Subscribe to the Healthy DEvelopments Newsletter

Parallel session 3.1: Sustainable and equitable social protection financing to reduce inequalities

This session was hosted by the International Labour Organization (ILO).

Valérie Schmitt, Deputy Director, Social Protection Department, ILO Geneva, moderated a discussion between the following panelists:

  • Florian Juergens-Grant, Global Social Protection Advisor for Women in Informal Employment: Globalizing and Organizing (WIEGO)
  • Yona Phiri, Chief Economist, Ministry of Finance and Economic Affairs, Malawi
  • Delphine Juliette Prady, Senior Economist, Fiscal Affairs Department, IMF
  • Dr Magdalena Sepúlveda, Executive Director of the Global Initiative for Economic, Social and Cultural Rights 
  • Aminata Sow, Délégué General, DGPSN, Senegal

The discussion focused on the redistribution potential of a social protection expenditure policy financed in a socially just and sustainable way. Panelists considered the advantages of a joint analysis of fiscal and social protection policies, as well as opportunities arising from social dialogue on policy design and implementation, guided by a rights-based approach and international social protection principles.

For social protection systems to effectively prevent poverty and reduce inequalities, sustainable and equitable financing needs to be provided, as far as possible, through domestic resources. Panelists explored strategies for domestic resource mobilisation, such as reallocating public expenditures (e.g. reducing fossil fuel subsidies), strategies to increase tax revenues by broadening the tax base and enhancing compliance, tackling illicit financial flows, extending social insurance coverage and contributory revenues, and additional borrowing and/or debt restructuring.

Securing domestic financing goes hand in hand with extending coverage, enhancing adequacy and addressing inequalities, as sustainable and equitable financing mechanisms require broad support from taxpayers and contributors. For this reason, rights-based universal social protection systems that provide comprehensive protection over people’s life course and adequate access to benefits when needed are a pre-condition for strengthening domestic financing in a sustainable and equitable way. Such systems not only provide the basis for preventing poverty, but are also essential in reducing vulnerability and multiple inequalities (vertical and horizontal) and fostering social cohesion and resilience.

In order to get there, an integrated policy approach is necessary which considers social protection policies together with policies to support decent and productive employment, sustainable enterprises and conducive macro-economic policies, which support just transitions to environmentally sustainable economies and societies.

For many low- and middle-income countries, limited social protection coverage is both a cause and a consequence of high levels of informality, which also constrains the capacity of governments to expand fiscal space for social protection and other public policies. Policies to extend social protection coverage through both contributory and non-contributory mechanisms and policies to facilitate the formalisation of enterprises and employment need to go hand in hand to ensure the sustainable and equitable financing of universal social protection systems, as to effectively prevent poverty and reduce inequalities.

© GIZ/Steffen Kugler
Scroll to Top