Sunday, February 3, 2013

Understanding inclusive growth: Stronger social protection

Inclusive growth is one of the most talked about issues in developing countries, especially those in transition, these days. It has been pretty much widely accepted that growth alone is not sufficient; it has to be followed by wider access to economic opportunities and provision of social protection for those left out of the growth process.

ADB has come up with a framework for inclusive growth, which has three main components:  (i) High and sustainable growth; (ii) Access to economic and social development opportunities; and (iii) Stronger social protection. 

It also has a list of 35 indicators to quantify (either directly or via proxies) inclusive growth. This follow up to an earlier blog post sheds some light on the third pillar of inclusive growth, i.e. stronger social protection.

It focuses on stronger social protection to prevent extreme deprivation and reduce the effects of shocks. It components include strengthened:

    • Labor market policies and programs
    • Social insurance programs
    • Social assistance and welfare schemes
    • Child protection programs
    • Disaster management
    • Public sector management

The table below shows the quantifiable indicators for the third pillar of inclusive growth.The information and data in this blog come from ADB’s FIGI 2012 and the related dataset (Nepal only; for other countries, see this one).

Social protection 1990 or Nearest Year 2010 or Latest Year
Social protection and labor rating 3.0 (2005) 4.0 (2011)
Social security expenditure on health as a percentage of government expenditure on health 3.6 (2001) 4.6 (2009)
Government expenditure on social security and welfare as a percentage of total government expenditure 3.1 (1995) 3.2 (2011)

In the social protection and labor component, a rating of “1” corresponds to a very weak performance, and a “6” rating to a very strong performance.