Regional Conference on

Enhancing Social Protection Strategy in Asia

and the Pacific
Manila, 21-22 April 2010

A Social Protection Index for Asia

J. Wood, Halcrow Group Ltd.

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not
necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of
Governors, or the governments they represent. ADB does not guarantee the accuracy of the data
included in this paper and accepts no responsibility for any consequence of their use. Terminology used
may not necessarily be consistent with ADB official terms.
 Study Objectives
• To provide quantitative information on Social
Protection in Asia which would:
1. increase awareness about SP as a means of reducing
poverty.
2. support and strengthen SP activities in DMCs.

• AND for the first time:

3. enable inter-country comparisons of SP provision.
4. provide the basis for monitoring changes in SP provision
over time.
5. establish a database of social protection schemes
covering the whole of Asia.
 Definition of Social Protection
- the SPI Definition

The set of policies and programs that enable

vulnerable groups to prevent, reduce and /or cope
with risks, AND that:

– are targeted at the poor or the vulnerable;

– involve cash or in kind transfers; and

– are not activities which are usually associated

with other sectors such as rural development,
basic infrastructure, health and education.
 Definition of Social Protection
- Main Types of Programs Included

• Labour market programs

• Social security and insurance
• Social assistance/ welfare.
• Micro-credit/ finance programs.
• Child protection programs including those
providing educational assistance.
 The Social Protection Index (SPI)

The SPI is:

• calculated for each country following the same
methodology
• a single summary measure of a country’s Social
Protection programs.
• similar to other commonly used indexes, e.g. the
HDI, FTSE100 and the CPI
• a summary of a quite complex system.

GUIDING PRINCIPLES:
• Simplicity and ease of computation.
• Understandable and interpretable
• Availability of data.
• Use existing and accepted models like the HDI.
 The Social Protection Index (SPI)
• The SPI is derived from four Summary Social
Protection Indicators (SPSIs):

– SP EXP: Total SP Exp. / GDP

– SPCOV: SP beneficiaries / target population
– SPDIST (poverty targeting): Poor beneficiaries/ Poor
population.
– SPIMP: Per capita SP expenditure on the poor as %
of poverty line income.

The SPSIs are then scaled, weighted and combined

into a single, summary measure of a country’s Social
Protection provision– the SPI.
 The SPSIs
There is a symmetry about these 4 indicators:
• two are related to expenditure
• two to coverage;
• two involve general targeting and
• two relate specifically to the poor.

Variable
Expenditure Coverage
Targeting

General SPEXP SPCOV

Pro-Poor SPIMP SPDIST

 Results - The SPSIs
Region Countries SPEXP SPCOV SPDIST SPIMP
Central Asia 7 6.8% 50% 75% 33%
South Asia 7 3.1% 23% 55% 15%
East Asia 9 4.8% 43% 64% 32%
Pacific 8 4.5% 22% 35% 11%
HDI Group Countries SPEXP SPCOV SPDIST SPIMP
High 4 7.8% 66% 75% 33%
High medium 12 4.4% 39% 55% 15%
Low medium 6 6.8% 36% 64% 32%
Low 9 3.0% 17% 35% 11%
ALL ASIA 31 4.8% 35% 57% 23%
 The Results – SPI Values
Above average Average* Below average
Japan 0.96 Nauru 0.42 Philippines 0.20
Korea 0.76 Vietnam 0.38 Laos 0.19
Kyrgyzstan 0.62 Malaysia 0.36 Nepal 0.19
Mongolia 0.60 Marshall Islands 0.34 Cambodia 0.19
Uzbekistan 0.57 Armenia 0.34 Bhutan 0.17
Cook Islands 0.55 Bangladesh 0.34 Fiji 0.15
Kazahkstan 0.54 Indonesia 0.33 Tonga 0.08
Azerbaijan 0.53 Tajikistan 0.33 Vanuatu 0.08
Sri Lanka 0.47 Tuvalu 0.30 Pakistan 0.07
India 0.46 Maldives 0.30 PNG 0.01
China 0.45
 The Results – A (very) Brief Overview
• SP Expenditure is dominated by social insurance: apart
from Japan and Korea, and some Central Asian countries, SI
generally only benefits the formal and public sectors; exceptions
are mostly countries with extensive MCF programs.
• SP coverage varies considerably within and between countries,
regions and HDI groups reflecting different approaches and
priorities in SP provision, as well as historical considerations,
across Asia.
1.00
0.90
0.80
Coverage Ratios

0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Unem‐ E lderly Health C are P oor‐S A P oor‐MC F Dis abled C hildren
/Underemployed

High A ll medium L ow
 The Results – A (very) Brief Overview (2)

• Coverage of, and expenditure on, formal social

Byassistance/ welfare programmes also tends to be
limited.
region
• Greatest coverage is usually achieved by the targeted
programs, e.g:
- food aid, food/ cash for work
- educational assistance,
- targeted/ subsidised health care,
- MCF schemes (especially in South Asia).
By• HDI
These programmes enable around half the poor
Grouppopulation in Asia to receive some social protection.
• However the average ‘impact’ of these programmes is
only equivalent to around 23% of the poverty line.
 The Results – A (very) Brief Overview (3)

• The extent of social protection is linked to a

country’s levels of human development and
wealth.
• BUT the correlation is not perfect. Some
countries have much higher levels of social
protection than one would expect from their
HDI or GDP per capita rankings, and vice
versa.
• This indicates that governments have the
potential to provide some level of social
protection irrespective of their
developmental situation.
 The SPI and the HDI
Korea Japan

1.00

0.90

Mongolia, Korea Japan

0.80
Kyrgyzstan,
0.70 Uzbekistan

0.60
SPI Value

0.50

0.40

0.30

0.20

0.10 r= 0.58
.
Tonga
0.00 PNG Pakistan Vanuatu
0.5 0.6 0.7 0.8 0.9 1

HDI Value
 Uses and Applications of the SPI (1)

Level of Analysis Value to Policy Makers Possible Applications

SPI Inter-country comparisons Policies to improve SP
of social protection provision; targeting of countries
provision; changes over for assistance; demonstration of
time. effectiveness of new (or
extended) SP programs.
SPSIs Aspects of SP which are Where to concentrate more
above and below average. detailed investigations.
Distribution of SP Categories of SP where Increased SP provision/
Expenditure/ expenditure is ‘lagging’; expenditure to target groups
target group target groups where with below average coverage
coverage ratios coverage is particularly ratios.
low.
SP Programs Targeting of programs; Reviews of the effectiveness
average benefits; extent of and targeting of existing
coverage, etc. programs.
 Uses and Applications of the SPI (2)

• Initial policy implications can be generated by

simple analysis:
- Coverage is high → improve existing programs
- Coverage is low → develop new programs
- Country is poor → emphasise targeted programs
- Country’s SPI rank is low relative to its GDP per capita
or HDI ranks → potential to improve its social protection
provision should be greater through extensions to
existing programs or development of new ones.
- Country’s SPI rank is high relative to its GDP per
capita rank → improve effectiveness of existing
programs.
 Uses and Applications of the SPI (3)

SP Provision in Urban and Rural Changes in SP Provision over

Areas - China time – Mongolia, 2002 - 2004
SPEXP
1
0.8
0.8
0.6 0.7

S c a le d In d ic a t o r V a lu e s
0.4
0.6
0.2
SPIMP 0 SPCOV 0.5
RURAL
0.4
URBAN
0.3

0.2
SPDIST 0.1

0
The SPI SPEXP SPCOV SPDIST SPIMP
 Conclusions (1)

• The bottom line is that SP is becoming more firmly

established within poverty reduction strategies and
these activities need to be regularly monitored and
evaluated – this requires quantitative information.
• The SPI, the SPSIs and associated database and
country reports now cover 31 Asian and Pacific
countries which together provide an important
addition to the previously limited statistical
information.
• These data can be used as the starting point for more
detailed studies and monitoring of SP activities by
international agencies, governments and SP
programme deliverers.
• The study also showed that updating is not a
particularly onerous task.
 Conclusions (2)

• The SPI methodology is considered to be generally

robust, simple to produce and easy to interpret . Above
all, it can be used to generate policy implications.
• There will always be interpretation issues so attention
should not be too focussed on the headline results.
• The SPI methodology is not perfect and some issues
(e.g. health provision) are still problematic.
• BUT 2 years after the study was completed, the basic
methodology is still considered to be sound with no
obvious alternatives suggesting themselves.
• The priorities are therefore to establish:
- the regular collection of data on expenditure,
beneficiaries and targeting for major SP programmes.
- a periodic updating of the national SPSIs and SPI.