Module 15: Social protection and the social contract

Module 15: Social protection and the social contract

ILO, 2013

Key questions• What is a social contract?• Why is there a need for a contract?• What is the origin of the social contract?• What is the role of ideologies in influencing social policies?• What is the role of religion in influencing our vision of society

and social protection?• What other factors influence social protection policies?• What is a welfare state?• What are experiences from different countries?• What is the basis for social contracts in different countries?

• Social contract is an implicit contract or agreement on how to live together in a society

• It defines rights and duties of all parties, e.g. people pay taxes, government provides public services financed from taxes

• It may be established within a family, within a community, between the government and the governed

• Includes social policies and taxes• Definition of rights and duties must evolve over time• The ABND is built upon a national dialogue process, and

thus the vision of society and social contract are reflected in the ABND recommendations

Social contract

• It starts with the origin of society, i.e. the state of nature• State of nature is human life without any political or social

order• In Thomas Hobbes’s state of nature, human beings are

perfectly free and equal, i.e. anyone can kill anyone• Result: Life is “a war of all against all”• Humans could not improve their lives or perform productive

activities as they were busy defending themselves• There was need for a mutual agreement

Need for a contract

Origin of social contract• Humans created an agreement to live in society• Social contract: ruler protects the people, people have to

give up some individual rights• People gain security and civil liberties• It is a choice between total freedom and security

• According to Jean-Jacques Rousseau, society is not abdication of freedom

• People lose their natural liberty, but gain civil and moral liberty

• He says of moral freedom, “obedience to the law that one prescribes for oneself is freedom“ as we do no more than obey ourselves

Origin of social contract

Ideology Aims Role of Government

Best means of distribution

Libertarian Individual liberty

Minimum State intervention,austere welfare state

Private market

Liberal Maximize total utility of people,social justice (Rawls)

Moderate redistributive role of State, to serve society’s goals

Mixed economy i.e. private market moderated by State intervention

Socialist Equality, freedom, fraternity

Significant redistributive role of State

Mixed economy (Democratic) / State intervention (Marxists)

Role of ideologies in influencing social policies

• Ideologies influence the design of social policies• E.g. Barack Obama’s Healthcare Reform, 2010 sought

compulsory universal healthcare coverage and payment of fine if a person does not have medical insurance

• Ideological split between proponents of universal coverage and Republicans who declared this as an “infringement on the rights of individuals”

Role of ideologies in influencing social policies

• Religion is a chief factor influencing how people view society• However, all religions advocate similar principles regarding

solidarity and mutual help• Buddhism -> interdependence, mutual protection

Role of religion

Buddha’s famous discourse about 2 acrobats: “By protecting others, one protects oneself“

• Confucianism -> altruism: “Welfare of the society above the individual”

• Islam -> charity: “Zakat” to share 2.5% of one’s wealth• But, global influence in recent years has diluted religious

feelings, cultural and family relations

Role of religion

Other influencing factors

• Singapore has a pragmatic culture• Limited role of government and religion in social protection• Compulsory savings by individuals• 2008 economic crisis focused global attention on social

protection• Availability of fiscal space -> universal vs. targeted,

contributory vs. non- contributory?• Lack of awareness on the necessity for social contributions

impacts successful implementation of contributory social insurance schemes

Welfare state• Idea of welfare state started gaining momentum in

developing countries in 1980s• Welfare state supports the poor and allows income

redistribution• An exchange: rich groups taxed more, State protects people• Protecting the poor indirectly protects the rich• With more skills and better health, the poor can contribute

more effectively to the nation’s development

Experiences from countriesThailand• Important role of monarchy

in society• Mix of policies

Universal coverage guaranteeing a minimum level of benefits to all e.g. Universal Healthcare Coverage Scheme

Targeted schemes for specific vulnerabilities e.g. Non-contributory allowance schemes for the elderly, disabled and people with HIV-AIDS

Indonesia• Social security law, 2004 and Constitution provide for social

security to all• Lack of resources has slowed implementation• It is considered unaffordable to pay for the non-poor ->

universal coverage not a popular idea• Focus is on income redistribution between the rich and poor,

with little focus on middle class• Rights-based approach still to gain momentum

Experiences from countries

• Freedom vs. equality in designing social policies

• Universal vs. targeted schemes?

• Voluntary vs. compulsory schemes?

• Other factors that shape people’s vision of society and social protection?

Basis for social contract in countries