Social Safety Net - General Overview

General Overview

Safety nets are part of a broader poverty reduction strategy interacting with and working alongside of social insurance; health, education, and financial services; the provision of utilities and roads; and other policies aimed at reducing poverty and managing risk.

Safety net programs can play four roles in development policy:-

• Safety nets redistribute income to the poorest and most vulnerable, with an immediate impact on poverty and inequality
• Safety nets enable households to make productive investments in their future that they may otherwise miss, e.g. education, health, income generating opportunities
• Safety nets help households manage risk, at least offsetting harmful coping strategies and at most providing an insurance function which improves livelihood options
• Safety nets allow governments to make choices that support efficiency and growth

The safety net as a whole should provide coverage to three rather different groups:-

The chronic poor

Even in "good times" these households are poor. They have limited access to income and the instruments to manage risk, and even small reductions in income can have dire consequences for them.

The transient poor

This group lives near the poverty line, and may fall into poverty when an individual household or the economy as a whole faces hard times.

Those with special circumstances

Sub-groups of the population for whom general stability and prosperity alone will not be sufficient. Their vulnerability may stem from disability, discrimination due to ethnicity, displacement due to conflict, "social pathologies" of drug and alcohol abuse, domestic violence, or crime. These groups may need special programs to help them attain a sufficient standard of well-being.

Figure A: Processes and Stakeholders Involved in a Safety Net Program

The effectiveness of a safety net intervention lies in the details of the implementation process and stakeholders’ involvement therein (Figure A). An adequate transfer program incorporates at least a system to target beneficiaries, to register them, to set up program conditionalities, to make payments, and to monitor and evaluate its performance. Moreover, a stakeholders’ strategy that clearly assigns specific tasks and responsibilities for each agent is critical for program success. It is important to acknowledge that every intervention is unique in its complexity, needs to be adapted to local circumstances, and requires a fluent communication mechanism and a solid data process system.