Social Protection for the

Poor and Poorest

Concepts, Policies and Politics

Edited by

Armando Barrientos
and

David Hulme

Palgrave Macmillan
Contents

List of Tables vii

List of Figures ix
List of Abbreviations x
List of Web Resources xiii
Acknowledgements xiv
Notes on the Contributors xvi
Glossary xx
Preface to the Paperback Edition xxii
Foreword by Frances Stewartt xxvi

Part I Introduction
1 Social Protection for the Poor and Poorest: An Introduction 3
Armando Barrientos and David Hulme

Part II Conceptual Frameworks for Social

Protection: Risks, Needs and Rights
2 Risks, Needs and Rights: Compatible or
Contradictory Bases for Social Protection 27
Lauchlan T. Munro
3 Insurance for the Poor? 47
Stefan Dercon, Tessa Bold and Cesar Calvo
4 Transformative Social Protection: The
Currency of Social Justice 64
Rachel Sabates-Wheeler and Stephen Devereux
5 Poverty Traps and Natural Disasters in
Ethiopia and Honduras 85
Michael R. Carter, Peter D. Little, Tewodaj
Mogues and Workneh Negatu

Part III What Policies Work for the Poorest?

6 Indonesia’s Social Protection during
and after the Crisis 121
Sudarno Sumarto, Asep Suryahadi and Sami Bazzi

v
vi Contents

7 HIV/AIDS, Social Protection and Chronic Poverty 146

Rachel Slater
8 The Social Protection Function of
Short-Term Public Works Programmes in
the Context of Chronic Poverty 160
Anna McCord
9 The Emergence and Popularity of Conditional
Cash Transfers in Latin America 181
Tatiana Feitosa de Britto
10 Assisting the Poorest in Bangladesh: Learning
from BRAC’s ‘Targeting the Ultra-poor’ Programme 194
David Hulme and Karen Moore
11 Protecting the Poorest with Cash Transfers
in Low Income Countries 211
Bernd Schubert

Part IV The Politics and Financing

of Social Protection

12 Process Deficits in the Provision of Social

Protection in Rural Maharashtra 227
Sony Pellissery
13 Conceptualising the Politics of Social
Protection in Africa 247
Sam Hickey
14 Political Incumbency and Drought Relief in Africa 264
Ngonidzashe Munemo
15 Can Low Income Countries in Sub-Saharan
Africa Afford Basic Social Protection? First Results
of a Modelling Exercise 282
Christina Behrendt
16 Financing Social Protection 300
Armando Barrientos

Part V Conclusion

17 Embedding Social Protection in the Developing World 315

Armando Barrientos and David Hulme

Index 331
2
Risks, Needs and Rights:
Compatible or Contradictory
Bases for Social Protection
Lauchlan T. Munro

Introduction1

Justifications for the welfare state in general, and for social protection and
the attack on chronic poverty in particular, have traditionally come from
three sources: an analysis of uninsurable risks and other market failures;
doctrines of human rights – specifically, economic and social rights; and
needs-based doctrines. The risk school emphasises failures in insurance
markets, specifically the inability of private and communal insurance
mechanisms to provide cover against all forms of risk, often due to asym-
metrical or incomplete information. These important failures in insurance
markets are compounded by other failures in markets for labour, credit and
human capital. The social and economic rights school focuses on the obliga-
tions of the state derived from the assertion that citizens possess social and
economic rights that are legally enforceable claims on the state. These rights
are usually said to be defined in the Universal Declaration of Human Rights
(UN 1948) and the International Covenant on Economic, Social and Cultural
Rights (UN 1996a), among other sources of international law, and are fre-
quently asserted as coming from natural law. The needs-based doctrine
stresses the practical and moral importance for poor and non-poor alike of
eliminating (or at least alleviating or reducing) chronic poverty, and asserts
both moral and economic claims in favour of social protection measures.
Perhaps because the three discourses of risks, needs and rights arose from
different academic disciplines, the three tend to run in parallel, with remark-
ably few intersection points. In public policy debates, the three discourses
tend to come into and fall out of fashion, only to return later. The rights-
based argument, for example, is currently in the ascendancy, at least with
certain UN agencies and many development-orientated NGOs. In the 1970s,
the needs-based approach held sway, and it has enjoyed something of a
revival recently in the form of the Millennium Development Goals. From

27
28 Social Protection for the Poor and Poorest

the 1930s to the 1960s, market failures were used as the grounds for a
considerable expansion of the state’s economic roles, including the growth
of the modern welfare state. The recent granting of the Nobel Prize to three
leading figures in the economics of asymmetrical information (with its
implications for insurance markets, among other things) attests to the con-
tinuing power of the risk-based tradition.
Given these political and intellectual dynamics, those who support social
protection and reduction of chronic poverty need to understand each of
these three discourses, including the areas where they are mutually support-
ive or where they are mutually contradictory. Certainly, the critics of
increased social protection will pick and choose their counter-arguments,
and many of them will be tempted to pick apart arguments from one source
to discredit the entire project of social protection and poverty reduction.
This chapter begins by outlining each of the three main sources of support
for social protection, and then explores those areas where the three dis-
courses provide mutual support or mutual contradiction. The main purpose
of this chapter is to help proponents off social protection to understand these
areas better. A secondary objective is to suggest areas where members of the
three traditions might usefully co-operate.

The three discourses explained

Uninsurable risks and market failures

In neo-classical economics, it is universally admitted that real world
markets – as opposed to the perfectly competitive ones found in elementary
textbooks – frequently suffer from market failure. The traditional list of
market failures includes public goods, externalities, incomplete markets,
imperfect competition, imperfect information and (less frequently) merit
goods. Variations of this list are found in every textbook of public econom-
ics (for example, Barr 1998: 78–85; Stiglitz 2000: 76–88).
Nicholas Barr was the first to point out that the traditional list of market
failures might explain many types of government intervention in the econ-
omy, but did little to explain or justify the emergence of a comprehensive
welfare state. His ‘main conclusion is how thin, at least in utilitarian terms,
is the traditional justification for large-scale, publicly organized welfare
state services. To the extent that the traditional market failures support wel-
fare state institutions at all, they justify only a residual welfare state’ (Barr
1992: 749). Extensive public provisioning in health care, education and
social security is justified in large part by ‘information failures’ – that is,
incomplete and/or asymmetrical information between (would-be) parties to
a transaction (Barr 1992: 749).

Many parts of the welfare state are a response to pervasive technical prob-
lems in private markets, and therefore serve not only the distributional
 Lauchlan T. Munro 29

and other objectives (of) ... poverty relief, ... equity, dignity and social
solidarity, but also efficiency objectives such as income smoothing and
the protection of accustomed living standards in the face of uninsurable
risks and capital market imperfections ... [T]here is an efficiencyy case for a
universal welfare state. (Barr 1998: 98; emphasis in original)

Commercial insurance will not cover a large number of risks, or will cover
them only incompletely. These are related to principal–agent problems
between the insurer and the insured, asymmetrical information about inten-
tions and states of health, uncertainty about the future, and moral hazard
problems. Together, these explain why the private sector is generally loath to
insure against unemployment or pregnancy, or to cover certain types of
health risks (Barr 1998: 108–126; Stiglitz 2000: 359–363). Paradoxically, com-
mercial insurance may deny cover to low-risk cases while providing it to
higher-risk cases, which violates the risk-sharing principle underlying insur-
ance (Barr 1998: 117; Stiglitz 2000: 316–317).
Since the profitability of insurance companies depends on the independ-
ence of risks between insured parties, the existence of strong covariant risks
is a strong discouragement to the formation of insurance markets. If all (or
many) of the insured parties make claims at the same time, the insurer may
be bankrupted. Typical covariant risks include many ‘natural’ disasters such
as droughts, floods, some pest infestations (for example, locusts), and armed
conflict. The private insurance company is unlikely to provide full cover for
such areas without state guarantees, or without strict limitations on the
type and level of liability.2 Commercial insurers do not provide unemploy-
ment insurance either, and again the reason is largely covariant risk; a reces-
sion resulting in widespread unemployment could bankrupt the insurer.3
Similar problems affect other markets. Uncertainty about future earnings
means that banks will not generally lend money to students without state
guarantees or collateral from parents.4 This amounts to an imperfection in
the market for human capital formation, since children from poor house-
holds are too great a risk for most lenders. Uncertainty about future earn-
ings and the risk of operative failure also explains why banks do not lend
money to help poor people to pay for expensive, but life-saving, medical
procedures.
These and many other, often overlapping, market failures help to explain
why the richer countries have built comprehensive welfare states. While
developing countries do not have the comprehensive welfare systems of the
West, they often do have free or subsidised education and health care, state
pensions, food subsidies, various conditional and unconditional cash trans-
fers, and disaster relief, for similar reasons.
In the risk-based school, social protection measures are justified ‘in utili-
tarian terms’ (Barr 1992: 749) on the basis of real or potential welfare losses
arising from market failures and the ability of public action to prevent or
30 Social Protection for the Poor and Poorest

compensate for these losses. Deciding on the appropriate nature and scope
of social protection measures is a pragmatic exercise based on the costs and
benefits, judged in utilitarian terms, of various possible government inter-
ventions (for example, taxation, subsidisation, regulation or direct provi-
sioning) versus the costs of leaving the problem to the market.
There is little talk of rights or needs in this discourse. Indeed, the index
to Stiglitz’s major textbook (Stiglitz 2000) contains no entries for ‘rights’,
‘human rights’, ‘needs’ or ‘basic needs’. Barr, a leader in the risk-based lit-
erature on social protection, goes further than most, but he subsumes
rights under statements of ‘value judgement’ and ‘ideology’. ‘[T]he proper
place of ideology is in the choice of aims, particularly in the definition of
social justice and in its trade-off with economic efficiency; but, once these
aims have been agreed, the choice of method should be regarded as a techni-
cal issue’ (Barr 1998: 98; emphasis in original). ‘There is wide acceptance
of the value judgement that people have a right to adequate nutrition and
health care. These are aims; but the existence of these rights does not, per
se, have any implications for the best method of achieving them’ (Barr
1998: 100).
The neo-classical risk-based literature is much concerned with poverty,
though it defines this solely in terms of income; within the income pov-
erty school, its concern is usually absolute poverty. There is an extensive
literature on possible public policy interventions to alleviate inadequate
incomes (see, for example, Barr 1998, Stiglitz 2000 and the sources they
cite). The risk-based school has only just begun to grapple with chronic
poverty. There is often the (reasonable) assumption that chronic poverty is
linked to depth of poverty. To the extent that this is true, the very poor
and/or the chronically poor may suffer from several overlapping and
mutually reinforcing market failures that prevent them from using the
market to manage risk. Social protection measures are particularly
important for such people.

Rights-based arguments for social protection

Since the Universal Declaration of Human Rights (UN 1948) declared the
existence of economic and social rights, the discourse on rights and social
protection has taken root. In essence, this literature suggests that the state
should provide social protection to its citizens as a matter of right.5
But where do human rights come from? One can discern three traditions
within the human rights school:

• natural law;
• constitutional law and international law, especially international human
rights law; and
• a theory of human needs as a basis for human rights.
 Lauchlan T. Munro 31

Natural law has a quasi-theological character and is rooted in the

Judeo-Christian tradition. Natural law is based on a few axioms or articles
of faith. In this tradition, all humans have rights because of their inherent
human dignity. The respect of that dignity implies a system of rights and
obligations, or duties. One of the clearest expressions of the natural law tra-
dition comes from the American Declaration of Independence: ‘We hold
these truths to be self-evident, that all men are created equal, that they are
endowed by their Creator with certain unalienable Rights’. The natural law
tradition is now widely (though not universally)6 held to include economic
and social rights, as well as the more traditional civil and political rights of
classical liberalism.
The second source of human rights is constitutional and international
law. Since the Second World War, there has developed a large corpus of
international law, including international human rights law and interna-
tional humanitarian law. For the purposes of this chapter, the most impor-
tant parts of the corpus are the Universal Declaration of Human Rights (UN
1948) and the International Covenant on Economic, Social and Cultural
Rights (ICESCR) (UN 1966a).7 National constitutions also frequently
enshrine rights for their citizens. This ‘legalistic’ interpretation of rights
says that human rights exist because the great majority of the world’s states
have ratified a certain number of human rights treaties, or because national
constitutions confer rights on their citizens.8
Rights are not about charity or morality; they are binding legal obliga-
tions, in this view. The UN High Commissioner for Human Rights put it
this way: ‘the power or human rights lies not just in the expression of an
aspiration ... but in the articulation of a legally binding framework’ (Arbour
2005: 5). This emphasis on rights being grounded in law is an attempt to
give rights, especially economic, social and cultural rights, the political
and policy traction that they might not otherwise have. Contrary to what
some liberal critics of economic and social rights have argued in the past
(see, for example, Barry 1990: 80), economic and social rights are justifi-
able. Courts in Canada, India and South Africa have ruled that economic
and social rights are justifiable (see, for example, Rights and Democracy
2003).
Natural law and the legalistic traditions of human rights are often linked;
for example, the preambles of the main human rights treaties allude to the
natural law principle of the inherent dignity of the human person (UN
1948: Preamble; UN 1966a: Preamble).9
But natural law and legalistic traditions can also contradict each other; for
example, on the question of whether laws give rise to rights, or whether
rights exist prior to (and without) law. Jeremy Bentham believed the former,
saying that ‘Right,t the substantive right,t is the child of law ... from laws of
nature [can come only] imaginaryy rights’ (Bentham 1998; emphasis in
original). The drafters of the American Declaration of Independence took
32 Social Protection for the Poor and Poorest

the latter view, saying that it is ‘self-evident’ that ‘Governments are insti-
tuted among Men’ to ‘secure these rights’.
The third tradition within the human rights school is sceptical about
both the faith-based character of natural law and the legalistic grounding
of human rights. Since natural law is essentially faith-based, what can one
do about non-believers? What does one say to the drafters of the American
Declaration of Independence if one does not accept that these ‘truths’ are
‘self-evident’? And of the legalists one could ask what would happen if
enough states withdrew their ratifications of these human rights
conventions: would human rights then cease to exist? Indeed, if rights are
based on the existence of conventions and constitutions, were there no
rights before the conventions or constitutions came into force? This third
tradition asserts that the notion of human rights can only be grounded on
a theory of basic human needs (Doyal and Gough 1991; Taylor-Gooby 1991;
Munro 2000; see also Sen 2004).
The needs-based theory of rights sees human rights as part of moral phi-
losophy. To have any system of moral philosophy, one must have a moral
agent. A moral agent is a person who is capable of making choices, specifi-
cally of choosing between good and bad. Going back to Thomas Hobbes
(1651), the mere existence of human life is not enough to ensure a decent
existence; for that, security of the person and his/her property are essential.
Therefore, the survival and ‘avoidance of serious harm’ (Doyal and Gough,
1991: 40) to the moral agent are the basis for any system of moral philoso-
phy, whatever its ends may be. Human needs can be defined as those things
that are required to avoid serious harm to the moral agent. Though the
boundaries of this set of things may be fuzzy, the core set is clear enough:
physical and psychological security, the ability to participate in decisions
that affect oneself and one’s community, health care, basic education, ade-
quate nutrition, an adequate livelihood. To say that someone has a ‘right’ to
any of these things is merely to say that he or she needs them in order to be
and remain a moral agent.10 The realisation of rights is thus essential to any
moral philosophy; indeed to any system of law. In short, a convincing the-
ory of rights can be built without recourse to natural law, constitutions or
international treaties.
In relation to social protection, the International Labour Office got close
to this theory in 1942, when it defined a social safety net as ‘a form of social
security which provides assistance to persons of small earnings granted as of
rightt in amounts (that should be) sufficient to meet a minimum standard of
need’ (ILO 1942: 84; italics added).
In all three versions, human rights theory holds that rights are binding
obligations. This means that someone is obligated. For every rights holder
there must then be a duty bearer. Sometimes the duty is simply to forbear
from acting: for example, I must abstain from hitting you unless you attack
me first. But this is merely respecting your rights, and, to be meaningful,
 Lauchlan T. Munro 33

rights must be respected, protected and fulfilled. There are therefore also
duties to protect rights; for example, a policewoman is duty-bound to pro-
tect a person who is being hit. And there are duties to fulfil rights: the state
is obliged to help people who have been hit – for example by providing
medical care and counselling.
But not all rights are claims against the state. Sometimes the claims may
be against other citizens. Take the case of a girl’s right to an education (UN
1948: Article 26; UN 1966a: Article 13; UN 1989: Article 28). This right
implies that the state has a duty to ‘take steps ... to the maximum of its avail-
able resources, with a view to achieving progressively the full realisation of
the [girl’s] right’ (UN 1966a: Article 2) to schooling of adequate quality near
the girl’s home. The girl has claims against the state in that sense. But the
girl also has claims against her family and her community. The girl’s parents
are obliged to allow the girl to go to school. They must not put any obstacles
in her way. Similarly, members of the girl’s community are constrained from
taking any steps to prevent the girl attending school – for example, by har-
assing her on the way to and from school.
All rights, including civil and political rights, have resource implications;
elections cost money, as do police forces and judicial systems. But many
economic and social rights (for example, education, health care, social secu-
rity) are particularly resource-intensive. Rights-based thinkers acknowledge
the scarcity of resources in the face of an unlimited number of possible
demands; all rights cannot be realised immediately for all people every-
where. Hence the international human rights instruments incorporate the
doctrine of the progressive realisation of rights. They accept that scarcity is
a problem, but insist that governments and other duty bearers must make a
concerted effort over time to allocate resources to the fulfilment of their
duties to rights holders. The ICESCR requires that ‘Each State Party to the
present Covenant undertakes to take steps ... to the maximum of its available
resources, with a view to achieving progressively the full realization of the
rights recognised in the present Covenant’ (UN 1966a: Article 2). But how
much effort is enough? What are ‘the standards and processes for monitor-
ing ... [the] core minimum obligations of State parties and the progressive
steps required’ (O`Neill and Bye 2002: 29)? Neither the statute law nor the
subsequent case law clarifies the issue much (Robertson, 1994; O’Neill and
Bye 2002: 31–32, 42).
A rights-based approach to development is now the official policy of many
development organisations. Several United Nations agencies have developed
a ‘common understanding’ of the human rights-based approach to
programming (UNDG 2003). Among the NGOs, the BRAC, Oxfam, the Save
the Children Alliance, and World Vision are the leaders in the rights-based
approach to development. All these organisations are trying, with varying
degrees of difficulty and success, to understand the implications of incorpo-
rating human rights into the daily business of project and programme
34 Social Protection for the Poor and Poorest

planning in general (Brouwer 2005; Courdesse and Hemmingway 2005;

Goulden et al. 2005; Ljungman and Forti 2005; Munro forthcoming) and
into concrete domains such as social protection in particular. UNICEF took
the lead in designing a ‘rights-based approach to programming’ (UNICEF
1998) including in situations of social protection. It includes a sophisticated,
rights-based situation analysis for identifying when and how violations of
rights are occurring, and hence, who is responsible (UNICEF 2000a,b, 2004).
The UNICEF tool and other project-level tools like it (for example, NORAD
2001) are useful in designing individual interventions, including in social
protection. Since the doctrine of human rights is loath to create a hierarchy
of rights, however, such project-level tools are of little use in deciding which
violation(s) of rights are the most serious. It is unclear what their role should
be in broader public policy debates– that is, at programme and policy levels
(Munro forthcoming). The risk-based thinkers, with their concepts of wel-
fare losses and opportunity costs, have much less difficulty.

Needs-based arguments for social protection

The concept of human needs stretches back at least as far as Thomas Hobbes
(1651), who insisted that security of the person and of property was neces-
sary for any kind of decent life. The poverty studies of the nineteenth and
twentieth centuries described the poor diet and insecure and unhealthy liv-
ing conditions of the poor (for example, Engels 1845; Riis 1890; Rowntree
1901). These authors used words such as ‘necessity’ to describe such things
as a basic diet, adequate shelter, sanitary living conditions and simple cloth-
ing. At the same time, they used words such as ‘insufficiency’ and ‘lack’ to
describe their absence.
Such studies laid the foundation for the now established tradition of pov-
erty surveys based on poverty lines. These surveys establish and cost out a
list of basic needs, including a minimum diet, defined by the level of caloric
intake needed to remain alive and economically active, and usually some
other necessities such as clothing and shelter. Often health care and educa-
tion costs are included as well. People whose income is below the level
required to purchase this set of commodities are deemed to be ‘poor’.
The 1970s saw the ascendancy of the ‘basic human needs’ school of
development policy (Afxentiou 1990).11 The basic needs school set itself up
in contrast to the earlier fixation of development economics with the
growth of income per capita. The basic needs school redefined develop-
ment in a more humanistic fashion, as the extent to which people’s basic
needs for health, nutrition, literacy, shelter, clothing, employment and
security were met. The list of basic human needs they used has its roots in
the nineteenth- and early twentieth-century poverty studies, and to later
poverty line studies: people living below the poverty line are unable to
meet their basic needs.
 Lauchlan T. Munro 35

The basic needs school relied, usually implicitly, on Maslow’s hierarchy of

human needs (Maslow 1943), which was popular throughout the social sci-
ences in the 1960s and 1970s. The usual 1970s list of basic needs corre-
sponded closely with the bottom two levels of Maslow’s hierarchy, namely
‘physiological’ needs (health, nutrition, clothing, shelter) and ‘safety’ needs
(adequate income, security).
The seminal article in the basic needs school was Dudley Seers’ ‘The
meaning of development’ (Seers 1969), which questioned whether the
growth of GNP (gross national product) per capita was an adequate measure
of development. Seers suggested not that GNP per capita is irrelevant, but
that distributional issues are also important. Most importantly, growth is
possible, they asserted, without any improvement – and possibly with a
deterioration – in the levels of things that really matter for the quality of
human life: the basic needs of health, nutrition, literacy, shelter, clothing,
employment and security. The job of social protection is to ensure that these
needs are met if they cannot be met through individual or community
effort. Indeed, the objective of public policy generally should be to ensure
that basic human needs are met.
There are three arguments in favour of basic needs: a moral or intrinsic
argument for the satisfaction of basic needs, an instrumental argument for
the satisfaction of basic needs, and a political argument (Streeten et al. 1981).
The moral case asserts that the satisfaction of basic needs is a good thing in,
and of, itself. The mental and physical suffering caused by the lack of satis-
faction of basic needs is largely avoidable, given modern wealth and tech-
nology. The obstacles to the universal satisfaction of basic needs are mainly
social, political and economic (and thus amenable to public policy), not
technical or scarcity-based. Continuing to allow current levels of unsatis-
fied basic needs when they can be satisfied is morally repugnant.
The original proponents of the basic needs school in the 1970s were
mainly economists, agronomists, nutritionists and medical professionals
(for example, McHale and McHale 1977). The moral and political theory
underlying the basic needs school was not very sophisticated, and the legal
arguments were conspicuous by their absence. Some leading lights of the
basic needs school even argued that basic needs could nott be seen as human
rights (Streeten et al. 1981: 184–192). The basic needs school relied on an
intuitive approach to morality based on a sense of human solidarity and
compassion in the face of unnecessary suffering. Social protection, at least
in the sense of providing basic human needs to all, especially to those who
are least able to support themselves, is thus a moral imperative.
The second argument is that the satisfaction of basic needs is good not
only intrinsically, but also instrumentally. Expenditure on primary health
care, basic education, sanitation and nutrition is not consumption, but
rather investment, with high rates of private and social return. Healthy,
well-nourished and well-educated people are more productive, can support
36 Social Protection for the Poor and Poorest

themselves, are able to pay more taxes, and are less likely to spread disease
or engage in socially undesirable behaviours. In the 1970s and early 1980s,
it was widely believed that the satisfaction of basic needs on a mass scale
might even promote faster economic growth.12
It is no accident that the basic needs school flourished in the decade after
economists discovered ‘human capital’. The evidence of high rates of return
to investment in human capital (especially in education) helped the basic
needs school to appeal both to mainstream economists and to the moralists.
Prominent proponents of basic needs pitched their arguments to both camps
simultaneously (for example, Streeten et al. 1981). Proponents of basic needs
sometimes bolstered their arguments on the affordability of basic needs by
linking them to the then popular appropriate (or intermediate) technology
movement. Many basic needs for sanitation, shelter, clothing, energy and
health care can be met using low-cost appropriate technology (McHale and
McHale 1977: 148–154, 163–164). The affordability of, and high rates of
return on, investments in basic needs meant that satisfying basic needs was
both economically rational in the short run and likely to reduce the demand
for social protection in the future.
There was a third, more overtly political, argument put forward for basic
needs. Proponents argued that satisfying basic needs could benefit rich and
poor alike, at least in the medium– to long term.13 For example, both rich
and poor benefit from the control of epidemic diseases. The entrepreneurial
upper classes benefit from having access to a more educated, better skilled
and healthier labour force. With proper political management, basic needs
could thus form a viable political platform.
The basic human needs school ran out of intellectual steam by the late
1970s, making no new intellectual contributions until the launch of UNDP’s
human development index (UNDP 1990), but its political influence contin-
ued. UNICEF, under the leadership of James Grant from 1980 to 1995, used
the basic needs literature as a jumping-off point for a powerful moral and
political narrative on the need for the world to invest more in its children
(Jolly and Cornia 1984; Cornia et al. 1987; UNICEF 1987; Vandemoortele2000).
UNDP’s human development index draws greatly on the basic needs litera-
ture; the index can be read as a measure of the satisfaction of basic needs in
a society, combining income (a proxy for command over commodities nec-
essary to satisfy basic needs), literacy (a basic need in itself), and longevity
(as a proxy for health and nutrition needs). Basic needs thinking underpins
the Millennium Development Goals (MDGs). Indeed, the MDGs are merely
the 1970s basic needs literature writ large.
One blind spot of the basic human needs literature is the lack of a specific
analysis of social protection in general, and of chronic poverty in particular.
Social protection is seldom dealt with explicitly in the basic needs literature.
Implicitly or explicitly, the basic needs school assumed a strong role for the
state in assuring basic needs, either as regulator, facilitator or direct provider,
 Lauchlan T. Munro 37

especially for the poorest and those chronically in need. Equally, however,
there was an assumption that the role of the state must be to step in only
where the market and individual or community effort were insufficient to
satisfy basic needs, and where public action could improve the situation in
welfare terms. In this sense, there was a strong residualist tendency in the
basic needs school, especially in the branch affiliated to the World Bank in
the 1970s. The risk-based school, also residualist in its approach, was, how-
ever, much more rigorous in spelling out how and where social protection
measures would be appropriate. Given the economics background of mem-
bers of both the basic needs and risk-based schools, however, it is unlikely
that they would come to radically different conclusions on how and where
the state should intervene.

Interactions between the risks, needs

and rights schools

Risks
As mentioned above, there is surprisingly little interaction between the
risks, needs and rights schools. The economists who drive the risk-based set
of justifications for social protection rarely concern themselves with rights
or needs. When they are confronted with a rights-based discourse demand-
ing social security, health care, adequate nutrition and so on, their reaction
is similar to that of the economists in the needs-based school (see below).
Being firmly rooted in neo-classical economics, the risk-based thinkers on
social protection prefer to avoid all talk of needs; using standard utilitarian
terminology, they prefer to speak of ‘preferences’. Since preferences are
based on expected utility, and since interpersonal comparisons of utility are
impossible, their concern is not unmet needs, but rather ‘welfare losses’
measured in terms of potential utility that cannot be realised because of
market failures. Chronic poverty, to the extent that it is based on market
failures, is, then, a chronic welfare loss, and proof of the chronic economic
inefficiency. To speak of ‘needs’ is to imply a hierarchy. Neo-classical econo-
mists are loath to introduce such a hierarchy, since it implies interpersonal
comparisons of utility.
The risk-based economists see claims of rights as one of several possible
value judgements or statements regarding the proper aims of public policy.
Once these aims are agreed upon, the determination of the best method to
achieve these aims is a technical exercise, not an ideological one. This
implies a separation of means and ends. Rights-based theorists reject such a
separation, since any method for achieving a public policy target (even one
intended to promote human rights) cannot violate human rights.
One interesting, and unexplored, avenue for collaboration between the
utilitarian risk-based school and the rights-based school comes from Jacob
Viner (1949). Bentham (1789) tried to build a new social science without any
38 Social Protection for the Poor and Poorest

basis in the preceding tradition of natural law by insisting on ‘the principle

of utility’ as the primary objective of public policy. The question (asked by
Viner but not by Bentham) was why anyone should expect utility to be the
primary objective of public policy. One possible answer is that people have
a right to utility, and that it is the duty of the state to uphold rights. If this
is the case, then the welfare losses, measured in utilitarian terms by the risk-
based school of economists, also become rights violations.

Rights
The rights-based supporters of social protection think of poverty as a viola-
tion of human rights. Chronic poverty is then an ongoing violation of
rights. One can infer that, if poverty is a violation of rights, then there
must be a right to get out of poverty. Indeed, in 1986, the UN General
Assembly declared that human beings have ‘a right to development’, and
this right has been reiterated in numerous UN declarations since. Poverty
reduction is thus not a policy option that a state might take on or not, as it
sees fit, but is a duty of states to their citizens, since rights are binding legal
obligations.
When they are confronted with rights-based arguments, the economists –
either from the risk-driven school or the basic needs school – view the
rights-based claims with great scepticism.14 They point out that no amount
of legal obligation can get around the tough questions of trade-offs in eco-
nomic and social policy-making in a world characterised by material scar-
city and infinite wants. More of one thing means less of another, and more
of one thing today may mean less of everything tomorrow. The absolutist
language of the rights discourse – for example, ‘there are no small rights’
(UNICEF 2000a: 4), ‘all rights for all children’ (UNICEF 2005) – is uncon-
vincing to those reared on the doctrine of scarcity, the production possi-
bility curve and associated opportunity costs. When economists point
these things out, the rights-based thinkers can only respond with the doc-
trine of the progressive realisation of rights, which has its own problems,
as seen above.
The legalistic tradition in human rights thinking views the binding
legal obligations implied by rights as its trump card. The legalistic rights-
based thinkers thus tend to denigrate needs-based arguments as being
paternalistic, based on charity and moralism – soft ground compared to
legal obligations. ‘Benevolent and charitable actions, while good in them-
selves, are insufficient from a human rights perspective’ (UNICEF 2000b:
9–10; see also UNICEF 2004: 11–12.) The legalistic rights-based thinkers
tend to ignore the risk-based economic arguments of neo-classical eco-
nomics, or dismiss them as ‘welfarist’ and thus, again, as being weaker
than arguments based on law.
The only ones who address the link between rights and needs systemati-
cally are those who think that rights must be based not in natural law or the
 Lauchlan T. Munro 39

whims of nation states when they make international law, but on a theory
of human needs. Like the risk-based economists, they also address the prob-
lem of moral hazard in social protection. Economists and moralists have
often stressed moral hazard as a potential problem in social protection. The
existence of a social safety net may distort patterns of work and levels of
savings and effort, and social protection schemes incorporate mechanisms
intended to avoid such problems. Many of these mechanisms, however,
have the effect of denying coverage to those who should be getting benefits
from the social protection scheme (Munro 2002). Economists have explored
the welfare losses involved in both failing to cover the whole target group of
a social protection scheme and in providing benefits to too many (ineligi-
ble) people (Cornia and Stewart 1993). Rights-based thinkers usually ignore
the moral hazard issue in discussions of the design of social protection
measures. A few, however, have grappled with the issue, most notably Peter
Taylor-Gooby (1991, ch. 8). Admitting that moral hazard is a problem,
Taylor-Gooby insists that a rights-based framework can cope with moral
hazard. Since rights come with correlative duties, one of the duties of the
rights holder is not to abuse his/her rights. This implies not only the usual
injunction not to invoke one’s own rights to the detriment of the rights of
others, but also the injunction to invoke one’s right to social protection (and
hence invoke the state’s duty to provide it) if and only if one has made a
good-faith effort to support oneself to the best of one’s ability. By implica-
tion, it is reasonable for the state to design social protection measures with
this in mind. Taylor-Gooby’s argument opens a terrain for fruitful conversa-
tions between the three schools on how social protection mechanisms
should be designed.

Needs
The needs-based group is the least theoretically sophisticated of the three
schools considered here. The definition of ‘needs’ is largely intuitive, or bio-
medical. The satisfaction of needs is taken as a strong moral imperative,
albeit one that also has the benefit of being useful for instrumental pur-
poses as well. Initially seen as a progressive and humanistic approach to
development in general, and to economics in particular, the needs-based
school is now denigrated as being paternalistic or welfarist by the rights-
based thinkers. The needs-based approach has been called ‘the cattle rear-
ing approach to development’: make sure they are adequately nourished,
fully vaccinated and well housed, and everything will be all right.15
Somewhat unfairly, the basic needs school has been accused of ignoring the
rights and dignity of the poor, and of avoiding issues of agency and partici-
pation.16
Coming from economics, albeit from a somewhat heterodox end of the
profession, the needs-based thinkers speak a common language with the
risk-based neo-classical economists, at least up to a point. Both can talk of
40 Social Protection for the Poor and Poorest

returns to investment in human capital, for example, and both see that
welfare losses resulting from market failures can have both static and long-
term effects. Both schools acknowledge the problem of scarcity in the face
of unlimited wants, and so both feel comfortable addressing issues such as
trade-offs, rates of return to various types of investment, and the long-term
effects of resource allocations.
The two schools may diverge, however, over the issue of Pareto optimal-
ity. Pareto optimality is politically conservative in that it suggests that wel-
fare improvements should be sought (or can only be proved to have taken
place) if the welfare of one party can be increased without reducing the
welfare of another. Risk-based thinking on social protection tends to rely
heavily on Pareto optimality as a benchmark. The needs-based thinkers
have often had a strong leaning towards redistributionist policies to increase
the welfare of the many, even if it is to the (temporary) detriment of the few.
Furthermore, some close allies of the basic needs school have shown that,
under certain plausible assumptions of unemployment and landlessness, a
Pareto optimal equilibrium can reduce some citizens to below starvation
levels (Coles and Hammond 1995).
The needs-based thinkers can also communicate with the rights-based
thinkers. For example, both the needs-based and the rights-based approaches
call attention to the links between those in need and those who already
have enough. The needs-based thinkers assert, for example, that even the
materially well off in developing countries would be still better off in sev-
eral ways if their fellow citizens were better educated, healthier and more
secure. Rights-based thinkers also sometimes stress the common interest
that rights holders and duty bearers have in realising everyone’s rights (see,
for example, UNICEF 2004: 11–12), though many think this is politically
naïve (Table 2.1).

Conclusions

It is important to understand why we support what we support. The fact

that the ends are the same (or very similar) does not mean that the pathways
taken to get there were the same. The three pathways to social protection
and poverty eradication – risks, needs and rights – twist and turn. At times
they approach each other, occasionally they intersect, but then they diverge
again. Opponents of social protection may wish to take advantage of the
diverse paths taken by its proponents to sow confusion and to paint a
portrait of intellectual confusion surrounding social protection. Those who
believe in social protection need to know how to defend it. To do so, they
need to understand how risks, needs and rights support and contradict each
other as justifications for social protection. This has been the main objective
of this chapter.
 Lauchlan T. Munro 41

Table 2.1 Compatibility and contradiction between the risks, needs and rights
schools
Areas of compatibility Areas of contradiction

Risks and rights Everyone has the right (1) Market failures provide no legal
to utility grounding for social protection
(2) Risk-based economists separate
the ends from the means of
policy; rights-based theorists
find this ends–means separation
unacceptable
Rights and needs (1) Development is (1) Natural law and legalistic
about people, not theories of rights reject needs-
commodities based arguments as charity,
(2) Both rights and paternalism, welfarism and/or
needs involve social moralism
relations (2) The rights-based school’s
(3) One theory of doctrine of ‘progressive
human rights is realization’ of rights is poorly
based on human specified compared to the
needs, not economists’ language of scarcity,
international or trade-offs and opportunity costs
natural law
(4) Rights and needs
both have a strong
moral dimension
Source: Author.

Another objective of the chapter has been to point out how and where the
proponents of these three views of the bases of social protection might
begin to talk to each other. A striking feature of the three schools is the dif-
ferent levels at which they operate. The risk-based school is highly technical
and operational; the rights-based school is highly theoretical and not much
concerned with the details of design and implementation of social protec-
tion schemes.17 Debate on the design of social protection schemes has tradi-
tionally been dominated by the risk-based school – that is, by economists
concerned with moral hazard – or by the needs-based school, who have
looked at how needs are met or unmet under various schemes. What has
been missing is the human rights element. Advocates of the rights-based
approach to social protection need to leave their ivory towers, roll up their
sleeves and contribute ideas for a rights-based design of social protection
schemes.
Second, the underlying basis of utility, essential to risk-based analysis, is
philosophically underdeveloped, as is the underlying basis of the basic
human needs school. The rights-based school has a comparative advantage
42 Social Protection for the Poor and Poorest

here, though its tendency to become hyper-legalistic, literalist and pedantic

should not be underestimated.18 A needs-based theory of human rights
seems to offer a fruitful basis for dialogue. Any takers?
Third, the needs and rights-based schools need to develop (better) ana-
lytical and design tools. The needs- and rights-based schools do a good job
of proving the desirability for social protection in principle, but do a much
less convincing job in analysing individual social protection situations.
Where they do provide tools for the analysis of such situations, these are
usually in the form of a needs- or rights-based critique. Furthermore, the
two schools provide little, if any, concrete guidance on, for example, the role
of social protection in public policy more generally.
Finally, the attentive reader will have noted that the treatment of chronic
poverty, a core theme of this book and part of its title, has been uneven in
the course of this chapter. Far from being an accident, this is a reflection of
the state of the literature. Chronic poverty is a relatively new concern (or at
least a new terminology), and it has entered the mainstream of public policy-
making only after many of the classics of the literature on risks, needs and
rights and social protection have been written. An important task for
scholars today is to reconsider, and to rewrite, the classics of the field using
chronic poverty as a starting point.

Notes
1. The views expressed in this chapter are personal, and should not be attributed to
any organisation with which the author is or has been affiliated.
2. Witness the recent debates about insurance coverage against terrorist attacks,
especially for airlines.
3. Asymmetrical information about the insured person’s intentions is the other rea-
son why the private sector does not provide insurance against unemployment (or
pregnancy) (Cullis and Jones,1998: 224).
4. An exception is commercial lending to students in professional and graduate
schools of, say, medicine, law and business administration. Here future earnings
are likely to be high, and previous high performance in undergraduate studies
serves as an indicator of future performance.
5. And, in some cases such as refugees, to the citizens of other states as well.
6. The US government is one of the main proponents of the view that there are no
economic, social or cultural rights. Of course, various stripes of economic liberals
and social conservatives also support this view.
7. Among the other important elements of the corpus of international human rights
law are the International Covenant on Civil and Political Rights, the Geneva
Conventions, the Convention on the Elimination of All Forms of Discrimination
against Women, and the Convention on the Rights of the Child.
8. William O’Neill and Vegard Bye (2002: 17), consultants to the UN Office of the
High Commissioner for Human Rights, refer to a ‘legalistic approach to human
rights [that relies] ... on legal jargon and obscure references to arcane procedures
that no one has the time to remember’. Sarah Forti (2005) calls it the ‘legal cen-
tralist approach to human rights’.
 Lauchlan T. Munro 43

9. The religious origins of the natural law tradition are obvious in the naming of
two of the main UN human rights treaties, which are called ‘covenants’ (UN
1966a; UN 1966b).
10. And all of these things are found, albeit under different names, in the Universal
Declaration of Human Rights.
11. Also frequently known simply as ‘basic needs’.
12. Subsequent research has shown that the relationship between growth and the
satisfaction of needs is varied and complex (Afxentiou 1990; Mehrotra and Jolly
1997).
13. In the short term, some redistribution might be needed via the fiscal system.
14. Or from just about any other school of modern economics, for that matter.
15. David Hulme anecdote told at the opening of the Conference on ‘Winners and
Losers from Rights-Based Approaches to Development’, University of Manchester,
21 February 2005.
16. This is actually a caricature of the basic needs school. The 1970s basic needs
school (for example, Streeten et al. 1981) dealt systematically with dignity, secu-
rity, agency and participation.
17. Or of any other public policy mechanism outside of the realm of judicial and
quasi-judicial institutions.
18. See endnote 7.

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