Advertisement

International Tax and Public Finance

, Volume 8, Issue 4, pp 529–556 | Cite as

Social Risk Management: A New Conceptual Framework for Social Protection, and Beyond

  • Robert Holzmann
  • Steen Jørgensen
Article

Abstract

This paper proposes a new definition and conceptual framework for Social Protection grounded in Social Risk Management. The concept repositions the traditional areas of Social Protection (labor market intervention, social insurance and social safety nets) in a framework that includes three strategies to deal with risk (prevention, mitigation and coping), three levels of formality of risk management (informal, market-based, public) and many actors (individuals, households, communities, NGOs, governments at various levels and international organizations) against the background of asymmetric information and different types of risk. This expanded view of Social Protection emphasizes the double role of risk management instruments—protecting basic livelihood as well as promoting risk taking. It focuses specifically on the poor since they are the most vulnerable to risk and typically lack appropriate risk management instruments, which constrains them from engaging in riskier but also higher return activities and hence gradually moving out of chronic poverty.

social protection social risk management poverty vulnerability 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Ahmad, E., J. Dreze and A. K. Sen. (1991). Social Security in Developing Countries. Oxford: Oxford University Press.Google Scholar
  2. Alderman, H. and Ch. Paxson. (1992). "Do the Poor Insure. A Synthesis of the Literature on Risk and Consumption in Developing Countries." Policy Research Working Papers-Agricultural Policies,WPS1008, The World Bank, October.Google Scholar
  3. Badelt, Ch. (1999). Social Risk Management and Social Inclusion. World Bank, September (mimeo).Google Scholar
  4. Barr, N. (1998). The Economics of the Welfare State, 3rd ed. Oxford: Oxford University Press.Google Scholar
  5. Baulch, B. and J. Hoddinott (2000). "Economic Mobility and Poverty Dynamics in Developing Countries." Journal of Development Studies 36(6), 1–24.Google Scholar
  6. Bernstein, P. L. (1996). Against the Gods-The Remarkable Story of Risk. New York: John Wiley & Sons.Google Scholar
  7. Besley, T. (1995). Savings, Credit, and Insurance. In J. Behrman and T. N. Srinivasan (eds.). Handbook of Development Economics, Vol. III, Amsterdam (North Holland) 2123–2207.Google Scholar
  8. Binswanger, H. and M. Rosenzweig. (1993). "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments." Economic Journal 103, 56–78.Google Scholar
  9. Coate, St. and M. Ravaillon. (1993). "Reciprocity Without Commitment. Characterization and Performance of Informal Arrangements." Journal of Development Economics 40, 1–24.Google Scholar
  10. Collier, P. and J. W. Gunning. (1999). "Why has Africa Grown Slowly." Journal of Political Perspectives 13(3), 3–22.Google Scholar
  11. Deacon, B., M. Hulse and P. Stubbs. (1997). Global Social Policy-International Organizations and the Future of Welfare, London: Sage Publications.Google Scholar
  12. Deaton, A. (1997). The Analysis of Household Surveys: A Microeconomic Approach to Development Policy, Baltimore: Johns Hopkins University Press.Google Scholar
  13. Eichberger, J. and I. Harper. (1997). Financial Economics, New York: Oxford University Press.Google Scholar
  14. Ellis, F. (1998). "Household Strategies and Rural Livelihood Diversification." Journal of Development Studies 35(1), 1–38.Google Scholar
  15. Gerowitz, M. (1988). Saving and development. In H. Chenery and T. N. Srinivasan (eds.), The Handbook of Development Economics, Vol. I, Amsterdam (North Holland), 382–424.Google Scholar
  16. Gore, Ch. (1995). Introduction: Markets, Citizenship and Social Exclusion. In Rodgers, G., Gore, Ch. and J. B. Figueiredo (eds.), Social Exclusion: Rhetoric, Reality, Responses, Geneva (IILS), 1–42.Google Scholar
  17. Hesse, P-J. (1997). Autour de l'histoire de la notion de risk. In J.Van Langendonck. (ed.), The New Social Risk/Les Niveaux Risques Sociaux, EISS Yearbook 1996, The Hage et al. (Kluwer Law), 5–52.Google Scholar
  18. Holzmann, R. (1990). The Welfare Effects of Public Expenditure Programs Reconsidered, IMF Staff Papers 37, 338–359.Google Scholar
  19. Holzmann, R. (2001). Risk and Vulnerability: The forward looking role of social protection in a globalizing world, paper presented at the "The Asia and Pacific Forum on Poverty-Policy and Institutional Reforms for Poverty Reduction", Asian Development Bank, Manila, February, 5–9, 2001.Google Scholar
  20. Holzmann, R and S. Jorgensen. (1999). "Social Protection as Social Risk Management: Conceptual Underpinnings for the Social Protection Sector Strategy Paper." Journal of International Development 11, 1005–1027.Google Scholar
  21. Holzmann, R. and J. Stiglitz. (2001). New Ideas About Old Age Security, Washington, D.C.: The World Bank.Google Scholar
  22. Hoogeveen, H. (2000). Risk and insurance by the poor in developing countries, paper presented at the "Microfinance for Disaster Risk Colloquium." sponsored by UNDP and the Disaster Management Facility, World Bank. Washington, D.C., February 2.Google Scholar
  23. International Federation of Red Cross and Red Crescent Societies (1999). World Disasters Report, Geneva (IFRC & RCS).Google Scholar
  24. Ilmakunnas, P., V. Kanniainen and U. Lmma. (1999). Entrepreneurship, Economic Risk, and Risk-Insurance in the Welfare State, Helsinki School of Economics (mimeo).Google Scholar
  25. Kanbur, R. and N. Lustig. (1999). Why is Inequality Back on the Agenda? World Bank (mimeo).Google Scholar
  26. Ligon, E., J. P. Thomas and T. Worrall. (1997). Informal Insurance Arrangements in Village Economies, University of California, Berkeley (mimeo).Google Scholar
  27. Lipton, M. and M. Ravallion. (1995). Poverty and Policy. In Behrman J. and T. N. Srinivasan (eds.), The Handbook of Development Economics, Vol. III, Amsterdam (North Holland), 2551–2657.Google Scholar
  28. Morduch, J. (1994). "Poverty and Vulnerability." American Economic Review and Papers and Proceedings 84(2), 221–225.Google Scholar
  29. Morduch, J. (1995). "Income and Consumption Smoothing." Journal of Economic Perspectives 9(3), 103–114.Google Scholar
  30. Morduch, J. (1999a). "Between the State and the Market: Can Informal Insurance Patch the Safety Net?" The World Bank Research Observer 14(2), 187–207.Google Scholar
  31. Murdoch, J. (1999b). "The Microfinance Promise." Journal of Economic Literature (forthcoming). OECD (1994), OECD Job Study, Paris (OECD).Google Scholar
  32. OECD (1999). Assessing Performance and Policy-Implementing the OECD Jobs Strategy, Paris (OECD).Google Scholar
  33. Pigou, A. C. (1932). The Economics of Welfare, London: Macmillan.Google Scholar
  34. Platteau, J.-P. (1996). "Mutual Insurance as an Elusive Concept in Traditional Rural Societies." Journal of Development Studies 23(4), 461–490.Google Scholar
  35. Platteau, J.-P. (1999). Traditional Sharing Norms as an Obstacle to Economic Growth in Tribal Society. In Platteau J. P. (ed.), Institutions, Social Norms, and Economic Development, Chapter 5, Chur (Harwood Academic Publisher).Google Scholar
  36. Ravallion, M. (1997). "Famine and Economics." Journal of Economic Literature 35(3), 1205–1242.Google Scholar
  37. Rodrik, D. (1999). "Where did all the Growth go? External Shocks, Social Conflict, and Growth Collapses." Journal of Economic Growth 4, December, 385–412.Google Scholar
  38. Sen, A. (1998). "Economic policy and equity: An Overview." In V. Tanzi, K. Chu and S. Gupta (eds.), Economic Policy and Equity, Washington, D.C.: International Monetary Fund.Google Scholar
  39. Sinha, S. and M. Lipton. (1999). Undesirable Fluctuations, Risk and Poverty: A Review, Draft, World Bank (mimeo), October.Google Scholar
  40. Siegel, P. and J. Alwang. (1999). An Asset-based Approach to Social Risk Management-A Conceptual Framework, Social Protection Discussion Paper No. 9926, The World Bank, Washington, D.C.Google Scholar
  41. Silver, H. (1995). Reconceptualizing Social Disadvantage: Three Paradigms of Social Exclusion. In G. Rodgers, Ch. Gore and J. B. Figueiredo (eds.), Social Exclusion, Reality, Responses, Geneva (IILS), 57–80.Google Scholar
  42. Sinn, H.-W. (1995). "A Theory of the Welfare State." Scandinavian Journal of Economics 97, 495–526.Google Scholar
  43. Sinn, H.-W. (1998). Social Insurance, Incentives and Risk-taking. In P. B. Sørensen (ed.), Public Finance in a Changing World, London: Macmillan, 73–100.Google Scholar
  44. Stiglitz, J. E. (1975). Information in Economic Analysis. In M. Parkin, and A. R. Nobay (eds.). Current Economic Problems, Cambridge: Cambridge University Press.Google Scholar
  45. Stiglitz, J. E. (1988). Economic Organization, Information and Development. In H. Chenerey and T. N. Srinivasan (eds.), Handbook of Development Economics, Vol. I, Amsterdam, North Holland, 94–160.Google Scholar
  46. Tanzi, V. (2000). Globalization and the Future of Social Protection, IMF Working Paper, WP/00/12, January.Google Scholar
  47. Udry, C. (1990). "Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy." The World Bank Economic Review 4, 251–269.Google Scholar
  48. Udry, C. (1994). "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria." Review of Economic Studies 63, 495–526.Google Scholar
  49. Vos, R. and E. de Labastida (1998). Economic and Social Effects of "el niño" in Ecuador, 1997–98, FirstWorkshop of the LACEA/IDB/World Bank Inequality and Poverty Network, Buenos Aires, October 22–24, 1998.Google Scholar
  50. Walker, T. and J. Ryan. (1990). Village and Household Economies in India's Semi-Arid Tropics, Baltimore: John Hopkins University Press.Google Scholar
  51. World Bank (1994). Zambia Poverty Assessment, Human Resource Division, Southern Africa Department, Africa Regional Office.Google Scholar
  52. World Bank. (2000b). Dynamic Risk Management and the Poor-Developing a Social Protection Strategy for Africa, revised draft, October.Google Scholar
  53. World Bank. (2000a). World Development Report 2000/01–Attacking Poverty, Washington, D.C., The World Bank.Google Scholar
  54. World Bank. (2001). Social Protection Sector Strategy-From Safety Net to Springboard, Washington, D.C., The World Bank.Google Scholar

Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Robert Holzmann
    • 1
    • 2
  • Steen Jørgensen
    • 1
  1. 1.The World BankN.W.
  2. 2.University of SaarlandGermany

Personalised recommendations