AFFORDABILITY OF SOCIAL PROTECTION MEASURES IN POOR DEVELOPING COUNTRIES – 111 PROMOTING PRO-POOR GROWTH: SOCIAL PROTECTION- © OECD 2009 Affordability of Social Protection Measures in Poor Developing Countries

Decisions on the affordability of social protection measures should be informed by an assessment of their short and medium term impacts and the economic benefits they bring at household, local economy and national economy levels. They should be taken in inclusive country level policy-making and budgetary process, based on country-specific analysis and situated within an overall national social policy framework. Social protection programmes constitute an affordable investment in poverty reduction and an effective stimulus to pro-poor growth- even for the poorest countries. Costs are modest relative to overall public expenditure budgets and programmes can be built up incrementally. Evidence on impact shows that even small and local programmes produce positive benefits. The possibility of starting small and building can facilitate the affordability debate by allowing programmes to be started with relatively modest initial allocations and experience from these can provide a sound evidence base for expanding programmes and funding allocations in the future. Donor and government actions can strengthen the affordability of social protection. Managing and reducing fiduciary risk is critical for affordability. Effective government action to improve public financial management is essential for scaling up smaller social protection initiatives and replicating them through the mainstream public service. Donor should move away from delivering social protection through their own financing and delivery mechanisms towards funding national programmes through joint financing instruments, thus supporting the capacity of government and civil society to develop national social protection policies and deliver the programmes that implement them