e-journal
Financing Social Policy
Summary.
In her concluding remarks to the workshop, Hujo suggested that one useful way to approach the financing
of social policy was through the lens of the multiple roles of social policy, and that this conceptual framework could be especially useful for empirical research at the country level. Exploring how social policy
influences the productive and reproductive economies, and how it impacts on redistribution and protection,
draws attention to linkages and possible synergies between social and economic policy, which can only be
exploited if both areas are integrated into a comprehensive policy framework from an early stage. This demands going beyond the short-term emergency approaches of mainstream debates and developing a long-term development strategy with a clear vision of both the role of social policy and the kind of political and social coalitions that are needed to promote this strategy.
The presentations and discussions at the workshop pointed toward several challenges—macroeconomic, political and global—for financing social policy. The macroeconomic challenge is twofold: first, to move toward a new economic model, which promotes income creation and employment; and second, to manage and allocate resources in a way that is conducive to social development. This second challenge is especially demanding with regard to foreign exchange inflows, due to their complex effects on macro variables and the rather limited effectiveness of policy tools in developing countries.
Regarding politics, the key challenge is to foster a national consensus on social policy and corresponding financing mechanisms based on universalism and equity. Yet without adequate state capacity and reliable mechanisms to hold decision makers accountable, it is difficult to raise revenues, guarantee a fair and transparent budget process, and deliver benefits and high-quality social services. In general it was acknowledged that expanding coverage and socioeconomic rights is part of a democratic and inclusive development process.
Nevertheless, this poses significant challenges in developing countries due to their internal economic and political structures, and their peripheral position relative to world markets and politics. Finally, financing social policy has an important global dimension, as illustrated by multiple projects and programmes
of donors and international organizations. In this area, Hujo said, the research project would aim to
do the following: focus on aspects of global and regional governance; analyse the potential of innovative financing mechanisms; bring new perspectives to old instruments like aid; and explore the impact of the global economy on policy space in developing countries.
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