What is shock-responsive social protection?
We are living in a world in which crises are becoming more complex, frequent and last longer.
In 2022, one quarter of humanity lived in conflict affected areas (UN, 2022). At the same time, an increasing number of countries are involved in conflicts and conflicts last longer now than 20 years ago (UNICEF, 2020). But these are only a couple of human hazards we are increasingly confronted with. The COVID-19 pandemic has well shown how sensitive we and the systems we live in are to these type of hazards. In addition, an increasing number of people are affected by natural disasters (Ritchie and Roser, 2014).
The consequences of these human and natural hazards are devastating. Estimates cited by (Bloomberg, 2022) show that there are five million deaths linked to climate change each year. In addition, there were approximately 100,000 conflict-related deaths in 2021 (Ritchie and Roser, 2022). Moreover, 59.1 million people were living in internal displacement as a result of conflict and violence as well as disasters by the end of 2021, and there are an additional 30.5 million refugees and asylum seekers (Migration Data Portal, 2022). Climate change also causes the destruction of 11 million homes per year (ShelterBox, 2021) and may cost cities worldwide $314 billion each year (World Bank, 2019).
Sadly, it is the vulnerable and fragile population which is most affected by this ever more complex environment. A study by the World Bank from 2019[], for example, shows that the impact of natural disasters and climate change for poor households are twice as significant as the ones for non-poor households, which is mainly driven by the fact that they are less resilient. The lower resilience of poorer people is due to them having limited savings, assets and also limited access to social protection and information. The higher vulnerability of fragile countries become also visibility when analyzing the ranking of countries on the widely used ND-GAIN or Risk Inform Index, two indices which measure countries’ exposure to risks and climate change. It is the fragile countries which rank lowest on these indices. The higher exposure of poor and vulnerable countries also becomes visible in the distribution of displaced people. Low- and middle-income countries host 74 % of the world’s displaced population (UNHCR, 2022).
Shockingly enough, children face direct and indirect effects. 41 % of the displaced population is below 18 years old (UNHCR, 2022), nearly 50 % of educators say climate change is/will affect their school (EducationWeek, 2022), and 450 million children are living in conflict-affected areas (OHCHR, 2022). In addition, children are twice as likely to be extremely poor (World Bank-UNICEF, 2020). These numbers speak for themselves but can be fostered by a large number of studies. A study by Kadir et al. (2018), for example, shows that there are many direct and indirect effects of conflict on children. The direct effects involve death, physical and psychological trauma, but also displacement. The indirect effects consist of inadequate and unsafe living conditions, environmental hazards, caregiver mental health, and separation from family, displacement-related health risks, destruction of (public) health, education and economic infrastructure. These effects on children imply that there are secondary and long-lasting impacts of human and natural hazards, which can generate vicious circles.
What are shock-responsive social protection systems?
If you think about it, social protection systems talk to risks by nature. The ultimate goal of these systems is to prevent, reduce and eliminate economic and social vulnerabilities to poverty and deprivation (UNICEF, 2013). There are different types of social protection, such as non-contributory (social assistance and care) and contributory (social insurance) social protection, but also active and passive labor market policies (training, job search, sickness benefits). Social protection is an investment in the future of people and build, protect and employ (World Bank, 2022).
So, what exactly are shock-responsive social protection systems? They are an adaption of routine social protection systems to cope with shocks (ex-ante and ex-post) (European Commission, 2019). Their aim is to prepare for, cope with and recover from shocks and stresses (UNICEF, 2019). There are different types of shock-responsive social protection systems, such as vertical expansion, horizontal expansion, piggybacking, shadow alignment, and refocusing. The best about shock-responsive social protection is that they are cost-efficient. Some studies show that they can result in savings of up to 30 % of humanitarian spending (Cabot Venton, 2018). To name a concrete example, 1 US-Dollar in drought investment saves 3 US-Dollar in humanitarian aid (ibid).
How can we implement shock-responsive social protection?
There are three ways to address shock-responsive social protection programs: before a shock occurs, immediately after a shock occurs, and in the middle- and long-run after people have been affected by a natural or human hazard. Let’s have a look at each one of them to get a better grasp of these!
Ex-ante Implementation. Ex-ante implementation means trying to invest in the resilience of households (or ultimately systems as a whole). How can you do this? First, by increasing access of the most vulnerable population to social protection programs. Importantly, the poor population might not coincide with the share of the population most exposed to a potential natural or human hazard. This is why shock-responsive social protection programs requires a careful reflection on who potentially affected people are, and a thorough reflection of existing targeting strategies. Next, encourage households to save and invest in their financial literacy and inclusion. This is important, as savings might help them to deal with a crisis and get over it better, with less self-harm. Lastly, increase their access to relevant information on how, why and when to prepare. Many poor people in Paraguay, for example, live in areas which are subject to flooding or other natural disasters. They move their without knowing, and when a flood hits, they are often unprepared and were not warned.
Ex-post Implementation. Ex-post implementation means increasing the capacity to cope, which ultimately helps to encounter negative coping mechanisms of vulnerable households. My previous point on investing in the saving capacity of households is related to the fact that vulnerable households often cut back on their consumption instead of coping with consumption smoothing. Consumption smoothing means that you save income during good times and then use these savings to finance your consumption (such as for food) in challenging times. The pandemic is a perfect example here. Let’s assume you are facing a personal illness or losing your job due to an economic recession triggered by a pandemic. If you have savings, you can rely on them to finance your spending for a certain period of time. If you do not have savings and also no access to social protection systems, you might just cut back on your spending. In the most extreme cases, this might result in food rationing, or replacing healthy food by cheaper one. Other negative coping capacities are taking their children out of school into child labor, or selling assets instead of accessing insurance mechanisms. You can encounter these negative coping mechanisms by granting people access to social protection mechanisms. Examples are topping up cash transfers, or increasing the beneficiary base of existing social protection programs in times of crises.
Middle- and long-run. In the middle- and long-run we might want to increase the capacity to adapt and encounter unplanned adaption. The best example for unplanned adaption is forced displacement. Instead of forced, unplanned displacement, which further exposes people already affected by a potential shock, one might incentivize planned migration out of affected areas. If we give affected populations the tool to adjust assets and livelihood, they might escape chronic poverty and structural vulnerability. Lastly, reducing vulnerabilities to risks in the long-run can decrease maladaptation. There are several entry points for shock-responsive SPs from the side of the government, but also other key stakeholders, the civil society and NGOs. They can invest in evidence generation on who is vulnerable and what works. They can revise programs and analyze them for risks and vulnerabilities. Another possibility is to – from the start, when designing programs – increase their resilience, coping mechanisms and adaptability ex-ante and ex-post. Lastly, it is possible to invest in crisis and disaster risk financing and resilience as well as emergency preparedness. Moreover, shock-responsive social protection requires strong inter-agency coordination, inter-agency system-wide strategies, clear procedures, and lastly partnerships.
The road ahead
There is still a lot we can do in the area of shock-responsiveness, a field which has definitely grown since the COVID-19 outbreak. Still, much more is needed, and concrete practical examples of shock-responsiveness are still limited. So, if you have the chance, push for the implementation of these types of programs both ex-ante, ex-post but also in the middle- and long-run!