UN International Forum on the Eradication of Poverty

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UN International Forum on the Eradication of
Poverty

• Poverty, Social Security and Human Rights
  Lessons from OECD Experience
  
• Peter Townsend
• London School of Economics

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Population Living Below 1.08 per day and 1.50
per day at 1993 PPP in 2001
Source Kakwani and Son, 2006, Table 2. They
reproduced World Bank estimates based on 1.08
per person per day, and then calculated estimates
if the poverty line had been 1.50 per person
per day, ie the median of the poverty lines of 19
low-income countries in Africa and Asia in the
1990s.
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Table 2 Percentage of population no longer in
poverty post-social compared with pre-social t
ransfers, by country and welfare regime (1999)

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Lessons of Substantial Commitment to Social
Security on the Part of All OECD Countries

• 1. In the last half century all OECD countries,
  of every welfare regime complexion, have doubled,
  or more than doubled, their annual expenditure on
  social security.
• 2. This has applied particularly to universal and
  group benefit schemes, and not so much to safety
  net or social assistance schemes.
  
• 3. High social security spending countries have
  not, by and large, experienced lower than average
  economic growth. On the contrary, indicators of
  high economic and social performance are found to
  correspond (See, for example, Goodin, Heady,
  Muffels and Dirvan, 1999, who find that The
  Netherlands outstripped Germany, and both
  countries outstripped the US).
• 4. The most innovative and effective OECD schemes
  historically have simultaneously involved
  benefits as well as contributory obligations for
  the participants.

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Table 3a Total Public Social Expenditure, and
Total Public Social Security Expenditure (includ
ed), as GDP countries ranked highest-lowest fo
r 2001
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Table 3b continued
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Table 3c Trends in Total Public Social
Expenditure, and Total Public Social Security Ex
penditure (included), as GDP

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Table 3d Trends in Total Public Social
Expenditure, and Total Public Social Security Ex
penditure (included), as GDP

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Table 4 Total public social security expenditure
as GDP in selected high-, middling- and low-sp
ending countries

Source For low-spending countries data adapted
from ILO (2001), Social Security A New
Consensus, Geneva, ILO, Statistical Annex. The d
ata for the low-income countries apply to 1996
(1995-China) and exclude health care (then count
ed in social security expenditure).
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In January 1954 President Eisenhower strongly
praised the social insurance system in the US
developed from needs arising from the
complexities of our modern society. The system
is not intended as a substitute for private
savings, pension plans, and insurance protection.
It is, rather, intended as the foundation upon
which these other forms of protection can be
soundly built. Thus, the individuals own work,
his planning and his thrift will bring him a
higher standard of living upon his retirement, or
his family a higher standard of living in the
event of his death, than would otherwise be the
case. Hence the system both encourages thrift and
self-reliance, and helps to prevent destitution
in our national life. Quoted by Christgau V.
Old Age and Survivors Insurance after 20 Years,
in Haber W. and Cohen W.J., eds., (1960), Social
Security Programmes, Problems and Policies,
Illinois, Irwin, p. 168.
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The Chairman of the first Advisory Council on
Social Security in the late 1930s explained that
the US system of political economy had to shift,
so far as the worker was concerned, to a system
of benefits payable as a matter of right
(J.Douglas Brown, Haber W. and Cohen W.J., eds.,
(1960), Social Security Programmes, Problems
and Policies, Illinois, Irwin, 4).
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Trends in the Funding of Social Security
(1980-1996)
Source Ministry of Social Affairs and Health,
1999, p. 213 and Eurostat, 1999
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• Two broad sets of recommendations
• Turning research into action. First, to identify
  more exactly the social insurance and group
  tax-financed schemes in the OECD countries that
  have worked best in relation to their economic
  and social development. This will show how key
  principles and mechanisms might be applied by
  stages to the emerging institutions of developing
  countries. Second, if a scheme for tax
  contributions from the industrialised countries
  and/or corporations can also be worked out and
  agreed, poverty will be reduced much more
  quickly. Third, the developing countries can, at
  the same time, review how their own schemes for
  social protection can be most quickly extended
  and linked with the best models of OECD system
  development.

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2) Universal coverage. To extend agreements by
governments to give greatest weight to universal
contributory social insurance and tax-
financed group benefits in constructing social
security systems to defeat poverty. Contribution
-based social insurance depends on
revenue willingly provided from wages by
employers and employees to earn entitlement to i
ndividual and family benefits in adversity,
including unemployment, sickness, disability,
bereavement and retirement benefits. Tax-finance
d group schemes will be crucial for
some groups unable to work, such as children, the
severely disabled and the advanced elderly. Tran
s National Companies should play their
part on behalf of sub-contracted labour in
countries with which they trade. Similarly, Gove
rnments trading extensively with low-income
countries must accept greater responsibility for
the establishment and growth of social security
in those countries.