The Role of Social Assistance in Reducing Poverty and Inequality in Asia and the Pacific

Research output: Working paper

Abstract

This working paper analyzes the role and contribution of social assistance to reducing poverty and inequality and supporting inclusive growth in Asia and the Pacific. It is based on an assessment of current trends in social assistance provision against the main policy challenges faced by developing member countries (DMCs) in the region, informed by the international experience.
It is divided into three main sections. First, it reviews long-standing and emerging challenges to social protection in Asia and the Pacific: poverty and inequality, demographic change, inclusive growth, and environmental change. Second, it reviews social assistance provision, covering spending, programming, reach, and distribution. Third, it examines key issues shaping the development of social assistance: equity, social investment, and sustainable financing.
Acknowledging the expansion of social assistance provision in the region over the last 2 decades, the working paper identifies the main challenges. The region has been remarkably successful in reducing extreme poverty, but a large share of the population remains mired in moderate poverty. According to World Bank estimates, 322 million people in East and South Asia lived on less than $1.90 per day, 1.2
billion people on less than $3.20 per day, and 2.2 billion people on less than $5.50 per a day in 2013.
Moreover, there have been several demographic changes. Recent economic growth, in contrast to the 1980s and 1990s, has not been as inclusive, with inequality rising in the more populous DMCs.
Environmental change provides an additional parameter in the design of social assistance. A brief assessment of current social assistance provision reveals emerging welfare institutions in Asia and the Pacific. Spending on social protection shows an upward trend, from an unweighted average of just under 4.0% of gross domestic product in 2003–2005 to 5.3% in 2015. The main focus of social protection expansion is social assistance, in line with trends in Latin America and Africa. However, the
distribution of spending is skewed toward nonpoor population groups. With variation across DMCs, social assistance has indeed reduced poverty and inequality.
Three key issues are likely to shape the future development of social assistance in the region. First, tax‑transfer systems are the most effective public instrument to advance equity, but as currently designed in DMCs, they have marginal effects on equality and poverty. Social assistance has an important role in improving the distributional effects of tax-transfer systems in the region. Second, the global expansion of social assistance has emphasized its social investment role, but the protective role of social assistance has been dominant in the region. A rebalancing of social assistance protection and social investment roles will be key to the development of social assistance. Third, strengthening social assistance will require resource mobilization as well as sustainable and stable financing.
Original languageEnglish
Place of PublicationManila
PublisherAsian Development Bank
Number of pages30
DOIs
Publication statusPublished - Sept 2019

Publication series

NameADB SUSTAINABLE DEVELOPMENT Working Paper Series
PublisherAsian Development Bank
No.62

Keywords

  • social assistance
  • poverty
  • inequality
  • Asia

Research Beacons, Institutes and Platforms

  • Global inequalities
  • Global Development Institute

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