-based. These aim to subsidise low-volume users but primarily benefit the non-poor. Many geographically-targeted and most means-tested utility subsidies are progressive, but still exclude many poor households. Connection subsidies are an attractive alternative in low coverage areas, but they will only reach the poor if utilities extend network access to poor households and if households choose to connect.
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In-kind transfers: Health fee waivers

Health service fee waivers and exemptions are part of the debate on user fees, which are adopted formally and informally in a variety of developing countries. Despite often being central to the functioning of state-provided services, user fees face inevitable criticism over limiting equity of access to services. Health service fee waivers redress some of the access problems caused by the introduction of service fees. However, it has been suggested that health service waivers and exemptions will only be effective if they form part of a nationwide policy which is formally monitored and enforced at local and national (formal and informal) levels.

Bitrán, R., and Giedion, U., 2003, ‘Waivers and Exemptions for Health Services in Developing Countries’, Social Protection Discussion Paper Series, No. 308, World Bank, Washington, D.C.
Can a system of user fees in health care be compatible with the goal of preserving equitable access to services? Is the use of waivers the way forward? This study assesses health care systems in Asia and Africa and argues that the key to success is in the design of waiver systems.
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Kivumbi, G., and Kintu, F., 2002, ‘Exemptions from Waivers and Cost-sharing: Ineffective Safety Nets in Decentralized District in Uganda’, Health Policy and Planning, vol. 17, suppl. 1, pp 64-71
Are safety nets such as waivers and exemptions effective in tackling inequalities created by user-payment for health services? This article reports on exemption schemes in two districts of Uganda. It shows that poor and marginalised groups lack fair access to health care and not much has been done to address this. These safety nets will only be effective if they: are backed by national health financing policy; reconcile competing revenue demands of local government; and are strictly enforced and supervised by local and central governments.
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Social insurance

Social insurance schemes are contributory programmes in which beneficiaries make regular financial contributions in order to join a scheme that will reduce risk in the event of a shock. Because health costs can be very high, health insurance schemes are a popular way of mitigating risk from illness. However, some people argue that they are too expensive for the poor and should be complemented with social assistance. Other types of social insurance schemes include contributory pensions, unemployment insurance, funeral assistance and disaster insurance. Social insurance is strongly linked to the formalised labour market, meaning that coverage is determined by number of formal workers in a country. The informal labour market therefore presents a strong challenge to the success of social insurance programmes.

Ranson, M., 2002, ‘Reduction of Catastrophic Health Care Expenditures by a Community-Based Health Insurance Scheme in Gujarat, India: Current Experiences and Challenges’, Bulletin of the World Health Organisation, vol. 80, no. 8
Spending on medical care can be a major financial burden on poor people in developing countries. Can community-based health insurance schemes reduce health care costs for the poor? This study published by the World Health Organisation investigates the impact of a community-based medical insurance scheme in Gujarat, India on the use of health care and the financial burden of medical expenses. Such community-based health insurance schemes can protect poor households from the uncertain risks of medical expenses.
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Mesa-Lago, C., 2008, ‘Social Insurance (Pensions and Health), Labour Markets and Coverage in Latin America’, Social Policy and Development Programme Paper No. 36, World Bank, Washington, D.C.
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Labour market interventions

Labour market interventions provide protection for poor people who are able to work. Interventions can be both active and passive: active programmes include training and skills development and employment counselling, whilst passive interventions include unemployment insurance, income support and changes to labour legislation, for example in establishing a minimum wage or safe working conditions.

DFID, 2004, ‘Labour Standards and Poverty Reduction’, UK Department for International Development, London
How can labour standards contribute to poverty reduction? This paper focuses on the nature and impact of labour standards in developing countries. Effective and well-judged implementation of labour standards can play an important role in reducing global poverty and achieving the Millennium Development Goals (MDGs). A commitment to core labour standards is part of a broader rights-based approach to poverty reduction.
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Betcherman, G., Olivas, K. and Dar, A., 2004, ‘Impacts of Active Labor Market Programs: New Evidence from Evaluations with Particular Attention to Developing and Transition Countries’, Social Protection Discussion Paper Series no. 0402, World Bank, Washington
What is the impact of active labour market programmes (ALMPs) on reducing the risk of unemployment and increasing the earning capacity of workers in developing and transition countries? This report claims that ALMPs generally have a positive impact on the employment prospects of participants, although there are mixed results in many cases. Successful interventions require a comprehensive package of services and carefully targeted programmes that are oriented towards labour demand and linked to real workplaces.
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Labour market interventions for informal workers

One of the challenges in implementing successful labour market interventions is how to incorporate the informal economy, which comprises a significant portion of the workforce in developing countries.

Lund, F., 2009, ‘Social Protection and the Informal Economy: Linkages and Good Practices for Poverty Reduction and Empowerment’, in Organisation for Economic Cooperation and Development (OECD), ‘Promoting Pro-Poor Growth: Social Protection’, OECD, Paris, pp.69-88
How can social protection in developing countries empower people to create employment-related ways out of poverty? This paper examines empowerment in the context of social protection for informal workers. It argues that social protection can help to improve the health and well-being of informal sector workers, especially poorer women, and build their capacity to organise and demand better working conditions. Interventions must consider the sector's diversity, its permanence, and the limited choices that drive people to work in it.
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Barrientos, A., and Barrientos, S.W., 2002, ‘Extending Social Protection to Informal Workers in the Horticulture Value Chain’, Social Protection Discussion Paper Series No. 0216, World Bank, Washington, D.C.
How can social protection mechanisms address the increasing informalisation of work in the global economy? How can the contribution of all potential stakeholders be harnessed to increase support for informal workers? This paper uses a value chain approach and a social responsibility matrix to examine fruit exports from Chile and South Africa to the United Kingdom. It finds that horticultural workers are largely excluded from existing coverage or benefits, which favour those in more stable employment with stronger attachment to an individual employer. Community-based provision, linked to state and market provision, is one avenue through which social protection could be developed.
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Community-based social protection

Formal social protection systems do not offer complete coverage and inevitably exclude parts of a population. A variety of traditional or ‘informal’ ways of providing social protection within households, groups and networks fill some of the gaps left by formal social protection interventions and distribute risk within a community. Community-based mechanisms for providing social protection are becoming more popular as a research topic, with increasing calls for ‘traditional’ or informal social protection mechanisms to be carefully considered within programme design, and correspondingly supported.

There is also considerable interest in the potential for community-based mechanisms to be scaled up in order to undertake wider development activities, and in how to create links between social security schemes and community-based approaches with the aim of extending coverage to meet the challenge of providing adequate health services to the developing world.

De Coninck, J., and Drani, E., 2009, ‘Social Protection is Centuries Old! Culture and Social Protection for the Very Poor in Uganda: Evidence and Policy Implications’, Working Paper No. 140, Chronic Poverty Research Centre, Manchester
Millions of Ugandans in chronic poverty are likely to continue being by-passed by the opportunities that economic growth offers, mostly to the 'active poor'. Development actors are therefore increasingly turning their attention to social protection. Viewing social protection as a transformative intervention that extends to the causes of extreme poverty, this paper argues that social protection initiatives borrow much from elsewhere, neglecting the local cultural context, and failing to build on existing indigenous protection mechanisms that could be strengthened.
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du Toit, A. and Neves, D., 2009, ‘Informal Social Protection in Post-Apartheid Migration Networks: Vulnerability, Social Networks and Reciprocal Exchange in the Eastern and Western Cape, South Africa’, BWPI Working Paper 74, Brooks World Poverty Institute, Manchester
What systems of informal social protection exist amongst poor and marginalised African households in Khayelitsha, Cape Town, and in the rural Eastern Cape? This paper considers the dynamics of informal social protection in post-apartheid migrant networks. It argues that in poor and marginalised households in South Africa, the indirect impacts of social grants cannot be adequately understood by focusing on individual or household decision making. Elaborate and extensive networks of reciprocal exchange link rural and urban households, allowing costs and resources, opportunities and shocks to be shared and redistributed. However, these networks’ entrenched power relations may reinforce the exclusion and vulnerability of some individuals. Additional formal social protection is therefore needed.
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Coheur, A. et al, 2008, ‘Linkages between Statutory Social Security Schemes and Community-Based Social Protection: A Promising New Approach’, International Social Security Association, Geneva
How can policymakers meet the urgent need to extend social protection coverage? This paper discusses research findings on innovative integrated strategies to extend social health protection by linking statutory social security and informal or community-based social protection schemes. It develops a typology of links that could strengthen schemes in the areas of finance, administration, governance, service delivery and policy planning, exploring the actual and potential impact of such links. Continuing to develop parallel mechanisms for extending coverage risks competition and duplication, but linking the different systems could fruitfully address these problems.
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Habtom, G. M. K., and Ruys, P., 2006, ‘Traditional Risk-sharing Arrangements and Informal Social Insurance in Eritrea’, Health Policy, vol. 80, no. 1, pp. 218-235
In the absence of formal safety nets, can Eritrea's traditional system of voluntary mutual aid community associations ('Mahber') be extended to cover unexpected health costs and other related costs? This study examines the role of kinship networks and Mahber, and assesses the potential of Mahber-based health insurance schemes for the informal sector and rural poor. It finds that where the state no longer provides free public health services and access to private insurance is denied, Mahber-based health insurance is a viable way of providing modern health services.
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