Poverty in a time of climate change: bringing social protection back into the picture

Last week, the UK Foreign, Commonwealth and Development Office (FCDO) released its new White Paper on “International development in a contested world”. With some caveats, this has been welcomed by NGOs and others working on global development. It marks a return to a vision of poverty reduction as the ultimate meaning of development and the ‘primary purpose’ of UK aid; talks about the importance of partnerships; and draws the necessary connections between development challenges, particularly climate change and extreme poverty.

Among other things, the White Paper is notable for its discussion of social protection: that is, policies and programmes that are designed to protect poor and vulnerable people from shocks and stresses throughout their life cycle. In previous decades, the UK was an innovative leader on this agenda, supporting the transplantation and adaptation of effective cash transfer programmes from middle-income countries in Latin America to lower-income countries in Africa, Asia and the Middle East. Apart from financing social protection programmes, the UK Department for International Development (DFID), as it then was, helped fund rigorous research and evaluation (some of which has been led by our own teams here at Oxford Policy Management). This built the evidence case which showed that social protection could be an effective and affordable policy option for low-income countries, with the potential to help governments achieve a range of social and economic objectives.

In recent years, however, the UK has been less prominent in making the case for social protection. The International Development Strategy launched 18 months ago made no mention of the topic. By contrast, the White Paper devotes a considerable portion of chapter 6 (‘ensuring opportunities for all’) to what social protection can do. It argues that social protection is ‘one of the most effective ways to address the needs of marginalised groups’ and that, after its role during the COVID pandemic, ‘the case for investment in social protection has never been stronger’.

References to social protection in other chapters on other topics reinforce this commitment. There is particular focus on the potential for scalable social protection to reduce the burden on the humanitarian system. Social protection targeting and delivery systems can be used to get assistance to people in advance of shocks such as floods or drought, or immediately afterwards, to help them to prepare better and recover faster. This should make for a more timely and cost-effective use of money than an appeal-based humanitarian response assembled only once a disaster has occurred. The White Paper makes a good case that shock-responsive social protection “should be at the centre of international development, humanitarian and climate efforts”.

In short, then, there is a great deal to welcome in the White Paper’s discussion of social protection. There are however some points that are not addressed, or where the arguments could do with some refining.

The first, which cuts across the White Paper as a whole, is about the gap between vision and resources. The White Paper seeks to find ways to spend money better but does not commit to a timeframe for returning the UK aid budget to 0.7% of GNI. While talking about the need for, and positive potential of, a whole-of-government approach to international development, it does not address the fact that the decision to classify spending on supporting refugees in the UK as international aid has significantly exacerbated the negative impact of the aid cuts. (In 2022 this spending accounted for £3.7bn, or 29% of the aid budget).

The tension between the vision of the White Paper and the resources available to implement it matters for social protection. In many low- and middle-income countries, social protection was a latecomer to government planning and budget processes and receives much less funding than other sectors. UK development cooperation rightly emphasises the need to build national systems to deliver social protection which will be funded from taxation, not aid: but getting to this point will take time in the countries where it is needed the most. As with health and education sector funding, there may be a case for spending UK aid on social protection delivery, as well as systems strengthening and institutional capacities. It is not clear however that the UK aid budget will be in a position to support significant expansion of social protection provision, even if it is seen as an effective use of money.

Interestingly, the White Paper makes only passing reference to how social protection might contribute to improvements in health. High out-of-pocket costs for treating serious injury or illness are one of the commonest factors driving vulnerable households into poverty; conversely, avoiding these immiserating costs is one reason people do not seek the care they need. Social protection can play a role in mitigating this risk; the solutions are not always straightforward, but a number of countries have found ways to make health insurance affordable for the poor.

The final cautionary note is to set realistic expectations, balancing the case for what social protection could do against what a given system should be asked to do. In different contexts, social protection programmes with mechanisms for identifying the poor and delivering benefits have been used as the foundation for livelihoods programmes; tweaked to support girls’ education or the empowerment of women in intra-household relations; designed to build resilience to shocks and respond rapidly when a shock hits; or indeed linked to climate change adaptation or - more ambitiously - mitigation. (A recent paper by Abhijit Banerjee and others provides a good round-up of the evidence on design choices).

All of these are possible, but loading too many of these objectives onto a single programme may reduce its ability to perform its core function well without first strengthening systems - particularly in contexts with weak government institutions. There is an impeccable logic to making a scalable safety net central to anticipatory action or early response to a crisis, but institutional capacities and real-world incentives often make it very hard to redirect funds that would have gone to humanitarian response into these existing social protection systems.

None of these points should detract from the significance of the White Paper language on social protection. It has been a long time since social protection has been discussed at this level in this positive light, as a core part of the UK toolbox for addressing inter-linked challenges of poverty and climate change. Translating this understanding into action will however require sustained effort, evidence, diplomacy – and resources.