An Asian Welfare State Model? East and South Asian

trajectories and approaches

Gabriele KöhlerDevelopment economist

Conference on Re-Thinking Asia II“Building New Welfare States:

What Asia and Europe can learn from each other” Protestant Academy Tutzing

28-29 October 2013

I.) Premises of the discussion

• Growing social inequalities in Asia and Europe– Despite commonly accepted fundamental values and ideals

• Need for a progressive counter-narrative to– Tackle social inequalities – Make social justice available to all – Reduce income inequality and unequal opportunities– What role do comprehensive social security systems play

• Hence: revisit the welfare state

Source: FES invitation

II.) Preliminariessocio-economic trends

Vulnerability, poverty, informality

South

Africa

Brazil

Mala

ysia

Argentina

China

United St

ates

Russian

Federa

tion

Philippines

Nigeria

Singa

pore

Thail

and

Sri La

nkaJap

anIndia

Indonesia

Greece

Bangla

desh

Canad

a

United Kingd

om

South

Korea

Lithuan

ia

Switz

erlan

d

Finlan

d

Australi

a

German

y

Norway

Austria

Denmark

Swed

en0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

63.6

56.4

49.2

48.3

46.9

46.4

45.1

44.5

43.7

42.5

42.0

40.2

37.6

36.8

34.3

34.0

33.4

32.4

32.0

31.6

30.9

30.9

30.3

29.3

27.0

25.6

25.0

24.0

23.0

High income inequalitiesGini coefficient

Asia-Pacific: people deprived

Source: Asia-Pacific Regional MDG report 2011/12 (ESCAP/ADB/UNDP)

III. Welfare state trajectories

Welfare state definitions

Two -three – four – five pillars1. Education2. Health access3. Social security and social

assistance 4. Active labour market policies5. Family policy - welfare services

9

Pillar I:Education Pillar II:

Health

Pillar III:Social security

Welfare state politics• Nation building• Demographic factors• Economic progress• Productivity enhancement• Economic compensation – anti-poverty • Enhancing the domestic market • Political co-optation of subordinated classes by elites• Guilt or security concerns of the elites• Political stability • Political pressure from trade union movements or “grassroots”• Socio-cultural values and changing welfare provision arrangements • Norms• Peer competition• Copycatting • ….

Social policy as a process driven by power relations

The North: welfare state history

• Germany Bismarckian reform: 1870s• US New Deal: 1930s• Japan interventionist welfare state: post WWII• UK: Keynes and Beveridge 1950s• Northern, Central Europe, Southern Europe

welfare states: since 1950s

The South: welfare state history

• Latin America in 1910-1920s– Uruguay, Argentina, Chile, Brazil, Costa Rica

• Sri Lanka 1930s• South Asia – Constitutions of 1940s/1950s

The South: recent developments

IV. Four types of welfare states?

“Developmental welfare state I”

Japan, Republic of Korea 1st phase, Taiwan PoC, Hong Kong SAR, Singapore, Malaysia• Social policy subordinate to

economic development• Low government spending•Means tested, frequently conditional

“Developmental welfare state II”

Korea:• New social contract after 1997 – democracy

and response to Asian financial crisis• National Basic Livelihood Security Act 1999:– right to social assistance– universalised – guaranteed social minimum

17

Program Name

BLT Unconditional Cash Transfer

(2008-09)

Raskin Rice for the Poor

Jamkesmas

Health Protection

BSM Scholarship for the Poor

PKH Conditional

Cash Transfer

TransferType

Cash Subsidized

Rice

Health service fees

waived Cash

Cash & Conditions

Targetgroup (HHs)

Poor & near poor HHs

Poor & near poor HHs

Poor & near poor HHs

Students from poor

HHs

Very poor HHs

Number of beneficiari

es 18.7 Mn HHs

17.5 Mn HHs

18.2 Mn HHs 8 Mn

Students1.5 Mn HHs

Benefitlevel

IDR 100,000 per month

15 kg rice per month

Unlimited IDR 480,000

per year

IDR 1,287,000 per year

Key executing agency

Ministry of Social Affairs

(MoSA)

Bureau of Logistics (BULOG)

Ministry of Health (MoH)

MoNE & MoRA

MoSA

Indonesia: recent social assistance programmes

18

o To raise the average food expenditure of poor households

o To increase school enrollment and attendance

o To improve preventive health care for pregnant women and young children

o To reduce child laboro To encourage parents to invest

in their children’s (and their own) human capital: health and nutrition, education, and participation in community activities

Philippines: conditional cash transfer

Geographical Targeting

Household Assessment (Enumeration)

Selection of Poor Beneficiaries using Proxy Means Test

Eligibility Check

Selection Procedures of Target Households

“Developmental welfare state II”

China: • Disconnect between urban and rural coverage• Selective social contract: Minimum Subsistence

Guarantee – for urban populations in 1999 – response to market

reforms– extended to rural populations in 2008– does not cover migrants

• Rural cooperative medical insurance scheme– universalised 2013

“Developmental welfare regime III”

South Asia: Bangladesh, India, Maldives, Nepal, Pakistan, Sri Lanka

• Norms-based• Strong social inclusion angle• Mixture of means-tested and universal• Rights-based• Justiciable (notionally)

Food-related measures

Social Assistance

Public works

Affirmative action

Human rights

•Cooked school meals (IND)•Subsidized PDS (IND, NPL, BGD)•Subsidized grain prices

•Universal old age pension (NPL)•Benazir Income Support Program (PAK)•Child benefit (NPL)•Unorganized sector health insurance (IND)

•National Rural Employment Guarantee (IND)•Employment Generation Programme for the Poorest (BGD)•Karnali Programme; Employment Guarantee Act (NPL)•Employment generation for rural unskilled workers (PAK)

•Secondary school stipend for girls (BGD)• Education for all (NPL)•Child grants for girls (IND)•Rural development and community based interventions (IND)

•Right to food/National Food Security Act (IND)•Mid-day meal (IND)•Right to education (all)•Right to health services (all)•Right to work (IND)•Right to information (IND, BGD, NPL)

Social protection panoramaSouth Asia

“Developmental welfare state IV”

Dismantling: Europe 2005 onwards• Partial deterioration of entitlements• Means testing reintroduced• Conditionalities

Examples:• Hartz IV in Germany• Child benefit in UK

V. Welfare expenditures

Japan

Republic

of Korea

China

Vietnam

Malaysi

a

Thail

and

Singa

pore

Sri La

nka

Philippines

Nepal

Bangla

desh

Indonesia

0

5

10

15

20

25

19.2

7.9

5.4 4.73.7 3.6 3.5 3.2 2.5 2.1 1.4 1.2

% o

f GDP

Total Social Protection Expenditure, as % of GDP

V. Propositions

Proposition I

Each country has a trajectory of a developmental welfare state, but its characteristics differ as a function of power politics– Some are purely instrumental for nation building,

growth, social appeasement– Others are progressive, as outcome of pressure

from formal sector trade unions, informal sector or rural cooperatives, women's movements, social or faith-based CSOs

Proposition II

Common perception: welfare states were invented in Europe

• In fact, types of welfare states existed in the South before the North– Latin America had welfare state elements in the

1910s– Sri Lanka– “Zeitgeist” for welfare states: see post-war

Europe, independent South Asia

PropositionIII

Convergence in Asia:• 1st new wave: East Asia post 1998 economic

crisis with new social policies• 2nd new wave: rights-based or notionally

universal welfare states South Asia, South Korea, Southeast Asia and China, since early 2000s

PropositionIV

Divergence South-North:• While “Asia” is moving towards nascent

universalist developmental welfare states (at modest level of coverage and benefit levels)

• Europe is moving towards a top-down welfare state (with remaining high coverage, but decreasing real entitlements, more conditionalities, and widespread public resentment)

Selected referencesAsian Development Bank, 2013. The Social Protection Index. Assessing Results for Asia

and the Pacific. ADB Manila.Köhler, Gabriele and Deepta Chopra, eds., 2014. Development and Welfare Policy in

South Asia. LondonMkandawire, Thandhika, ed., 2005. Social policy in a development context. UNRISD.

Geneva, LondonPierson, Chris 2005. Late industrializers and the development of the welfare state, in

Mkandawire, op. cit.Porsche-Ludwig, Markus 2013. Sozialpolitik in Asien. Ein Handbuch der Staaten Asiens

von A-Z. LitVerlag Berlin: W HopfRingen, Stein and Kinglun Ngok, 2013. What Kind of Welfare State is Emerging in China?

UNRISD working paper 2013. www.unrisd.orgRingen, Stein, Huck-ju Kwon et al, 2011. The Korean State and Social policy. Oxford: OUPUNRISD, 2010. Combating Poverty and Inequality. Structural Change, Social Policy and

Politics. GenevaWehr, I., Leubolt, B. and Schaffar, W. 2012. ‘Welfare regimes in the Global South: A short

introduction’, Austrian Journal of Development Studies, Welfare Regimes in the Global South, 28(1), pp. 6-13 .

Contact informationGabriele Köhler

Website: www.gabrielekoehler.netEmail: office@gabrielekoehler.net

Development and Welfare Policy in South AsiaEdited by Gabriele Koehler and Deepta Chopra Routledge, February 2014http://www.taylorandfrancis.com/catalogs/environment_and_sustainability/1/2/