1963-2013 - 50 years of Research for Social Change

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Three New Research Projects Developed at UNRISD

13 Jun 2005

The recent arrival of Naren Prasad as a research co-ordinator at UNRISD, where he took up work in the area of markets, business and regulation and of social policy and development, has resulted in the approval by the Institute of a new research project on social indicators; the launching of the second phase of the research project on the commercialization of public services that focuses on water supply; and the elaboration of another new project on social development in small island countries that is to be unveiled soon.

Constructing a Social Policy Index

In order to shed light into the progress of social development, social indicators are required. For this, we have relatively well-established data on certain sectors such education and health. This has led to developing the human development index. Such data and index focus on the outcomes of certain policies on the general nature of development in a country. But how effective are governments in promoting social development in their countries and around the globe? In order to answer this question, we have to analyze the social policy of each government. In other words, we need to investigate how each government tries to influence social development outcomes. The emphasis here is not on the outcome, but on the policy or the response to a given social situation. Most of these policy interventions are in the form of social expenditure and government transfers. Hence, one way to proceed with this would be to look at the government’s social spending. The actual spending on such services may be an indication of government’s priorities (policy or response) in this area.

In the study of public policy, it is well-known that each response or policy is in reaction to a given situation and the general context within which such policies are undertaken. For example, within the context of increased globalization and the dominance of neoliberalism, what are governments’ policies to tackle the issues of poverty, inequality, unemployment, crime, ageing population, equity or access (and affordability) to basic social services such as education, health care, water, housing, etc. At present there is no such social policy index on a global level to show how a government reacts in terms of social policy to a given social situation. Therefore this research project intends to explore the pattern of social spending of governments and will try to come up with an index that characterizes some kind of policy orientation.

It will also try to bring together the various literature that are operating in some kind of isolation such as the growth and development literature, the globalization and governance literature, the welfare literature, and poverty literature. Government spending in the following social sectors will be considered in designing the index: education, health, social security and welfare, housing and community development. Various measure of social spending will also be used such as percentage of GDP, social spending per capita and social spending as a share of total government spending. Other variables, which influence or have some impact on the pattern of social spending will be taken into the analysis: Globalization (FDI, trade openness), Economic (economic growth, GDP per capita, government deficit/surplus), Governance (democracy, institutions, corruption), Population (population structure), labour force), Social situation (Poverty, Gini coefficient (inequality)), and Aid.

Social policy, regulation and private sector in water supply
How issues of equity, access, affordability are addressed

It has been argued that the private sector involvement in the water supply would amongst other things, help the poor have access to the service. This research project intends to investigate how the private sector involvement in water supply deals with poverty issues in terms of access, equity and affordability. It is set to explore the various social policies and regulation that are intended to help the poor. This research will also investigate the nature of regulatory mechanisms in place and their results. Concerning issues of access and affordability, household data from selected countries and cities as well as case studies will be used.

This research project on social policy and private sector involvement in water supply is considered both as an academic exercise and as having major policy implications for governments and international agencies. From an academic perspective, the project intends to investigate how relevant is the theory of private sector involvement in natural monopolies like water supply. It is often argued that the private sector involvement will achieve higher allocative and productive efficiency, strengthen the role of private sector in the economy, improve the public sector’s financial position, free resources for allocation in other important sectors such as social policy, and increase coverage. In natural monopolies like water supply there is market failure. In this context, it is argued that regulation is required to protect the private operator, the government and the consumers. The research will shed light to this argument and test the validity of it.

Concerning the policy implication, it will investigate whether governments are adopting the appropriate policy to solve the problems related to water supply. This will be analyzed within the general context of liberalization and deregulation of the economy propelled by international development agencies. The results will also illustrate whether these international agencies are advocating the relevant policies vis-à-vis the role of private sector in infrastructure projects in terms of promoting social development goals.

The objective of the research is to investigate whether private sector involvement in water supply is the right option, even with regulatory mechanisms in place. In order to explore this, the research will try to address issues surrounding poverty, access, affordability, and how social policies and regulation are designed to achieve the specified objectives of private sector involvement. The following issues will be addressed: Has the private sector involvement in water supply improved access, affordability or other specified objectives of the private sector involvement? How does social policies and regulation address issues of affordability and access? What is the role of tariffs (social tariffs, increasing block tariffs, metering)? How are policies designed to help the poor (minimum service levels, subsidies)? Are the poor able to benefit from the social policies in place? How are issues of access addressed? How can the private sector be made to serve poor customers? Through which mechanisms are these policies being regulated and enforced (laws, institutions, etc.)? What are the political, social and cultural institutions or norms in place to monitor the private sector involvement in water supply?

Social development in small island countries

Finally, a new research project is being elaborated at the moment that is set to focus on social development issues in small island countries. This may include issues such as international migration and welfare, social pact in small islands, or any other issue related to UNRISD’s research work.

Information compiled by Nicolas Bovay with Naren Prasad