After the period of structural reforms, the new pattern of social policies in the 21 st century was characterized by the number and variety of social assistance programs.
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While social insurance policies were designed for formal workers and linked to their previous contributions, social assistance policies break the link between social protection and the labor market Social assistance programs included non-contributory pensions and conditional cash transfers CCT.
The existence of conditionality, target groups and means-testing is often part of their design, and both of them are financed with revenues from general taxes and contributions. In spite of the general tendency to develop social assistance programs, they cannot be taken as politically homogeneous.
She highlighted the need to understand such variations based on the political and institutional frameworks into which social assistance programs are inserted. Comparing those programs based on the achievement of certain principles security, paternalism, rights-not-charity, family neutrality she concluded that most of the ongoing programs are far from being a rights-based policy.
Only universal or quasi-universal programs Renta Dignidad in Bolivia and Rural Pensions in Brazil are not subjected to discretionary selection mechanisms.
- Books by Juan Yermo.
- Keeping the Promise of Social Security in Latin America (Latin American Development Forum);
- Charles Goodyear: The Great Vulcanizer (Titans of Fortune).
- Spanish American wars of independence - Wikipedia.
However, Latin American and Caribbean social programs do not achieve family neutrality because most of them are based on income testing at the family-level rather than for individuals. For example, in Brazil, noncontributory pensions are legally set at the same level as the minimum wage and in recent years have been raised at a rate above inflation, which may account for the significant reduction in poverty levels among eligible rural households. The success of Latin America in reducing poverty and increasing coverage has been attributed to the transformation of its social protection matrix.
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A comparative study of 19 countries 18 concluded that the main trends of this change are the expansion of state action resulting in broader coverage; partial or full re-nationalization; increased social spending; and a combination of vectors of need, supply and demand to determine investment and fiscal effort. The undoubtable expansion of social protection is reported by Cecchini et al.
Source: reproduced from Cecchini et al. These results occurred in a very favorable economic context, a period in which GNP and employment levels rose. However, after the economic crisis in , these trends have stagnated or are retrograding in countries like Brazil. Economic limits to the expansion of social protection are threatening the progress of welfare in the region.
The decline was slower between and a cumulative decrease of 5. Some countries that presented an outstanding performance in poverty reduction between and have confirmed the trend of exhaustion of this redistributive model. To conclude, we can highlight some remarkable characteristics and challenges for social protection in Latin America:. Expansion of coverage and poverty reduction in the region are noteworthy, in particular with the increase of noncontributory or semi-contributory pensions, cash transfers for families with children, primary education enrollment, and access to health services;.
The result of this complex web of social programs was more social inclusion and poverty reduction but in a fragmented welfare system that faces difficulties to go further in a less favorable economic context;. The general trend to universalization cannot disguise the enormous differences among social policies regarding their capacity to enhance citizenship and assure rights to benefits at sustainable and adequate levels. Universal coverage in fragmented systems is distinct from rights-based policies and may preserve stratification, paternalism, discretionary selections, and insecurity.
Coverage that does not entitle rights is more likely to be retrograde, by linking government to beneficiaries who act as sheltered clients, rather than creating solidarity and social bonds;. Low public investment in social policies that are considered pivotal for human development, as health and education, demonstrates the lack of an integrated approach to welfare in the region. Cash transfers for families with children require their enrollment in school and in health care preventive programs, but public expenditure in these areas have not been treated as a priority;.
In the same period, public social expenditure has increased only from 3. Cash transfers represented an important innovation in approaches to social protection, targeting poor people and improving their living standards using fewer resources. However, given the multi-dimensional natures of poverty and misery, they are resilient and cannot be addressed by means of one-off measures.
This kind of innovation introduced more flexibility in the social policy matrix and could create a safety net to mitigate poverty risks, but to be effective and resistant they must be integrated into a comprehensive welfare system. Only by aligning all benefits with social rights will it be possible to assure stability and equity in periods of economic restrictions;.
Relationships among the state, market and community in the region have been redrawn by social policies by reducing inequalities, legitimating democratic governments and introducing millions of consumers to the market. The emergence of a new middle class was proclaimed as a requirement for consolidating democracy in the region. Nevertheless, the inability to meet the rising expectations of emergent consumers has generated frustrations and disenchantment with democracy.
The lack of strong public policies in education, housing, health and labor has been responsible for recent uprisings in countries that were considered benchmarks in fighting poverty like Chile and Brazil. Due to the poor quality of public universal systems of health care and education the poor and young are not able to compete with the same opportunities. Besides, social policies have been unable to interfere in labor market dynamics, which gives rise to permanent insecurity and marginalization;.
This fragmented Welfare State has another important characteristic that causes enormous obstacles to universalizing social rights for all citizens. Financial restrictions to the appropriate funding of public systems and a market oriented bias in public policies gave birth to a mixed arrangement, where public funds are assigned to contracted private management and service providers while public entities are increasingly neglected.
This arrangement led to new forms of re-commodification, and reinforces the opinion that only private services are efficient. To conclude, one can affirm that the Welfare State in Latin America has undergone different models of structural reforms in the final two and a half decades of the twentieth century while, in the first decades of the 21 st century, a more diversified, inclusive and universalized matrix has begun to emerge.
These innovations have been effective in reducing poverty but are still distant from the ideals of forging a democratic society based on social rights, solidarity and assuring the same opportunities to all citizens. Paradoxically, one can observe the existence of benefits without rights cash transfers and rights without benefits health and education as signaled by Fleury Moreover, this model of fragmented and stratified inclusion seems to be reaching the point of exhaustion and is unable to progress in a period of lower growth in the region.
Threats to cut benefits will reduce legitimacy for democracies, unless the inner core of expanded citizenship is restored as part of a public commitment to guarantee equal rights and opportunities to all. Mesa-Lago C. Social security in Latin America: pressure groups, stratification and inequality. Pittsburgh: University of Pittsburgh; Filgueira F. Welfare and democracy in Latin America: the development, crises and aftermath of universal, dual and exclusionary social states. Filgueira F, Luna JP. Societies, social policies and political representation: a Latin America perspective.
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The Vicissitudes of the Latin American State (Interview)
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Changing welfare states. During the total contribution rate was gradually raised back to its original value 11 percent. The contribution rate in the Dominican Republic is rising gradually until it reaches 10 percent in Similarly, the contribution rate in Costa Rica is being increased gradually from 1.
In Uruguay poorer workers can split their 15 percent mandatory contribution equally between the PAYG and the funded system. The figures reported assume that the total contribution is made to the funded system. Figures for Chile are based on the average earnings for workers who contributed to the system in December This average is higher than the national one because of the informal and self-employed workers. In contrast, Mexico established a centralized record-keeping and collection system with the sole purpose of handling the flows of information and funds in the new pension system.
Another important difference is that the Mexican agency is owned by the new dedicated pension fund management industry and set up as a nonprofit company. In the Dominican Republic a nonprofit, private foundation is also responsible for record keeping. The Treasury monitors this institution and is ultimately responsible for sanctions and for ensuring that funds are correctly allocated to each of the individual programs within the social security system.
The pension fund administrators charge a fee or commission in remuneration for their services. In the Dominican Republic a performance-related fee is allowed, whereas in Mexico there is complete freedom in the type of charge that the administrators may set.