Social protection for the poor in Latin America

Abstract

Confronted with recurrent macroeconomic shocks, governments in Latin America and the Caribbean have increasingly been concerned about establishing or strengthening systems of social protection and safety net programmes. The goal of these programmes is to help mitigate the impact of shocks on the poo or before they occur, and to help the poor cope with the shocks once they have occurred. In this paper, we focus on publicly funded or mandated safety nets functioning as risk-coping mechanisms. The paper reviews the characteristics of a good safety net, in comparison with the main types of safety nets currently in place, and finds in general that no single programme meets all of the criteria in terms of efficiency and effectiveness, although some are better than others. Finally, what has been the actual record in terms of protecting the poor through targeted public spending during crises? The paper finds that because of fiscal constraints during a crisis, social spending is often pro-cyclical when ideally it should be counter-cyclical. Ironically enough, social protection spending itself does not appear to be protected.