Safety Nets, Politics, and the Poor

Transitions to Market Economies

Carol L. Graham

• Publisher: Brookings Institution Press
• Year: 2010
• eBook ISBN: 9780815719892
• Edition: 1
• Topic: Social Sciences
• Subtopic: Social Policy
• Index: Social Sciences

Countries worldwide are attempting difficult transitions from state-planned to market economies. Most of these countries have fragile democratic regimes that are threatened by the high social and political costs of reform. Governments—and ultimately societies—have to make hard choices about allocating scarce public resources as they undergo these transitions. A central, often controversial, and most poignant question is how to protect vulnerable groups and the poor. What compensation, what ""safety net"" will be provided for them?
Carol Graham argues that safety nets can provide an environment in which economic reform is more politically sustainable and poverty can be permanently reduced. However, these two objectives frequently involve trade-offs, as vocal and organized opponents of reform (for obvious political reasons) often concern governments far more than the poor. These organized and less vulnerable groups tend to place heavy demands on the scarce resources available to governments at times of economic crisis. Governments that fail to address the social costs of reform, meanwhile, often face popular opposition that jeopardizes or even derails the entire market transition--the results of the September 1993 elections in Poland are a case in point.
The author examines these trade-offs in detail, with a particular focus on how political and institutional contexts affect the kinds of safety nets that are implemented. For example, reaching the poor and vulnerable with safety nets tends to be more difficult in closed-party systems, such as in Senegal, where entrenched interest groups have a monopoly on state benefits. In contrast, dramatic political change or rapid implementation of economic reform undermines the influence of such groups and therefore can provide unique political opportunities to redirect resources to the poor, as in the case of Bolivia and Zambia. Rather than focus their efforts on organized interest groups--such as public sector

Table of contents

• Foreword
• Tables
• Figure
• 1. Market Transitions and the Poor: New Coalitions for Economic Reform?
• 2. From Emergency Employment to Social Investment: Politics, Adjustment, and Poverty in Chile
• 3. The Politics of Protecting the Poor during Adjustment: Bolivia’s Emergency Social Fund
• 4. The Politics of Reform without a Safety Net: The Case of Peru
• 5. The Vocal versus the Needy: The Politics of Poverty Alleviation during Adjustment in Senegal
• 6. The Politics of Adjustment and Poverty in Zambia: “The Hour Has Come”
• 7. The Political Economy of Safety Nets in Post-Socialist Economies: The Case of Poland
• 8. Comparing Experiences with Safety Nets during Market Transitions: New Coalitions for Reform?
• Appendix: Other Experiences with Safety Net Programs
• Notes