Where is the Money Coming From? Ten Stylized Facts on Financing Social Protection Responses to COVID-19

Abstract

Since the onset of the COVID-19 health crisis, and associated stringency measures, governments have acted in support of businesses and individuals by activating fiscal stimulus measures and introducing or expanding social protection programs. Initiatives to collect, analyze and monitor social protection responses have generated a wealth of evidence on the most aspects 1 The note presents preliminary findings for discussion and only reflects the personal views of the authors. We are grateful to Penny Williams, Amjad Zafar Khan, Delphine Prady and David Coady for precious comments and support. Almenfi and Gentilini are with the World Bank; Breton, Dale and Richardson with UNICEF; and Pick is with the OECD.

What role for emergency basic income in building and strengthening rights‐based universal social protection systems?

“…Many wealthier states put themselves on a quasi‐war footing, adopting a “whatever it takes” mentality to prevent poverty, deprivation and to guarantee survival, although only over the short term. States deployed massive amounts of resources to the emergency response – Japan, for example, committed an unprecedented 42 per cent of its GDP to fiscal stimuli in 2020 (Almenfi et al, 2020).…”

Lessons from a time of upheaval: COVID‐19 in South Asia

“…By February 2022, the six largest countries in South Asia had implemented 159 Social Protection and Labor measures. An estimated 79% of aid disbursed was in the form of social assistance and 11% each was directed to social insurance and to labor market assistance (Almenfi & Iyengar, 2022). These countries had ramped up expenditure on assistance to 1.8% of Gross Domestic Product in 2021-22, compared to 1.13% of F I G U R E 1 COVID-19 stringency index in South Asian countries.…”

“…Despite the rapid and significant expansion, in general, these measures were inadequate (see Drèze and Somanchi (2021a) for a discussion of India). Overall, the South Asia region spent US $46 per capita (unadjusted for Purchasing Power Parity) relative to the US$314 per capita in the 194 countries for which these data were compiled (Almenfi & Iyengar, 2022).…”

“…The success of social protection programs depends on the ability of the state to reach not only pre‐existing beneficiaries but also the “new poor”, those pushed into poverty on account of the crisis. Major South Asian countries used national identity or social registries (National Identity or NID in Bangladesh), administrative beneficiary lists from pre‐existing programs (such as the Pradhan Mantri Jan Dhan Yojana or the MGNREGA and old age pensions in India, the BISP in Pakistan) and online applications to expand or introduce social protection to cover the vulnerable and the new poor (Almenfi & Iyengar, 2022: Gentilini, 2022). Papers in this issue address various aspects of this problem.…”

World Bank East Asia and Pacific Economic Update, Spring 2021: Uneven Recovery

“…13 Recent review of how governments in East Asia and the Pacific have financed their social protection responses to COVID-19 found that most countries have funded expanded programs through internal budget reallocations or by increasing deficit spending-although at least a couple of countries (Fiji, Indonesia) have taken on multilateral debt to finance their social protection responses (Almenfi et al 2020; World Bank forthcoming).…”