Employment and Social Policy

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How did the idea for a Social Protection Floor Index emerge?

In June 2012, The International Labour Conference adopted Recommendation No. 202 concerning national floors of social protection. Recommendation R. 202 (R.202) provides guidance for ILO member states on how to establish floors of social protection for all within an overall strategy that also seeks to extend even higher levels of social security to as many people as possible.  As members of the ILO, all countries should take that recommendation into account when developing their national social protection system. R. 202 was a global social policy milestone for the achievement of universal social protection.  This objective was further strengthened by including SP floors into the Sustainable Development Goals in 2015.  However, R 202 leaves the monitoring of the implementation to national societal mechanisms. The Global Coalition for Social Protection Floors (GCSPF) decided early after the adoption of R.202 that civil society should play an active role in monitoring and that it should develop its own monitoring instrument. Hence the GCSPF in 2014/15 got together with researchers from the Maastricht Graduate School of Governance at the  United Nations  University  in Maastricht  and developed a Monitoring Index for national SPF policies.

What is the political relevance of the Social Protection Floor Index?

Governments need constant reminders that they have promised to achieve social protection for all within the next decade or so. Hence, the seriousness and effectiveness of their social protection policies require constant critical - and perhaps even skeptical -  monitoring.   Effective monitoring of progress towards universal social protection needs powerful and objective instruments. The SPF index was conceived as a simple and robust monitoring tool for civil society organisations and other interested groups.

What does the Social Protection Floor Index measure and how does it work?

The SPF Index is an overall composite Index that merges national social protection gaps into one single figure that can be used to

1. show how big the current SP problem is, but also
2. to monitor the development of social protection gaps over time.

The single figure is the estimated amount of resources that would be needed to close gaps in minimum income security and essential health care. The income security gap indicates the total amount of resources that would be needed to raise the income of all poor in a country to a national or international poverty line. The health care gap is calculated as the (possible) shortfall of a country’s public health expenditure in comparison to a level of adequate expenditure that would guarantee a health care system with sufficient staff and suitable internal resource allocation.      

The amount of resources required to close SP gaps is expressed in percent of GDP. This relative measure allows an easy comparison to overall revenues, to GDP or to tax to GDP ratios. Contrary to any other composite indexes that are mere figures, this indicator speaks, i.e. it has a real meaning. It signals to governments and societies the minimum amount of government revenue or tax income that needs to be invested to close their national SP gaps.

In the first report in 2016, SPFI results for 2012 were measured; subsequently, results for 2013 and 2015 were published. What is the added value of these updated data? Which developments are identifiable?

To map developments towards universal social protection, long series of figures are necessary. Otherwise policy trends cannot be properly identified. To ensure that policy trends clearly emerge and index changes are not just accidental data effects, a long series of figures is needed. This is why it is important that the index calculations are repeated every second year. This is a relatively cost effective operation as the data that are used by the Index are exclusively national, OECD, Word Bank and WHO data, which are publicly available.  

SPFI results suggest that most countries would be capable of establishing Social Protection Floors. Yet, the data also reveals that for some countries Social Protection Floors would not be achievable with domestic resources alone. What could be done to also secure minimal social protection in these countries?

SPF Index results show that there are only about a dozen developing countries that cannot possibly afford to complete SPFs by their own means. R.202 envisages that ILO members who do not have sufficient national resources may seek international help to finance their SPFs. It would be a good, systemic and well targeted investment of international development aid to support national SPFs on a temporary basis. International support should take the form of matching national investments and should be tied to credible policies that are aiming at establishing self-support within a reasonable time frame.   

Would an international financing instrument be beneficial and what could it look like?

Ideally, we should have a Global Fund for Social Protection. The ILO first explored the idea in 2002.  Later, it was developed further by former UN Special Rapporteurs Olivier de Schutter and Magdalena Sepulveda[1]. One could try to convince governments to set up the fund.  This has been done before in the case of the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). That fund disburses presently around US $ 4 billion a year. Our SPF Index shows that we would need a fund of that size or preferably about twice that size to support a dozen poor countries, to make credible steps towards a complete SPF and to pull millions of people out of poverty and misery.  

However, at a time when national egoism, or worse nationalism, and social indifference are on the rise and multilateralism seems to lose ground, the appetite for another big fund is certainly limited.  This is why I think that we – civil society that is - should simply kick-start such a fund by engaging global citizens who want to contribute to real social change. We would need roughly 1% of the income of the World’s about 2000 billionaires to make up one third of that amount, and  we would need 1% of the income of about 16 million people with a medium income to make up for the other two thirds.

[1] For more information see: De Schutter, O. & Sepúlveda, M. (2012) Underwriting the Poor: A Global Fund for Social Protection

Michael Cichon, March 13th 2020

Department/Section: Globale Politik und Entwicklung