Safety Nets, Politics, and the Poor Transitions to Market Economies

by Graham, Carol L.

• ISBN13: 9780815732280
• ISBN10: 0815732287
• Format: Hardcover
• Copyright: 1994-09-01
• Publisher: Brookings Institution Press

Summary

"This well-written book makes a valuable contribution to the limited work done so far in the area of social safety nets. It should be of interest to policymakers and researchers in both economics and poltical science." Finance & DevelopmentCountries 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 unions--which have a great deal to lose in the process of reform, governments might better concentrate their efforts on poor groups that have rarely, if ever, received benefits from the state. The poor, meanwhile, may gain a new stake in the ongoing process of economic and public sector reform through organizing to solicit the state for safety net benefits.This is the first book to provide a detailed and comparative analysis of compensation during economic reform. Graham offers specific examples of resource allocation in three regions: Latin America, Africa, and Eastern Europe. She features case studies from Chile, Bolivia, Peru, Senegal, Zambia, and Poland.Carol Graham, a guest scholar in the Foreign Policy Studies program at Brookings, is coauthor of A Half Penny on the Federal Dollar: The Future of Development Aid (Brookings, 1997) and author of Peru's APRA: Parties, Politics, and the Elusive Quest for Democracy (Lynne Rienner, 1992) and From Emergency Employment to Social Investment: Alleviating Poverty in Chile(Brookings 1991).

Author Biography

Carol Graham, a visiting fellow in the Vice Presidency for Human Resources at the World Bank, is a former guest scholar of the Foreign Policy Studies program at the Brookings Institution.

Table of Contents

The Brookings Institution	p. v
Foreword	p. vii
Market Transitions and the Poor: New Coalitions for Economic Reform?	p. 1
From Emergency Employment to Social Investment	p. 21
Conclusion	p. 51
The Politics of Protecting the Poor during Adjustment: Bolivia's Emergency Social Fund	p. 54
Conclusion	p. 77
The Politics of Reform without a Safety Net: the Case of Peru	p. 83
Conclusion	p. 112
The Vocal versus the Needy: the Politics of Poverty Alleviation during Adjustment in Senegal	p. 116
Conclusion	p. 144
The Politics of Adjustment and Poverty in Zambia: "The Hour Has Come"	p. 148
Conclusion	p. 191
The Political Economy of Safety Nets in Post-Socialist Economies: the Case of Poland	p. 193
Conclusion	p. 246
Comparing Experiences with Safety Nets during Market Transitions: New Coalitions for Reform?	p. 249
Conclusion	p. 270
Table 8-1	p. 272
Experiences with Safety Net Programs	p. 280
Notes Chapter 1	p. 293
Index	p. 371
Table of Contents provided by Publisher. All Rights Reserved.