Module 1

Session 1

What is Social Policy?

- Study of human well being
- Study of the social relations necessary for human well being and the systems by which
wellbeing may be promoted
- Wellbeing is about how well people are, not how well they do - healthcare, education can
be arranged by govt bodies through business, social groups, charities etc

Social Welfare Policy

- Social - of or having to do with human beings living together as a group in a situation
requiring that they have dealings with one another
- Welfare- particular programs and the condition or well-being of society.
- Welfare- the state of being or doing well; the condition of health, prosperity, happiness
and well-being.
- A welfare state exists in those societies that make the well being of people the
responsibility of the govt.
- Social welfare policy refers to principles, activities or frameworks for action adopted by a
government to ensure a social defined level of well-being
- Social welfare programs benefit the affluent as well as the poor
- Social welfare policy appears in social welfare programs - benefits and services- used by
people to address their basic human needs.
- A public response to problems that society is ready to address, a societal institution
composed of government - funded programs and services targeted to some definition of
basic needs, and a strategy of action that guides govt intervention in the area of social
welfare provision

Broadening the Definition of Social Welfare Policy

- Public and Private: A Blurred Boundary
● many social workers are employed privately in voluntary and proprietary agencies
Purchase of Services
● Public and private sectors were separate until an act permitted state to use public funds
to purchase services delivered by private agencies
Reimbursement
● Govt funds private agencies through reimbursement - public assistance grants are used
to pay private agencies for services they provide to clients who qualify for these benefits.
● Federal rent subsidies for the poor are paid to private landlords, food stamps pay for
food bought from local grocers
Fiscal Welfare
● Provides financial benefits to individuals and corporations through tax exemptions,
deductions and credits.
● Uncollected tax dollars are known in budget parlance as tax expenditures bcs the lost
revenues leave the treasury with the same dollar shortfall as does direct spending.
 ● Tax expenditures involving billions of dollars address the same needs that are met
through direct govt spending.
● It extends far beyond the poor, leading some to conclude that “everyone is on welfare”.
Same Policy Goals
● At times congress allocates more money to the needs of the middle-and upper class
families that to similar needs of the poor - housing differential
Corporate Welfare
● “Everyone is on welfare” extends to business and industry.
● Deductions like employee’s health insurance lower labor costs by reducing the tax bill of
the employers.
● It subsidizes the individual employees because the value of the health insurance
benefits is not taxed, but an equivalent cash payment (as wage) would be
● Tax breaks from business increase profits a lot, which is why they are referred to as
“corporate welfare”
● Indirect benefits - nation’s income support programs put cash into people’s hands, it
creates a steady supply of consumers for the goods and services produced by private
enterprise
Competing Functions of Social Welfare Policy
Social
● enhance the functioning and well-being of individuals and families
● The govt had to take a role in creating the conditions that promote individual
development and prevent social problems
● Reason 1: due to geographic mobility, fewer people lived close to their family or
maintained string ties to a religious institution
● Reason 2: The process of industrialization, urbanization, and immigratoon created new
and different types of needs that overwhelmed the caretaking and socializing capacity of
individual families, communities and religious institutions.
● Reason 3: resulting social problems had to be addressed to the extent that they
impaired individual functioning and jeopardized the smooth running of wider society.
● If too many people became illiterate, unhealthy, criminal etc they wont be able to carry
out their socially defined work responsibilities., thus productivity loss and social problem
due to unmet needs would arise.
● Thus, programs to support family functioning were made
● However, conservatives think that social policy’s social functions is an issue of social
control, that punishment works better that rehab. That social policies must contend
deviant behavior.
● Radical and Feminist povs believe that capitalist/patriarchal society, control and
discipline represent social welfare policy’s main social function. By making benefits
conditional on compliance with mainstream values, the govt leaves individuals with no
choice but to conform. Thus, social functions of social welfare policy help to supply
business with obedient workers, male-headed households with compliant wives and the
wider society with citizens who accept mainstream norms. The regulatory features of
social policies are what have actually created all these issues.
Economic
● Provides a minimum level of economic security to help stabilize the economy during
economic downturns, subsidizes the cost to business of sustaining a workforce and
underwrites family maintenance.
● Economic Security
● Ensure a minimum level of economic security to all.
● Labor market does not serve all equally. Some aren’t employed, some can not be
employed. Thus, govt assumed the responsibility for ensuring a minimum standard of
living, below which no one will have to live
● Social policies help protect people from inequalities built into the market economy by
placing a floor under wages, reducing discriminatory barriers, regulating health and
saftey of the workplace and protectng consumers against impure food, drugs and unsafe
highways.
● Automatic Stabilizers
● By putting cash into people’s hands, income support programs help to prime the
economic pump.
● Increased purchasing power provided by the nation’s cash assistance programs helped
to stimulate the production of goods and services, which in turn, created jobs and
reduced unemployment
● Socializing the Cost of Production
● Radicals link economic functions with business profits.
● Stimulating purchasing power- the pool of customers available to buy the goods and
services produced by business and industry is enlarged
● Subsidizing Wages- the financial incentive was designed to encourage employers to hire
disadvantaged workers and then to move them into an unsubsidized job, however,
instead of retaining the worker after subsidized wahe ended, another subsidized worker
was replaced.
● Productivity of the workforce - public spending on health, education and social services
provides employers with the healthy and fit workforce they need at virtually no additional
cost to the business. The public pays the tab but the profits stay in private hands
● Enforces both the work ethic and low wages- the stigma tells that working for any
employer on any terms is better than public aid. By enlarging the supply of people
looking for work, the policy makes it easier for employers to pay low wages and harder
for unions to negotiate good contracts
● Social Reproduction
● Feminist analysis identifies it as another economic function
● Refers to a series of tasks typically assignment to the family including - procreation,
consumption, socialization, caretaking.
● Families need a certain standard of living to successfully carry out their socially
assigned tasks of social reproduction , however because business profits depend on
high prices, high productivity and low labor costs, the market economy fails to yield jobs
and incomes needed by the avg family to reproduce and maintain itself.
Political
● Address the need to reduce social conflict
 ● Most govts try to integrate all elements of the population into a coherent system, thus,
gifts hold elections that give people the opportunity to express their will.
● Social welfare policy helps to reduce interest group conflict by distributing resources
from those with more to those with less.
● Cash assistance programs, civil rights protections and employment and training
schemes create more opportunities to those left behind

The Welfare State

Module 1
Reading 1:

● What is social policy?

● Social policy-> study of human well being and the systems through which it can be
promoted
● Wellbeing here is all about how well the people are doing
● Understanding SP: what are things that you need to make life worth living (healthcare,
education etc) and then thinking about the ways which these can be organized
● Brings in ideas and analytical methods from sociology, pol sci, anthro etc
● Draws upon philosophy
● ; in fact it will go pretty much wherever it needs to find the best way to study issues
relevant to the achievement of human wellbeing
● Hence it is multidisciplinary
● It is also inter disciplinary: combines approaches from different social sciences
● Magpies vs butterfly: student of SP are not like butterflies that flutter from one idea to
another. They are like magpies..they are pragmatic, pick whatever they need from
across social sciences
● Commitment to the cause of human well being
● Understanding what is required to achieve human wellbeing means studying social,
political and economic processes
● Attention to complex details and abstract theories
● Analyse statistical data
● SP referred to as social science
● Social policy->concerned with policy making process
● Social Policy is concerned with hard evidence, technical theories and logical analysis,
but it must also be creative. It often calls for imagination and insight. Social Policy is as
much about feelings as about facts.
● Why should we be concerned about the attainment of human well being?
● Emile Durkhiem: suggest that society is complex, people collaborate to produce life
necessities
● Social policy is a way society recognizes and gives expression to interdependency of its
members
● Titmus: founding father of Social Policy: Welfare sate emerging because of state of
dependency -> arise when majority of population not in position to earn life for
themselves
 ● Industrialized societies: Natural dependency: childhood, old age, child bearing
● Post industrialized: golden age of welfare state:
● . Many of the dependencies we experience are fashioned by social and cultural factors:
for example, by changes in the nature of labour markets and by changing patterns of
household formation.
● preindustrial societies were based on gift giving
● social policies in advanced capitalist societies is same form of gift giving: bilateral market
exchanges, a system of taxes, benefits and public services
● Dependencies are bound up within unequal relations of power and there are ethical
basis
● Caring for: practical business, undertaken by families and by women
● Caring about: can be assigned to public sphere of social policy making

Reading 2.1
● Social Welfare Policy
● Public response to problems that society is ready to address
● Framework for action adopted by government to ensure a socially defined level of
individual family and community well being
● Collective interventions that contribute to the general welfare by assigning claims from
those who earn national income to those who dont
● organized system of laws, programs, and benefits and services which aid individuals
and groups to attain satisfying standards of life
● In the form of social welfare programs, income security, health, education, nutrition etc to
participate in society
● Broad definition: 1. public and pvt provisions
● Social welfare system -> 2. tax codes, 3. connection bw social welfare and 4. other
public policies
● Broadening definition of social welfare policy
● Why is the social policy definition too narrow?
● 1. Public vs private:
● Purchase of service contract, gvt funds private through reimbursements, gvt funded
educational vouchers
● 2. Fiscal welfare: financial benefits, tax exemptions to corporates, deductions, credits
● Spending streams: Gvt spending, tax expenditure -> to accomplish policy objectives
● tax code has been called a fiscal welfare system because tax expenditures involving
billions of dollars (see below) address the same needs that are met through direct
government spending. A key difference is that the fiscal welfare system extends far
beyond the poor, leading some to conclude that “everyone is on welfare.
● Same policy Goals: tax system -> impt instrument of social welfare policy beyond its role
-> tax code deductions for childcare, mortgage interest payments, certain deductions
costs, medical expenses etc
● Corporate tax welfare: “everyone is on welfare” -> business and industry -> tax
deductions for employees health insurance, address a basic healthcare issue
● Tax breaks->higher profits for businesses->corporate welfare
● nation’s social welfare needs. Corporations also reap indirect benefits from standard
social welfare programs.
● create the conditions necessary for profitable business activity.
● income support programs put cash into people’s hands, which creates a steady supply
of consumers for the goods
● healthcare->steady supply of healthy workers
● Mute social unrest by cushioning inequality
● Social Welfare Impact of Non-Social Welfare Policies:
● A broader definition of social welfare policy would include the social purposes and
consequences of fiscal, military, agricultural, economic, employment, and physical
development as well as social welfare policies.
● 1. Intersection of SP and military policy: military spending and armaments creates jobs
for some people
● But military spending does compete with welfare
● 2. Economic policy reguarly affects social welfare policy: because it directly bears on
nationas income maintenance programs: Social Security, Unemployment Insurance,
food stamps, housing aid, Medicaid, and Medicare
● Economic turndown->people lose their jobs, demand for cash assistance,
● Interest rate increase->to cut down consumption->control inflation
● Gvt raises minimum wage
● 3. Intersection w transportation policy: Expanding or improving mass transit favors city
dwellers, non—car owners, and the less well-off. In contrast, highway construction
benefits car owners, the auto industry (and rubber and steel industries), surburbanites,
and more affluent communities. The choice between the two ways of traveling to work
also affects health care costs because highways produce more accidents, deaths, and
pollution than mass transit.
● DARK SIDE OF SP
● Non decisions: too narrow definition->social welfare policy is too narrow->because it
includes what the gvt does not do as well->referred to as nondecisions
● Issues kept off by influential people and groups from the public agenda, those which fail
to survive the political process
● Mobilizing bias against the issues: manipulation of myths, dominant community values,
political instituions and policies which disrupt status quo
● issues that fail to get a hearing address the needs of people with limited power and lack
of access
● Dark Side of SP:
● social welfare policies have perpetuated oppressive agendas for grps with less power
● Exmaples: Legalisation of slavery, from late 1870s to early 1960s, to keep blacks in their
place
● Women’s Rights: Throughout most of the century, U.S. social policy created barriers to
women’s full participation in wider society.31 Defining women’s place as the home, law,
custom, and family dynamics barred women from voting, owning property, getting an
education,
● Anti-gay policies:
 ● Competing Functions of SWP:
● 1. Social Functions: creating the conditions that promote individual development
● enhance the functioning and well-being of individuals and families. To avoid chaos and
disorganization, all societies need to maintain predictable patterns of behavior, to ensure
that individuals comply with societal norms and rules,
● 2. Economic function: regulate relationship of individual with the economy
● Economic Security: ensure minimum level of security to all, to old age, unemployed,
dissabled -> cash assistance with access to subsistence level of income, shelter, health,
education and employment. Protection from inequality->floor under wages, reduce
barriers, bar people from jobs
● Automatic Stabilizer: stimulate the economy during recessions and depressions,
income support program-> economic pump -> turn ppl without money into active
consumers during recession -> increase production
● Without automatic stabilizer -> downward spiral
● Socializing the cost of production: cash assistance benefits businesses stimulating
purchasing power -> improves profits by subsidizing wages -> cash benefits, food
stamps, housing supplements, health insurance -> employers then pay lower wage
● SWP-> ensures productivity of labour, enforces work ethic
● Social Reproduction: social reproduction as economic function of SWP: social
reproduction are tasks done by family to reproduce and socialise->need a standard
living to carry out these tasks -> low earning undermines the family capacity-> business
profits suffer due to this -> welfare programs thereby support family functioning
● 3. Political Functions : need to reduce social conflict -> political parites offer welfare
benefits to get support -> stabilize the system -> cushion the effects of dissatisfaction
and protests,
● Social welfare as struggle: social policy->outcome of struggle over resources by
competing economic, political and social functions, strengthen the political and economic
power of those with less access to income and services

Reading 2.2:
THE WELFARE STATE:
● Creation of welfare state post war 1945, new mode of gvt -> welfare state
● Welfare state sectors:
● 1. Social insurance: against loss of earnings, addresses the central problem of capitalist
labour markets
● comprehensive schemes designed to protect workers and their families against loss of
earnings due to injury, sickness, old age, disability, or unemployment
● 2. Social Assistance: safety net for the non-contributors, income support programmes for
those who cannot meet basic needs
● beneficiaries->means tested and selective, funded out of general tax and is
redistributice, strongly gendered -> primary recipients women and children
● 3. Publicly funded social services: free or subsidised access to goods such as education,
healthcare, childcare etc
● ‘decommodified’ solutions to problems of urbanization and marketization.
● 4. Social work and personal social services: welfare states provide personalized forms of
support such as social work with families, children’s services, social care for the elderly,
community care for the mentally ill, and probation and aftercare supervision for offenders
● Social work professionals->engage clients in ways which combine care and control ->
aim to normalize and discipline while extending care and support -> target lower class
population -> policing the family -> families deemed problematic are inspected and
pressed to adopt ‘normal’ patterns of child-rearing, better work habits, more responsible
sexual behaviour, and so on
● This is invasion of home According to Danzelot. He said all the above abt control
● 5. Gvt of economy: large-scale government controls on economic life.
● Nationalization of industry; economic planning; allocation of property rights; tax laws;
fiscal policy; monetary policy; consumer credit policy; labour market policies; corporatist
agreements; prices and incomes policies; farming and food subsidies; industrial policy;
training programmes; regional investment programmes; financial regulations; minimum
wage laws
● Governing the economy is the welfare state’s answer to the economic problems
associated with market capitalism
● post-war era when governments undertook to ensure full employment, both as a right for
workers and as an economic underpinning for spending programmes
● Functions and Dysfunctions:
● Welfare policies are rarely smoothly carried out because
● Relationship bw welfare state and capitalism is functionally necessary but structurally
contradictory
● each structure works to sustain but also to undermine the other
● Welfare state seen as subordinate institution rather than primary ones with welfare
benefits and transfers seen as secondary redistributions of market transactions
● Fiscal viability of welfare state->dependent on ability to generate growth and prosperity
● Balancing act: modify economic outcomes without obstructing enterprise, protect labour
without reducing employment
● This is a system conflict->fundamental contradiction->functional difficulties
● State welfare program->manage dysfunction rather than offering radical cures

● 20th Welfare State:

● , a historic transformation from residualism to universalism, from emergency relief to
routine prevention, and from private charity to public welfare
● abolition of poor laws and their harsh indignities.

3.1
● Who defines need? From a new rights perspective, needs are defined by the
powerful and imposed on the power less
● Need identification as exercise of power
● By professionals, experts, able bodied, whites to the blacks, disabled, and the
poor
● Source of oppression
● Meaning of needs:
● 1. Needs=drive=maslow's hierarchy theory, need to sleep or eat, biological
aspects
● 2. 'need' is universally used to refer to any necessary means to a given end
● Need as a means to get a given end, you need something to achieve something,
“A needs X to get Y”, needs statements conform to the relational structure, need
satisfier: means necessary to attain specific ends
● 3.whether or not there is some Y which can be said to be in the interest of
everyone to achieve, so qs is
● Are needs universal? ->objective interest to avoid harm, so they have a pursuit of
the good, therefore enable participation
● Needs have Universal Preconditions for participation which apply to all, therefore
needs are universal. Diabetic example: a diabteic person needs insulin even if
she doesnt know it exists because it is impt for her social participation
● Prereq for need satisfaction
● Basic human needs are the universal prerequisites for successful and, if
necessary, critical participation in a social form of life. We identify these
universal prerequisites as /physical health & autonomy
● Ian Gough: Framework of human needs See reading 3.1
● Basic human needs: physical health and autonomy of agency, these are
universal pre reqs for participation in social life
● Physical health is about survival, health can be conceptualized as absence of
diseases
● autonomy of agency: the capacity to make informed choices about what should
be done and how to go about doing it
● autonomy is impaired when there is a deficit of three attributes: mental health,
cognitive skills and opportunities to engage in social participation.
● A. Mental health: person's ability to deal with the envt in a rational way
● B. Cognitive skills: thought process, ability to reason and interpret, specific to
culture and universal skills
● C. Opportunities & participation in social roles: for roles, production, reproduction,
cultural transmission and political authority. Limitations to participate: dual
burden, economic, cultural rules
● Need audit-> measure the levels at which all these intermediate needs are
satisfied
● What are intermediate needs? Characteristics of need are satisfied which
contributes to improved physical health and autonomy. Need satisfiers are impt
because they have a contributive value, if they fail to meet basic needs then
there is a broken connection. Example, provision for energy, protection
● 11 intermediate needs: 9 for all ppl, 1 for children, 1 for safe childbirth
● 2 approach for need audit:
● A. Top down approach: group of elite professionals making decisions, when
needs are not same as want, people dont know whats best for them, example
 doctors make a professional judgement, knowledgeable, downturn: professionals
can be ignorant, keep their own interest first -exercise of power
● revulsion against professional and bureaucratic dictat has fuelled support for the
opposite approach
● B. Bottom up: ppl at local level identify need but there is no mechanism to involve
everyone even the nobles of the local have power here
● can simply endorse prejudice-and ignorance

Reading 3.2
Institutions of Social Policy:
The State
● Single most crucial social policy instituion
● Centralized gvt planning -> post indepednce period until 1970s in most
developing countries
● Promoting economic development -> it failed, limited success
● 60s-70s->World Bank-> project planning as major vehicle through which gvt
implemented and shaped policies
● New wisdom, state should be less interventionist->balanced
approach->conducive legal framework, guaranteeing macro-economic stability,
investing in basic social services and infrastructure, protecting the poor and
vulnerable with safety nets, conserving the environment and promoting
sustainable development policies
● he decentralization of responsibilities and resources within the State apparatus
both territorially and functionally->streamlining development
● Benefits of decentralization:
● 1.enhanced responsiveness to local needs,
● 2.stronger motivation and capacity of local field personnel given their greater
responsibilities,
● 3. a reduced workload for agencies at the centre as local representatives take
over many delegated tasks
● 4. inter-agency coordination at the local level
● 5. greater government accountability through local participation
Civil society
● Civil Society: entities impt in design and implementation of social policy
● Examples: NGOs at both domestic and international level, grassroot communities
such as village associations, TUs, councils, religious organizations
● Functions of NGO:
● 1. Relief and Welfare: work for charitable causes
● 2. Public service contractors: fill the gap for the govt in social services,where gvt
capability is limited, some ngos are heavily dependent on gvt funding
● 3. Popular development agency: community based projects, lobbying for
development of social policy, their role expands. Example Oxfam,
Actionaid->international organization for poverty aid in 45 countries
● 4.Technical innovation organizations that operate their own pioneering projects
 ● 5. Grassroot development organizations: local community based organizations
which have links with popular agency organizations in their livelihood struggles
● 6. Advocacy: Technical innovation organizations that operate their own
pioneering projects
● Relationship with the state is impt: either oppose, parallel, strengthen
● Indian subcontinent-> ngos work with the gvt, dont oppose them, autonomy
compromised
● Latin America->confrontational
● Advantages: voluntarism, local participation, dedicated to social development
goals, greater sensitivity to people’s livelihood needs and often have greater
technical skills. At the same time, their smaller scale and lack of red tape should
make them more flexible and responsive, with the freedom to challenge official
development priorities as appropriate.
● Disadvantages: contractual role can make them dependent on financial support,
weaken their link with the locals, unaccountable to the wider public,
● NGOs are not the panacea for solving social development problems they were
once held up to be
● NGOs must recognize their limitations and acknowledge the fact that, although
they have certain comparative advantages, they cannot replace the State.
Rather, they argue, NGOs should help strengthen civil society to make it more
effective and cohesive in articulating people’s needs to negotiate with the State
apparatus
Private Sector:
● Private Sector:
● informal , formal, international transactions corporations -> generate employment,
wages, social, environmental, economic impact
● Liberalization and privatization within the context of economic stabilization and
adjustment have provided the context for a more obvious and direct link between
business and social policy
● CSR->more about protecting their social image

International development institutions:

● (i) multilateral agencies such as the World Bank and IMF; (ii) the regional development
banks – IDB, AfDB and ADB; (iii) bilateral aid donors; (iv) UN agencies such as UNICEF,
UNDP, WHO and UNRISD amongst others; and (v) regional and supranational actors
such as the EU, NAFTA, the OECD, ILO, WTO and ECLAC. These bodies, together with
the activities of major NGOs and transnational corporations
● World Bank: policy work in health, education, housing etc., safeguard policies to
incorporate social dimensions into project implementation, unified set of social policy
principles and ‘Social Development Strategy
● Bilateral aid institutions have traditionally been far more concerned with promoting their
own commercial, political and strategic interests than with social policy matters.
● UN: UNDP & UNICEF
● internationalization of social development issues,
Reading 4.2
The neoliberal perspective:
● Challenging for those who think state has a central role to play
● neoliberal->question->need for publicly funded, state delivered institutions which make
the welfare state
● a concerted attack on the comprehensive systems of social protection that emerged in
Western Europe and the United Kingdom in the immediate post-war period
● They argue:
● 1. nation-states were undermined economically during the post-war period
● Because gvt diverted resources away from productive firms and from the free market to
the systematic state based protection of vulnerable sections of their population
● High taxation->reduced the scope for private investment
● 2nd argument: comprehensive social protection does not work anyway, public money
wasted on vast bureaucracies
● They preserve their own budgets than to provide a good level and choice of services to
those in need
● Welfare recipients become dependents, fail to act with responsibility
● should the free market and individual freedom be regarded as the key organizing
principles of human societies?
● Classical Liberalism: understanding of individual freedom and free market
● Adam Smith: free market to be organising principle, state intervention to be destructive,
market can secure individual and social welfare
● Leads to collective prosperity
● Only interference was to preserve its freedom
● individual liberty, the free market, and the minimal state, with the added element of
self-help, make up the classical liberal legacy
● Keynesian Welfare State->neoliberalism in the late 20th century
● Friedman: critical of economic policies during recession because they increase inflation
● Gvt should just restrict money supply depending on balance of inflationary and
deflationary tendencies, keeping taxes and spending low so as not to distort market
outcomes
● Neoliberal political philosophy: Hayek’s concept of negative freedom:
● This understanding of liberty is ‘negative’ because it argues that individuals should be
free from constraints – what individuals do with their freedom is a private matter.
● Hayek believed that human liberty and the free market, working through a process of
‘catallaxy’, would create a natural, spontaneous socio-economic order more efficient and
less coercive than the interventionist
● organization of society should approximate closely to the ‘natural order’ produced by the
market inspired the neo-liberal attack on state welfare systems in the 1970s and 1980s
●
Neoliberalism and Welfare State
● Two concepts
 ● Bureaucratic oversupply – key public servants will devise budget-maximizing strategies
to increase salaries and prestige as opposed to dispensing high quality services to client
populations.
● politicians are less keen on raising the taxes required to pay for these services with the
result that ‘bureaucratic over-supply’ inevitably leads to unmanageable public sector
deficits and budget crises
● State coercion – state welfare services are monopolistic and therefore restrict choice.
● State coercion->squeeze out private and voluntary alternatives, thus limiting consumer
choice
● High taxation->required to fund extensive public welfare systems depresses incentives
and reduces risk taking in market
● owing to lack of competition, state-supplied services tend to neglect quality, while public
sector employers and (unionized) employees can be resistant to change
● real losers in the welfare game are the poor. Low-income groups lack the resources to
contest bureaucratic decisions and pay a higher proportion of their earnings in taxation
● lack of choice leads to welfare dependency and failures of personal responsibility

● State should provide for minimum safety net through negative income tax to subsidize
low wages and maintain work incentives

Five remedies
● Reduction of state welfare provision – reduced state activity will allow private and
voluntary organizations to enter the welfare marketplace, cutting the costs of public
sector bureaucracy.
● Greater choice of services – new service-providers will allow welfare consumers greater
choice of provision.
● Negative income tax – the state should subsidise low earnings through NIT to ensure
continued participation in the labour market
● Safety-net welfare – individuals should be encouraged to insure against risk. The
poorest will need public support, but income should be provided at subsistence level and
services delivered through voucher schemes
● Tax cuts – savings from the closure of monopolistic state bureaucracies should be
returned to individual earners through tax cuts.

Critique:
1. Positive freedom is dismissed-> positive freedom is also important for marginalized
groups such as women, disbaled, minority -> because they have less access->need
policies that can increase their collective opportunities, thus adding to the liberties of
individual members.
2. do not distinguish between ‘freedom’ and ‘ability’: free market distributes income and
resources neither fairly nor equally->ppl w less earning power->less access to particular
goods-> they are not in a position to make the most of their national freedom
 3. appreciate that privately run institutions can also act coercively: executives and
managers in the private sector appear no less successful at expanding salaries and
budgets than their public sector counterpart
4. understand that the socio-cultural dimensions of welfare are important: UK -> low
taxation to stimulate entrepreneurial behavior and encourages personal responsibility
where as Scandinavian countries, however, despite some adjustments in recent years,
tax highly and provide comprehensive social services as a basic citizenship right

Reading 4.2:
Milton Friedman
● A conservative -social welfare program
● Mkt forces cannot ensure equitable income distribution
● Negative Income Tax: single transfer payment for each citizen
● For each $ earned reduce the payment by a certain %
● Family of 4 payment = 6000
● They receive 24k
● If they earn 12k then they will get 18k (24k-0.5(12))
● Did not adopt this: Because these groups could live quite comfortably at taxpayer
expense, Political support for such a program would be difficult to sustain
● Earned Income tax credit: only people employed received benefits
● How to expand support w/o undermining work incentives?
● government-sponsored employment coupled with negative income tax payments that
are too small to live on, even in large groups. Most low-income people would continue
working for private employers, as they now do under the earned-income tax credit. For
others, government would stand as an employer of last resort. With adequate
supervision and training, even the unskilled can perform many useful tasks
Reading 5.1:
● Social democratic welfare:
● features
● 20th century -> all gvt legislations to provide social assistance -> retirement age,
workplace and safety laws
● Political context: middle way bw liberalism and socialism
● State action to protect and promote the welfare of citizens, irrespective of labour
market participation
● willingness to use state action to achieve progressive outcomes rather than
adherence to a particular principle (universalism), method (public provision), or
form of government (national rather than local)
● Social democratic welfare regime: decommodified, comprehensive, universal
state welfare services provided on the basis of citizenship with relatively minor or
marginal roles played by the private, voluntary and informal sectors
 ● Sweden->social democratic welfare state->broad coalition of support->believed it
could be reformed through purposeful government action and by enlisting the
co-operation of industrialists and property owners
● use political influence, rather than nationalization,
● Full employment, universal state welfare provision, industrial democracy, a
solidaristic wage policy (designed by two leading economists Rehn and Meidner),
and an active labour market programme became defining features of Swedish
society
● This is according to New Labour’s modern approach -> Features of social
democratic welfare state
● 1. Active rather than passive welfare state: encourage those of working age to
get paid employment through incentives and sanctions to avoid long term
dependency
● 2. Diverse range of publicly funded providers: private firms working in public
interest to provide more effectively
● 3. Consumer focused: focus on needs and preferences of service users who
demand more personalized services rather than uniform
● 4. Better balance between universal and selective provision: some services on
universal basis and others more targeted so that the needs of both taxpayers and
services recipients are met as fully as possible
● 5. Equalizing opportunities rather than outcomes: should focus on providing
opportunities, remove social barriers for mobility such as poor schooling
● 6. Promoting active forms of citizenship: citizens are expected to respond
positively to government offers of financial support and training by making
themselves available for work and taking advantage of the various opportunities
they are provided with
● 7. Rigorous monitoring of services outcomes: Target setting, audit and inspection
to achieve egalitarian outcomes
● Problems of this:
● 1. Incorporation of market vocab: undermines ethos of public services, citizens
into consumers
● 2. Neglect the need for redistributive measures to counter growing inequality
● 3. New Labour’s decision to link ‘good’ citizenship primarily to labour market
participation has served to devalue noncommercial forms of community
involvement.

Socialist Perspective:
● Key Ideas:
● Marx: ownership of means of production determines structure of society
● Human history: struggles between dominant and oppressed classes
● Capitalism is prone to crisis: crisis of overproduction, unemployment due to reserve army
of labour
● the mass of humanity has become alienated from the means by which to produce what it
needs to sustain its own existence
● Surplus value is produced but the capitalists get the gain, surplus because overtime,
● offered an analysis of capitalism’s unjust and contradictory nature and of the relations of
social and economic power on which it was founded
● Prescriptions of Marxism:
● Universal income, tax progressive, reduction of working hrs, decentralization
● 2 functions of state:
● 1. Accumulation to produce more capital->cost of reproduction = wage, state takes this
responsibility so capitalists can pay less
● Social wage: goods and services which society provides for if social wage is smaller than
there is more commodification
● 2. Legitimization: to mitigate the effects of crisis in capitalist society
● State makes revenue by taxing wages and not profits
● Critique of social policy:
● Horizontal redistribution->class inequality
● Legitimization of capitalism
● State welfare has benefited the capitalists more

● Capitalist Welfare System - 20th century

● welfare state remains a capitalist institution rather than the outcome of a socialist
transformation
● 1. Instrumentalist critique: shape and nature of the welfare state is deliberately
contrived to accord with the economic requirements of capital
● welfare state, by implication, is a conspiracy against the working class
● Ppl in gvt and administration->from rich backgrounds->establishment of status quo
● 2. Structural logical critiques: logical requirement to protect capital’s long term
interests
● state behaves like a managing committee only in a metaphorical sense
● Economic imperatives determine the outcomes of social policy: happens because state
has priorities -> economic growth
● Exploitative nature of capitalism->state obscures the disciplinary nature of its relationship
to its citizens by making welfare goods and services appear as a form of ‘social wage,
● Ideological manipulation
● However, Gramsci says not everyone is hooked with capitalism-> Part of the socialist
project has to do with whose ideological interpretations of the world will dominate
● Socialism can be a counter hegemonic force
● 3. Neo-Marxist critique: capitalists cannot survive without a welfare state and cannot
exist with one.
● Contradiction 1: legitimacy to capitalism->subjected working class to new forms of
adiministartive scrutiny and normative control
● 2. that the stabilizing influence which the welfare state had brought to capitalism would
be fiscally and politically unsustainable. Capitalism could neither survive without having a
welfare state, nor could it endure the costs and implications of having one.
 Gradualist Socialism:
● argued that the development of a mixed economy and the policies of a Labour
government in the post-Second-World-War period were such that by the 1960s a
country like Britain was no longer a capitalist society in the original sense

Revolutionary Socialism:
● aims to overturn capitalism not by gradually transforming the state, but by taking
command of it so it may properly serve the interests of the oppressed and working class
● ‘actually existing’ socialism turned out to be a failure. Not only did ‘communist’ regimes
never reach the stage when universal human welfare could be assured without state
intervention, but in many instances the socialist project was cruelly stripped of its
essential humanity
● Failed due to lack of standards and quality, r beneficent in intent, it was ‘topdown’ and
authoritarian in nature,

● Socialism is now dead

● Collapse of Soviet communism, market based reforms, global nature of capitalism and
scope for anti capitalist social policies
 Module 2
Sen, A. (1982). ‘Concepts of Poverty’ in Poverty and Famines. New York. Oxford
University Press
Requirements of a concept of poverty
● Creating problems for those who are not poor is the real tragedy
● Who should be the focus of concern?
● Consumption norms or poverty line - poor people are those whose consumption
standards fall short of the norms or whose incomes lie below that line
● Even if we have identified the poor and specified that the concept of poverty is
concerned with the conditions of the poor there are certain problems - 1) aggregation -
count the number of poor and then express it as the ratio of the number of poor to the
total number of people in the community - Headcount H
● Drawbacks- 1) takes no account of the extent of the shortfall of incomes of the poor
from the ‘poverty line’ - a reduction in the incomes of all the poor without affecting the
incomes of the rich will leave this headcount measure completely unchanged. 2) it is
insensitive to the distribution of income among the poor; in particular no transfer of
income from a poor person to one who is richer can increase this headcount measure.
● Requirements of a concept of poverty must include - 1) a method of identifying a group
of people as poor 2) a method of aggregating the characteristics of the set of poor
people into an overall image of poverty.
● Biological Approach - if total earnings are insufficient to obtain the minimum
necessities for the maintenance of merely physical efficiency
● if someone has no necessary means to sustain himself…like food, water, shelter etc.
● Starvation is the most telling aspect of poverty
● Particular patterns of consumption behavior in a community can be known through this
approach.
● Malnutrition captures only one aspect of poverty, but it is an important one.
● Problems - 1) there are significant variations related to physical features, climatic
conditions and work habits. There is difficulty in drawing a line somewhere, and the
so-called 'minimum nutritional requirements' have an inherent arbitrariness that goes
well beyond variations between groups and regions. 2) translation of minimum
nutritional requirements into minimum food requirements depends on the choice of
commodities. The actual incomes at which specified nutritional requirements are met will
depend greatly on the consumption habits of the people. 3) for non-food items such
minimum requirements are not easy to specify, and the problem is usually solved by
assuming that a specified proportion of total income will be spent on food. It varies with
relative prices and availability of goods and services.
● Inequality Approach - poverty is essentially inequality, transfers from rich to the poor
can make a substantial dent on poverty
● List of goods ad services is made in an informed way, like what is needed at a certain
place and at a certain time. The consumption patterns are drawn in accordance with our
understanding of living standards in a particular society.
● inequality is a fundamentally different issue than poverty.
 ● Problems - 1) A transfer of income from a person in the top income group to one in th e
midd le income range must ceteris paribus reduce inequality; but it may leave the
perception of poverty quite unalfec ted . 2) a general decline in income that keeps the
chosen measure of inequality unchanged may, in fact, lead to a sharp increase in
starvation , malnutrition and obvious hardship ; it will th en be fantastic to claim that
poverty is unchanged.
● Relative Deprivation - for a social animal the concept of being deprived (being poor) is
relative.
● Contrasts - 1) ‘Feelings of Deprivation’ and ‘Conditions of Deprivation’ - Material objects
cannot be evaluated in this context without reference to how people view them, and
even if 'feelings' are not brought in explicitly, they must have an implicit role in the
selection of 'attributes' . 2) the choice of 'reference groups' for comparison. Again, one
has to look at the groups with which the people in question actually compare themselves
with.
● Can not be the only basis for the concept of poverty
● there is an irreducible core of absolute deprivation in our idea of poverty, which
translates reports of starvation , malnutrition and visible hardship into a diagnosis of
poverty without having to ascertain first the relative picture
● Value Judgement - poverty lies in the eyes of the beholder - unleashing one’s personal
morals on the statistics of deprivation. It is always defined according to the conventions
of the society in which it occurs.
● Policy Definition - public policy - standards must have smth to do with the broad
notions of acceptability , but it is not the same as reflecting precise policy objectives.
● Difficulties - 1) practical policy-making depends on a number of influences, going
beyond the prevalent notions of what should be done. Depends on a variety of factors
including govt, sources of its power and forces exerted by other orgs. 2) a clear diff bw
the notion of deprivation and the idea of what should be eliminated by policy. policy
recommendations must depend on an assessment of feasibilities
● If this approach is accepted, then the measuremen t of poverty must be seen as an
exercise of description assessing the predicament of people in terms of the prevailing
standards of necessities
● BISP - cutoff at 16.17, below that are poor

Amartya Sen Poverty and Affluence

● Poverty Line - defined as the level of income below which people are diagnosed as
poor
● Measurement of poverty - 1) identification of the poor 2) aggregation of the stats
regarding identified poor
● H - Headcount - the number of people below the poverty line, then further refine the
index of poverty as the proportion of the total population that happens to be below the
poverty line - But, it pays no attention ot the fact that people could be a little below the
line, or a lot, and the distribution of income among the poor, may or may not be veru
unequal.
 ● Income Gap (I) - measures the additional income required that would be needed to
bring all the poor up to the level of the poverty line - this gap can be expressed in per
capita terms - the avg shortfall I of income of the identified poor from the poverty line.
But, it is insensitive to the number of heads involved and takes note only of the average
gap of the income of the poor from the poverty line
● a transfer of income from a poor person to one less poor but also below the poverty line
(before and after the transfer) would leave both the values of H and I completely
unchanged. But it can certainly be argued that aggregate poverty is increased by this
transfer, since the poorer person is even poorer now
● Distribution of Income (D) - D=G (Gini coefficient)
● P - axiomatically derived aggregate poverty measure
● The identification of poverty is an acknowledgement of deprivation
● Poverty as capability failure instead of failure to meet the basic needs of specified
commodities - achieve certain basic functionings and acquiring the corresponding
capabilities
● capability-based approach to poverty can be contrasted both (1) with the view of poverty
as low utility, and (2) with seeing poverty in terms of low income
● Poverty is not a matter of low well being, but of the inability to pursue well being
precisely bcs of a lack of economic means
● In the income space, the relevant concept of poverty has to be inadequacy (for
generating minimally acceptable capabilities), rather than lowness (independently of
personal characteristics).

Measuring Poverty and Inequality

● Size Distribution - deals with individual persons or households and the total incomes
they receive - distribution of income accruing to size class of persons
● Economists and statisticians therefore like to arrange all individuals by ascending
personal incomes and then divide the total population into distinct groups, or sizes
● Quintiles - fifths
● Deciles - tenths
● Income inequality - disproportionate distribution of total national income among
households - bottom 10% receive 1.8% of the total income, top 10% receive 28.5%.
● Lorenz Curve - A graph depicting the variance of the size distribution of income from
perfect equality.
● numbers of income recipients are plotted on the horizontal axis, not in absolute terms but
in cumulative percentages.
● vertical axis shows the share of total income received by each percentage of population
● Diagonal represents perfect equality
● Lorenz curve shows the actual quantitative relationship between the percentage of
income recipients and the percentage of the total income they did in fact receive
● The more the Lorenz line curves away from the diagonal (line of perfect equality), the
greater the degree of inequality represented
 ● Gini Coefficient and Aggregate Measures of Inequality - An aggregate numerical
measure of income inequality ranging from 0 (perfect equality) to 1 (perfect inequality),
The higher the value of the coefficient, the higher the inequality of income distribution
● Advantages - 1) Anonymity - measure of inequality should not depend on who has the
higher income. 2) Scale Independence - measure of inequality should not depend on
the size of the economy or the way we measure its income. 3) Population
Independence - measure of inequality should not be based on the number of income
recipients. 4) Transfer Principle - holding all other incomes constant, if we transfer
some income from a richer person to a poorer person (but not so much that the poorer
person is now richer than the originally rich person), the resulting new income
distribution is more equal.
● Measuring Absolute Poverty - situation of being unable or only barely able to meet the
subsistence essentials of food, clothing, and shelter. Measured by Headcount Index.
● Total Poverty Gap - The sum of the difference between the poverty line and actual
income levels of all people living below that line.

Alcock, P. (2006). The Causes of Poverty. (pages 35-42)

● Relative roles of structure and agency explain social order and social change

Structural
● Emphasizes the importance of social circumstances and social forces in determining the
life courses and life chances of people.
● Economic growth, labour market opportunities, educational provision, social security
systems etc provide a powerful contextual framework in which our living standards and
social relations are created
● In order to change these circumstances and relations, these structural frameworks must
themselves be changed by policy action
(Fakeha’s)
● National Economic Structures - Nature of Growth in Pakistan
● Global Economic Structures - effects of fuel prices, remittances, global recessions etc
● Social Structures - have discriminations on the basis of caste, gender, religion etc.
Agency
● Everyone is the author of their own fortune or misfortune, all individuals make choices
about the life courses they wish to pursue, the social relations they wish to foster etc
● For society to function, individuals must take responsibility for managing their own living
standards and social relations, e.g. those who are unemployed should be responsible for
seeking a job
Fakeha’s
● Blames individuals, social difference in people bcs of themselves or their genes
● Pathological causes of poverty - Genetic, psychological and social differences
(disabilities, genetic differences, work ethics)
Discussion
 ● Social structures do set a social context within which everyone is confined, even the
choices that individuals do appear to have often turn out in fact to be largely constrained
by structural forces
● Yet, when individual agents make decisions about their own lives, they can change the
circumstances within which they live
● Life chances and social relations are a product of the interaction of both structure and
agency
● structural factors are likely to have a greater influence over relations between social
groups and social institutions, but individual life-course changes may be more directly
affected by the choices that agents make.
● importance of recognising the need for life-course planning in understanding social
relations - Importance of Agency comes into play here
● US - people who were poor were to be expected to take responsibility for making life
course changes to escape from poverty
● UK - welfare-to-work programme to encourage and assist unemployed people to find
paid work, and the expansion of tax credits for the low paid.
Pathological Causes
● ‘Individuals and poverty’ - includes genetic explanations, which seek to relate social
status with supposedly inherited characteristics such as intelligence, and psychological
approaches, which explain individuals' (non)achievements by reference to acquired or
developed personality traits
● ‘Cycle of deprivation’ - focus on the family or the community as the cause of poverty,
how kids were raised with lowered aspirations, these became internalised and when they
grew up, they just accepted it.
Structural Causes
● State policies have been developed to counter poverty but poverty still persists, so one
needs to look into the failings of the policies and the structural changes instead of those
in poverty
● Housing policies, health policies, social services etc have all failed those who are poor
and forced them into poverty.
● The failure to develop appropriate policy is to be blamed on those who, through political
action, claim to be prepared and able to change social structures and social policies.
● Poverty is a political concept. The identification of poverty is linked to political action to
eliminate it
● politicians cannot control economic forces, but rather that they must seek to control
economic forces if they wish to influence the events that economic forces largely
determine.

Dreze and Sen (2013). ‘Democracy, Inequality and Public Reasoning’ in An Uncertain
Glory. London, Allen Lane. (pages 266-273)

● Bias in media coverage by the class and caste background of media professionals and
owners
 ● Systematic illusions about the nature of the country and the sharpness of disparities
within India tend to survive - and are sometimes hardened - by the limitations of the
media.
● Very little coverage of rural issues - 2% of the total news coverage
● Coverage of the lives of the deprived is astoundingly limited for the media as a whole
● the deep imbalance has managed to become almost invisible to the classes whose
voices count and whose concerns dominate public discussion
● small group of the relatively privileged seem to have created a social universe of their
own
● The privileged group include - businessmen, professional classes, country’s relatively
affluent including the educated class.
● Indian Intelligentsia - shared interests and concerns that tend to confine the
concentration of public discussion on the lives of the relatively affluent.
● Many demands titled as ‘populist’ e.g. higher pay scales for public sector employees, or
low fuel prices are primary demands of the relatively affluent with limited benefits for the
underprivileged - categorized under ‘demands of common people’ where political
stances come into play, even when n they actually deflect public resources that could be
used to reduce the astonishing deprivation of the really deprived.

Public Policy and Spending Priorities

● Allocation of public revenue is influenced by group interests

● Rapid economic growth = larger public revenue -> reduce deprivations of the underdogs,
serve the interests of the relatively privileged
● Expanding the contribution of GDP growth to public revenue - preventing tax evasion,
remove arbitrary exemptions, widening tax base
● valuable opportunity to make good use of public revenue for enhancing living conditions,
through public services and support.
● central government subsidies on petroleum and fertilizer alone are expected to cost
more than Rs I 65,000 crores in 2OI2- I3 - 4x what the govt spends on health
● National Food Security Bill - Dec 2011 - immediately described and very widely attacked
by influential critics as being 'financially irresponsible'.
● Resources required to implement the bill - Rs 27,000 crores per year - 0.3% of India’s
GDP
● the summary dismissal of it as 'fiscally irresponsible' is hard to justify when much larger
sums are spent on regressive subsidies, unbalanced salary hikes in the public sector,
and other less exemplary purposes.
● the exemption of diamond and gold imports from custom duties costs the exchequer
more than Rs 5 7 ,00 0 crores a year
● In February 20 12, the Finance Minister proposed introducing a small excise duty on
gold and precious metals used for jewellery - s immediately triggered massive protests
from jewellers and other influential people whose interests were affected
 Gazdar, H. (2007). Class, Caste or Race: Veils Over Social Oppression in Pakistan

● Social marginalisation in Pakistan - caste, religion and ethnicity

● Systematic marginalisation - due to social attributes e.g. caste, traditional occupation,
kinship, ethnicity, religion and lifestyles
● Public silencing oncaste contrasts
● the kinship group, known variously as 'zaat', 'biraderi' and 'quom' in different parts of the
country, remains a key - perhaps the key - dimension of economic, social and political
interaction
● the robustness of wide social networks based on kinship groups also accounts for
feelings of solidarity, group-based collective action, relative autonomy from state and
market, and a culture of hospitality
● KAMMIS
● Rapes perpetrated against low-caste women from chuhra, mussali, lachhi and scheduled
caste hindu communities respectively

Missing Women

● In the UK, France, US, the ratio of women to men exceeds 1.05 but in many third world
countries the female to male ratio is as low as 0.95 and 0.90 (for Pakistan) which is
significantly low. Reflects gender inequality across the world
● Naturally, more women (about 5% more) are born than men and are more resilient so
survive better at all ages. Women would still outnumber men if given similar care.

· Low female: male ratios in Asian and African countries. China missing more than 50 million
women

· Asia and north Africa – lower life expectancy and high fertility rate so would generally expect
a lower female: male ratio due to high female mortality rate

· Why such a higher mortality for females as compared to males? In countries like India. So
possible reasons could be maternal mortality but not an adequate explanation

· The mortality is still extra and very significant and such deaths don’t make up for it. Neither
does genocide?

· Then what are the reasons? Comparative neglect of female health and nutrition especially
during their childhood. Direct evidence of neglect of female children in terms of healthcare,
admission to hospitals and even feeding

· China – late 1970s, restrictions on the family sizes. During this, neglect of female child
health and nutrition significantly increased? The male to female birth ratio increased quite a
lot – indicating possible hiding of newborn female children to avoid rigors of compulsory
restriction of one child family
· What causes this neglect of females? Traditional cultures and values. But also 1) economic
links – ability to earn an outside income through paid employment seems to enhance the
social standing of a women (for e.g. in sub Saharan Africa). Makes her less dependent so
has more voice. 2) education and literacy also helps. 3) women’s economic rights (land
ownership rights and inheritance). Public policy can influence all of these

· Indian state of Kerala. Very developed schooling system. High literacy (above 90%).
Property inheritance part of the community. Women participating in gainful economic
activities. Extensive healthcare system. A poorer Indian state but social indicators are
impressive for e.g. life expectancy. Female: male ratio in kerala is now 1.04 similar to
Europe and America

· Conclusion: missing women are rescuable, after all, by public policy

Poverty Trends, Causes, and Solutions

Regional and Income Inequalities

 Module 3
Session 12

Economic Growth and Public Support

Incomes and Achievements

● The issue is the power of vulnerable groups to command food and other essentials,
rather than just the physical availability of commodities.
● Many essential commodities are not bought of sold in the market in the usual way and
conventional estimates of real income may not give us a good idea of the command over
a number of inputs which as, we have seen, play a crucial role in the removal of hunger,
such as education services, health care, clean water, or protection from infectious
epidemics.
● Dissonance between GNP and Achievements of quality of life - 1) GNP gives a
measure of the aggregate opulence of the economy and the translation of this into the
pattern of individual prosperity would depend also on the distribution of income over the
population. 2) capabilities enjoyed by people depend on many factors other than the
command over commodities which can be purchased in the market.
● Positive General Association - 1) increased incomes associated with greater general
affluence do indeed offer the opportunity to buy a number of commodities that are inter
alia crucially important for nutrition-related capabilities. 2) a higher GNP per capita
enlarges the material base for public support in areas such as health care and
education, and generally facilitates the provision of social security to the more vulnerable
sections of the community.
● A high level of GNP per head provides an opportunity for improving nutrition and other
basic capabilities, but that opportunity may or may not be seized.

Alternative Strategies: Growth-Mediated Security and Support-Led Security

● It is possible to distinguish two approaches to the removal of precarious living conditions
● Growth Mediated Security - promote economic growth and take the best possible
advantage of the potentialities released by greater general affluence, including not only
an expansion of private incomes but also an improved basis for public support.
● Support Led Security - resort directly to wide-ranging public support in domains such
as employment provision, income redistribution, health care, education and social
assistance in order to remove destitution without waiting for a transformation in the level
of general affluence. - success may have to be based on a discriminating use of national
resources, the efficiency of public services, and a redistributive bias in their delivery.
● However, deflecting resources to social services from investment reduces economic
growth and adversely affects future opportunities. Also, high growth is often
accompanied by increased inequality on the distribution of incomes, so that the people in
greatest need of capability enhancement may end up benefiting least from the general
process of economic expansion. Further, potential opportunity for expanded public
provisioning may not be typically seized by a growth oriented govt bcs of its
 preoccupation with the expansion of material opulence rather than with the basic quality
of human life.
● Under-5 mortality rate (U5MR) - note - demographic and health records prove rapid
nutritional improvement & public involvement in various forms of social support, including
the direct provision of vital commodities and social services.
Economic Growth and Public Support: Interconnections and Contrasts
● The strategy of growth mediated security differs from the indiscriminate pursuit of
economic expansion or what might be called a strategy of “unaimed opulence”.
● Unaimed Opulence - consists of attempting to maximize economic growth without
paying any direct attention to the transformation of greater opulence into better living
conditions - undependable, wasteful way of improving the living standards of the poor -
opportunities for the conversion of private incomes into basic capabilities might be
expected to be particularly poor in a country where public services are persistently
sacrificed at the altar of economic growth.
● The effect of increased affluence on the quality of life can be expected to depend
strongly on the distribution of income
● Rapidly increasing general opulence in Brazil seems to have yielded so little in terms of
improvements in basic aspects of the quality of life, thus a strategy of unaimed opulence
can lead to a tremendous waste of the opportunities provided by rapid economic growth.
● An important part of the difference between unaimed opulence and growth-mediated
security relates to the expansion of employment opportunities - In SK for instance,
employment promotion has been based on 1) encouragement of labour intensive export
industries 2) maintenance of comparative advantage in labour intensive manufacturing
through the ruthless preservation of highly competitive labor markets 3) an active policy
of education, skills diffusion and training 4) supplementary public works programmes
● In Kuwait, however, a public sector job is guaranteed to every Kuwaiti not employed in
the private sector.
Opulence and Public Provisioning
● Direct provisioning by the state can assume an important role even when security is
mediated by general economic growth
● Example of Kuwait and KOC - the greater part of oil revenues has been allocated to a
massive programme of development activities, public sector employment, social services
provision and direct transfers. Medical services are provided free of charge to the entire
population, far reaching public provisions made in areas like housing, transport, water
supply etc. It has a system of large-scale direct transfers and financial help to
low-income families.
Growth-Mediated Security: The Case of South Korea
● Impressive growth rate of GNP per capita
● Tangible improvements in basic components of quality of life
● Outstanding reduction in infant and child mortality rates
● Unemployment rate has stabilized at a low value
● The extent of govt involvement in income redistribution and social welfare programmes
has been, until recently, rather small by international standards
 ● SK is seen as the “free enterprise model”, by way of an illustration of the redundancy of
planning
● Equitable growth was reinforced by the labor intensive orientation of the industry
● The role of govt policy in planning the nature of economic growth and in intervening to
shape the direction of investment and expansion has been oth pervasive and
enormously effective
● Involvement through - extensive credit controls, import substitution measures,
infrastructural investments, dissemination of information, sophisticated tax administration
system, promotion of active and competitive labor market.
● *Kuwait and SK have experienced growth mediated security
Support Led Security and Equivalent Growth
● Chile, China, Costa Rica, Cuba, Jamaica
● *look at page 20 for calculations

China and India

China, India and Kerala

● Kerala is one of the poorer states, yet it has achieved a remarkably high level of life
expectancy
● Doubts regarding whether Kerala’s longevity indicators are reflective of comparable
break through in general health and nutritional well-being have been raised, in terms of
1) low calorie intakes 2) high self-reported morbidity rates
● Calorie entail offers a poor basis of assessment of nutritional status
● Morbidity rates are based on self reported illnesses and it is not easy to determine the
extent to which they reflect a greater level of articulation of a population that is
enormously more literate and health conscious
● Extensive medical coverage of the population through public health services, helped by
the determination of the population.
● Public distribution of food goes well beyond the limits of urban areas and provides
significant support to the rural population.
● High literacy rate of Kerala is also a major asset in making people eager and skilled in
seeking modern remedies for treatable ailments - also has a role in facilitating public
participation in social change and in generating public demand for social security
● Kerala’s adult literacy rate is at 78%, compared to India’s 41% and China’s 70%, with
lower gender bias.
● China and India both have a very low female male ratio. 93:100, Kerala’s was 1.03
● Partially matrilineal system of inheritance in parts of Kerala have helped with this ratio
● The one state in India that has made use of support-led security has also been able to
avoid some of the disastrous implications of gender bias
● Kerala’s success shows how much can be achieved even at a low level of income, if the
public is aimed at promoting people’s basic entitlements and capabilities.
● People’s capability to conquer preventable illness and escape premature mortality
depends on their command over basic necessities and their ability to use these with skill.
 ● Public support of education, health, employment etc can contribute both to that
command and to the necessary abilities.

National Rural Employment Guarantee Scheme (NREGS)

● Formally presented in Sept 2005 by UPA in the Indian Parliament

● Primary purpose: provide for the enhancement of livelihood security of the households
in rural areas of the country by providing at least one hundred days of guaranteed wage
employment in every financial year to every household whose adult members volunteer
to do unskilled manual work
● Article 39 (a) and Article 41 - direct the state to ensure that within its economic
limitations, each citizen “has a right to an adequate means to livelihood” and “the right to
work to public assistance in cases of unemployment.. And in other of undeserving want”
● Treatment of employment as a right of citizens must be delivered by the state driven by
the paternalistic view of the state as delivering “gifts” to the people
● Process:
1. A household applies and register for job card to the village local council
2. Any adult member can apply and work must be provided within 15 days
3. Labourers are entitled to the statutory minimum wage applicable to agricultural
workers and wages are paid through their bank/post office account which are
opened free of cost
4. If employment is not provided within 15 days, unemployment allowance of one
fourth of the minimum wage is given for the first 30 days.
● Work sites include 4 basic facilities 1) first aid 2) drinking water 3) shelter 4) creche for
children below 6
● Priority is given to women workers
● All of the wage cost of unskilled workers and 75% of the material and wage cost of
skilled and semi skilled workers is borne by the central govt
● High dependence on central govt funds allows central govt to unilaterally restrict the
outreach of the scheme
● All NREGS related docs are available for public scrutiny
● “Strengthen grass root processes of democracy infusing transparency and accountability
in governance” - data displayed at local govt council offices, copies available at nominal
costs.
● Applauded for its generation of rural unskilled employment at a large scale and for
relegating transparency, accountability and implementation
● Resulted in a reduction in indebtedness of landless farmers
● Employment opportunities in rural areas have reduced distress migration and improved
bargaining powers of the worker
● Lessened the burden on public facilities like health, education and housing
● Financial inclusion 90.8 million bank and post office accounts opened
● Low income families - low wage agriculture labourers to self-employed farmers
● Employment provided to women, destitute, old and even physically challenged
 ● Converged gender based gaps between male and female and region based gaps
between rural and urban labor
● Dark Side: tightening of labor market and changes in agricultural practices have resulted
in small holdings with dependence on non-family labor facing high wages.
● Income, employment and output multiplier effects of the scheme are positive but are a
little skewed towards those with land and assets
● Increase in rural income has increased the demand for food, vegetables, milk and other
consumption items, triggering the recent inflation in India
● Critiqued for its shortfall of demand of employment generation
● Budgetary allocation is only about half of the ministry of Rural Development’s own
estimates of the “approved person days as per the labor budget” - funds released to
states have been rationed to the point that state gifts have been unable to pay wages
● Lack of funds, so dissuade people from applying
● Tradeoff between job creation versus assets creation demurred its implementation
● Main ideology: right to work
● Sustainability and continued success is affected by the change of govts and the
influence of the elite class in public policy.

Session 13

Social Protection
● Poor pay disproportionately without receiving meaningful benefits from an impoverished
state - failure of welfare state bcs of lack of adequate social services
● General agreement that poverty is not only a material condition, it extends to the denial
of human capabilities and dignity
● Social protection consists of programs in social assistance and social insurance
● Social security and social safety nets are a subset of social protection
● Social security and social safety are rights-based
● Safety nets is philosophy based in instrumentalist reasoning
● Social protection pertains to investments in human capital that are both a practical and
strategic response for overcoming intergenerational poverty and vulnerability
● Social security, in the 1970s, aimed to protect formal sector workers through
unemployment insurance, retirement income, disability income, access to health care,
education and other payments to their dependents - as the informal sector dominates
the economic structure of developing countries, large segments of workers remain
unprotected by social security systems.
● Safety nets consist of non-contributory, need-based, cash-transfer programs aimed at
the poor to enable them to manage risk - they include microcredit, school stipends and
food and nutrition programs. Thus, instead of generalized subsidies, the poor would be
identified and protected through targeted safety nets, However, the measures failed to
address or even dent poverty
● The concept of minimum social protection floor has been pushed to ensure that
access to essential social services and income security for all is provided via integrated
strategies.
The Pakistan Context: Dual Trends and Multiple Institutions
● 1990s poverty increased from 26.1% in 1990 to 34.5% in 2000-2001
● 2000s poverty dropped to 23.9% in 2004-5, 23% in 2005-6 and 19% in 2007
● Change in poverty is correlated with change in per capita GDP growth
● Ecnonomic survey of of Pakistan’s 2008-9 acknowledged that the level of poverty
according to various exogenous sources ranges from 22.3% to 30-35% in 2008-9 = 52
million out of 176 are below the poverty line (30%)
● Two views of providing welfare - 1) addressed through private initiatives such as private
philanthropy and charity 2) holds the state responsible through public financed programs
● Article 38 (a-d) hold the state responsible for the well being of people and the provision
of basic necessities of life to the indigent and the disadvantaged (charity approach) and
holds the state responsible for social security by compulsory social insurance (rights
approach), the latter is further supplemented in Pakistan’s international commitments
and agreements.
● Poverty Reduction Strategy (PRSP I and II) - structural adjustment policies decreased
state subsidies and employment and introduced social action programs
● PRSP was intended to increase economic growth and reduce poverty through pro-poor
policies and programs - PRSP II (2007-8) made greater percentage of funds available for
poverty alleviation.
● Different govts create their own flagship institutions for the implementation of social
protection programs (rights and charity) - address poverty and vulnerability - e.g
Worker’s Welfare Fund (1971) and Employees Old Age Benefits Institution (1976) were
established. Zakat and Ushr depts in 1980 by Zia. Bait-ul-Mal (1993) by NS (overlap with
Zakat, while other initiatives like school stipends for child laborers were inspired by
human development approach)
● Ministry of Social Welfare was formed in 1994, aimed at alleviating poverty and
promoting social progress - focused on children , people with disability and special
education
● Benazir Income Support Program (BISP) - targeted income support exclusively for
women in the household, alongside food support programs
● 3 to 4 million people below the poverty line had received assistance in 2009-10 from
zakat and bait ul maal. Zakat assisted 1.1 million people in 2010-11, BPM assisted 2.1
million in 2009-10.
● BISP currently provided 1000 per month to 3.4 million families
● Social security programs have provided even more sparse coverage, only 3.9 million
workers received assistance from the Workers Welfare Fund, and 409,254 from
Employees Old Age Benefits in 2010-11.
● Microfinance schemes have benefitted a limited number of people bcs microfinance
schemes benefit those who are already above the poverty line e.g. PPAF only provided
funds for microfinance to NGOs in the better off districts
● Pakistan’s safety net and social security programs reach out to only a fraction of people
who are entitled to benefits
Challenges: A Social Protection Policy and Implementation
● No stated policy on social protection in Pakistan
 ● Draft Protection Strategy 2007 - declined bcs new challenges of international economic
recession and low economic growth required a new approach
● Planning Commission attempted to lead the process of developing a social protection
policy with active input from provincial govts but the process stalled bcs of institutional
turf battles.
● CM Punjab’s taskforce on social protection attempted to streamline social protection
initiatives but was quietly disbanded in 2011.
● The issue of institutional autonomy and control blocks attempts at coordination while
different institutions push different uncoordinated remedies to tackle poverty and
vulnerability.
● Programs are often initiated without prior research e.g. BISP identifies poor through
proxy means test (PMT) administered through poverty scorecard to verify the poorest of
the poor in a scientific manner for cash transfers.
● Research would have shown that for Pakistan, a populous country, PMT is inappropriate
as it comes with high overheads due to household visits.
● No funds to update data, thus it is possible that those who go above the poverty line
might still receive it while many who fell into poverty would be ineligible.
● Instead of relying upon existing mechanisms after reforming them, it is not standard
practice in Pak to enact new institutions and legislations.
● Ownership issues also play a critical role in the success and sustainability of programs.
● Cash transfers are viewed as being politically motivated - parallel programs come in,
accumulation of which bleeds the limited funds
● In Pakistani context, economic policy failure to extend economic growth benefits to the
poor and vulnerable underscore the need for comprehensive social protection through
increased investments in human development.
● 18th constitutional amendment 2010- fifteen ministries including major social sector
minitreies such as education, health, populatoom, social welfare, laor, women, culture
and youth wwe developed to the provinces.
● After provincial govts refused to take on accumulated liabilities of the population program
and health projects, the Council of Common Interests decided that the federal govt shall
continue to fund these programs at 2010-11 levels. - 50% cuts on projects, due to
diversion of funds to flood affected areas, health and population budgets were frozen
● Preexisting poverty, unreliable research and data, limited institutional capacity and
growth, an uncertain political landscape coupled with low economic growth rates
resulting in resource constraints make funding social protection programs a significant
challenge
● World bank and pakistani taxpayers fund social protection, makes the community
dependent on their renewals.
● Design of the social protection programs attracts taxpayers through the principle of
universalism
Social Sector Trends: The Case for Social Policy
● 1990’s improving people’s access to health, eduction, population welfare and water and
sanitation were priorities under the auspices of te structural adjustment policies that
introduced the Social Action Programs.
 ● SAP I - raise Pak’s coail indicators so as to protect the poor from the negative effects of
economic liberalization.
● MDG 2005-15 commitments included setting up institutional reporting and funding
mechanisms to achieve social progress.
● Fiscal Responsibility and Debt Limitation Act of 2005 required that expenditures on
social and poverty related spending would not be less than 4.5% of GDP in any given
year.
● Literacy rates have risen from 35% in 1990-91 to 54% in 2009-10
● Infant mortality rate remained 85 per 1000 throughout the 1990s.= and decreased to
72% per 1000 in 2009-10.
● Urgent improvements in education, health, and poplulation welfare interventions are a
must for providing fundamental rights to citizens and thereby benefitting from the
demographic dividend.
● 18th Amendment Article 25(a) - education as a universal right
● Education as a percentage of GDP has dropped from 2.4% between 2005-7 to 1.8% bw
2010 and 2011 - current trends do not ensure the implementation of education as a
universal right to Pakistani children.
● Health - budgets indicate a worse trend compared to education trends - 0.5% of GDP in
the last decade
● Doubling of salaries and increments to match inflation - inc in recurring budget
● Development many ministries integrated project staff salaries into the development
budget instead of recurring budget
● Much of govt’s social sector investment is wasted when project implementation is
delayed or partial - social sector programs dont function smoothly
● Safety nets are a major pillar of the PRSP - the govt has invested in safety nets as a
priority rather than in social sector quality improvements per se.
● Safety nets expenditure relates to salaries rather than investments in quality
improvements and expansion to remote rural areas
● Post 2008 - bulk of new investments consist of unconditional cash transfers, ensconced
in band-aid approaches, to women, while social security and insurance account for a tiny
number of eligible persons
● Shrinking public services do not reach the bulk of population, thereby exacerbating
poverty and inequality, while significant amounts given as cash transfers/ charity can not
rescue the poor from poverty.
Social Protection
● social protection as: ...a set of policies and programme interventions that address
poverty and vulnerability by contributing to raising the incomes of poor households,
controlling the variance of income of all households, and ensuring equitable access to
basic services. Social safety nets, social insurance (including pensions), community
programmes (social funds) and labour market interventions form part of social protection.
(Government of Pakistan 2007a: 14)
● 1) social protection as mitigation for risk and uncertainty: the government needs to
address market failures in risk pooling and insurance 2) direct role of government in
reducing social inequity through income transfers, asset build-ups and other
 redistributive interventions 3) government might be interested in countering social
exclusion and marginalisation through the promotion of social mobilisation of the poor
● The main programmes under social assistance were Zakat, or cash transfer funded
from a religious levy, Pakistan Bait-ul-Maal (pbm), tax funded cash transfer, Tawana
Pakistan, or healthy Pakistan, a school-feeding programme for girl students, and an
untargeted wheat price subsidy.
● Under social insurance, the main programmes were the Employees Old-age Benefit
Institution (EOBI), the Workers’ Welfare Fund (WWF), and the Employees’ Social
Security Institution (ESSI), all of which were funded using payroll levies on employers.
● federal government spent around Rs 11 billion for social assistance in 2006-07. The bulk
of this spending was in the form of Zakat (Rs 5.9 billion) and the FSP which was in fact a
cash transfer under pbm (Rs 4 billion).
● The core of the BISP was a monthly cash transfer of Rs 1,000 ($12) to 3.4 million
beneficiaries.
● Ever-married women were identified as the primary beneficiaries, and ever-married men
could apply for inclusion in cases where no ever-married woman was a family member
● The programme was reported to have reached some 1.8 million women beneficiaries in
2008-09, and estimated to have included another million women in its second year of
operation
● Zakat is not tax financed, but funded through the collection of a religious levy on bank
accounts held by Muslims. Beneficiaries too must be Muslim. While the religious levy
was mandatory at the outset, account holders can now opt out. This has resulted in a
secular decline in Zakat collections and disbursements. Zakat beneficiaries are selected
by local mosque-based committees. Their coverage across the country is neither
systematic nor uniform.
● Baitul Maal is a tax-financed transfer which is administered through district level
government-nominated committees. Committees decide on applicants’ eligibility against
loosely defined criteria.
● Some of the information held in NADRA, such as education level, could conceivably be
used as a proxy - A list of filters was developed with the cooperation of NADRA to
identify potential beneficiaries through proxy means such as education, age and
reported occupation.
● Any system of beneficiary identification that required NADRA registration as a
precondition was likely to exclude the poorest since there were precisely the population
segments where NADRA registration was relatively weak
● These beneficiaries were to be identified by parliamentarians in their respective
constituencies using the same criteria which could be then verified through NADRA
records. The big difference from the earlier proposal was that now a person could be
recommended for BISP by a parliamentarian even if he or she did not have NADRA
identity cards.
Pensions
● The retiring civil servant is entitled to receive periodical pension payments after
completing permanent qualifying service (25 to 30 years) in any government department
● In case of death of an in-service or a retired worker, the eligible family members are
authorized to draw pension and allied benefits at the rate of 75 percent of the net
pension until marriage or death
● The amount of pension is usually determined by the length of completed years of
qualifying service of the concerned employee.
● The pensioner can also avail commutation option, according to which he/she can avail in
advance a maximum of 35 percent of gross pension for a number of years according to
the commutation table set by the government
● There are five major reasons why the pension-related spending in the country is
increasing These include: (a) ad-hoc and retrospective increments in pensions
announced by the government; (b) commutation and restoration facilities offered to
pensioners; (c) early retirements; (d) generous survivorship benefits; and (e) resultantly,
a high replacement rate.
● · Public sector pensions risen rapidly over the past decade in Pakistan
● · Retrospective increments, generous commutation and restoration facilities have
been fueling early retirements of civil servants. Highest replacement rate in south Asia
● · Limited fiscal space which shows why this heavy pension expenditure is a concern
● · What can be done? Improvements in public pension framework via several
parametric + systemic reforms, proper indexation of increments, elimination of
retrospective increases and rationalization of survivorship benefits
● · Pension payments an important form of old age income support. Poverty prevention
mechanism. Pension expenditures is increasing due to ageing populations, low fertility
rates, high dependency ratios
● · Problems in increasing this pension expenditure: structural problems and limited
fiscal space (room in a government´s budget that allows it to provide resources for a
desired purpose without jeopardizing the sustainability of its financial position or the
stability of the economy)
● · Sustainability of pensions? Even the advanced economies cant sustain these and
have started to focus on reforms as public pension fund obligations exceed their assets
● · Public pension expenditures becoming a fiscal burden in developing economies.
Pension payments as a percentage of tax revenue around 15.4 – relatively limited fiscal
space means that even pension payments of smaller magnitudes becomes difficult to
sustain in such economies
● · Public pensions in Pakistan are of an unfunded nature and thus are burdening the
already tight fiscal revenue situation
● · Pension spending for FY20 exceeded the total health and education spending
● · IMF have also started flagging the rising pension expenditure in Pakistan as a
pressing concern for its debt sustainability
● · Expenditure on pensions will rise going forward primarily because 1) retiree
headcount rising 2) lifespan of future retirees also increasing
● · Sustainability point of view – pensions rising is a big worry
● · According to WB’s projections, pension expenditures (only civil service) will overtake
wage expenditures in Sindh and Punjab in 2023 and 2028
● · British pension’s act 1871 in Pakistan. Clearly stipulated the right to pensions and
gratuity – so colonial? Also practiced in other colonial countries like India and
Bangladesh.
● · In Pakistan, more pensions continued but were non contributory with a defined
benefit mechanism. In the current form of pensions (pay as you go), the govt guarantees
pensions and other retirement benefits to employees who do not make personal
contributions from their salaries
● · Why is pension expenditure rising in Pakistan in recent years? 1) ad hoc and
retrospective increments in pensions announced by govt 2) commutation and restoration
facilities offered to pensioners c) early retirements 4) generous survivorship benefits 5)
high replacement rate
● · 1) ad hoc and retrospective increments in pensions announced by govt – in
Pakistan, govt uses unstructured approach to adjust yearly pension increments and
increases assigned benefits in an ad hoc manner. Currently, rate of pension increment is
independent of any indexation and appears to be overcompensating the pensioners in
real terms. Retrospective increase in future pensions also at discretion of govt.
● · 2) commutation and restoration facilities offered to pensioners: availing upto 35% of
their pensionable amount lumpsum in advance either when they retire or sometime later.
In case the commutation facility is availed, govt expenditures also increase.
● · 3) early retirements increasingly preffered. (i) Due to three main reasons:
retrospective increase ein pensions of future retirees and their abrupt withdrawal make
the future income stream uncertain for in service employees (ii) current employees prefer
early retirement to maximize their future pension benefits as they are more likely to
receive pension benefits for a longer period and the pensions are larger than their
salaries (iii) existing pension scheme equally treats the retirees attaining the age of 60 or
completing 30 years of service (iv) survivorship regulations are also generous – lifelong
entitlement to elder widow, divorcee daughter etc. this inclusion of multigenerational
family members is multiplying the average pension benefits from 12 to 45 years , the
current pension tree in Pakistan is just financially unsustainable (v) one fo the highest
replacement rates in the world – beneficial to employee but costly to the employer.
Pakistan mei the replacement rate is 70%. Replacement rate is the percentage of a
worker's pre-retirement income that is paid out by a pension program after the worker
retires.
● · Policy reforms – 1) parametric reforms: short term reforms – adjustments of
structural characteristics of the pension system e.g contribution rate, retirement ages,
pension benefit indexation formulas (ii) systemic reforms – long term reforms involving a
fully funded, developed pillar outside the existing public pension scheme in the long run.
Pakistan needs both types of reforms
● · Parametric reforms – Pakistan needs these. Could be introduced initially to
rationalize the cost and incentive structure of pension system and improve the fiscal
sustainability of future expenses. What reforms exactly? 1) ceiling and price indexation
measures to help reduce the excessively high replacement rate – enforce ceilings for
maximum pension benefits. This would portect beneficiaries against loss of purchasing
power as well as considerably reduce the fiscal cost of increasing pension payments on
 an ad hoc basis. For example, philliphines uses the average of final 5 year earnings o
calculate pension benefits while china, Indonesia and Vietnam use lifetime earnings to
calculate pension benefits 2) elimination of retrospective increases is a must to avoid
exponential rise in future obligation – retrospective increases in pension need to be done
away with as they are a huge liability for fiscal authorities. Eliminate these back dated
pension increases and that would bring the replacement rate significantly lower 3) govt
may also consider increasing retiring age and or contributory years – the increase in
level of standard pension age may reduce average coverage period of retirement
benefits. Measures like restricting early retirement eligibility, reducing the marginal
benefits below a threshold retirement age, amrginzlaiing disincentive to work can all help
achieve this objective 4) survivorship beenfits to be considerably rationalized: exclude all
family members other than minor children and widoes. In Japan, for e.g. widows under
the age of 30 entitled to receive permanent earnings related survivor pension which wer
reduced to 5 years after comprehensive pension reforms in 2007. Ins Sweden, widows
entitled to receive the flat survivorshiop benefit which was switched by the minimum
income guarantee eligible for a shorter period than the earlier facility 5) commutation and
restoration benefits must be streamlined – in the UK< commutation facility only offered to
retirees after ttaining a certain age for different employee groups (48 yrs for police dept)
● Systemic reforms: ensuring fiscal sustainability of pension liabilities in the long run.
Switching to pre funded contribution schemes.
● Concluding remarks: pension on the path to becoming unsustainable. Limited fiscal
space but imporvmeents in pension framework can substantially help make future
payments manageable. Eliminate generous retroscpetive increments, reducing
dependents. Finally, take periodic reviews of implemented reforms in order to ensure
long term sustainability of the pension structure