1 sw23a: introduction to social policy development globalisation and social policy

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SW23A: Introduction to Social Policy Development

Globalisation and Social Policy

Objectives

Explaining the current developments in Caribbean social policy

Delimiting the paradigmatic shifts Analysing the impact of globalisation and

community participation in social policy Examining the needs of vulnerable groups

including the disabled and children

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Paradigms

Traditional (Prevailing)

Latent / Emergent – arising from economic pressures due to the introduction of Structural Adjustment and Stabilization programs of 1980s

Perhaps a mixture of the best features of the two might achieve greatest efficiency & efficacy

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Paradigms

Important Dimensions to be Considered When Comparing both Models

Institutional Forms Decision-making process Financing Objective Criterion re priorities for expanding system Beneficiary population Approach Indicator used

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Institutional Form

Traditional (Prevailing) EmergentState monopoly of all social services

Finance

Design

Implementation

Control

Unified functions performed by state

Multiple sub-sectors (Welfare Pluralism involves many actors)

State

Private (commercial)

Philanthropic (NGOs)

Informal (family)

Separate functions e.g. commercial involvement in public insurance and pension schemes. Govt. sets regulatory framework and rules for investment but allows firms to manage public funds.

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Institutional Form

Traditional (Prevailing) Emergent

Centralization – All decisions taken at Central Government/Federal level.

Advantages – Govt. takes advantage of economies of scale, ensures standard quality, especially when local agencies lack capacity/skills.

Disadvantages - may favor dominant groups in capitals/main towns and ignore rural areas

- one size does not fit all, local differences/needs cannot be addressed.--limited public participation possible

Decentralization – Advantages

-leads to tailoring of solutions for particular needs,

-greater attention paid to rural areas, -encourages local participation, -allows for greater choice in solutions,

Disadvantages-local regions may lack capacity and could cause quality variations in social services provided in each area

- poor areas may not generate enough tax revenue to support all services required.

Centralization

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Centralization can lead to inefficient resource allocation, favouring of dominant/well-organised and vocal groups located in capital or main towns, inhibited participation by citizens; cost implications for service users (members of the public travel time etc.) and for service providers (HSOs must transport goods to various locations if bulk buying is used).

Susceptible to corruption.

Advantages of Decentralization

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• Advantages of Decentralization- greater social consensus – local

participation benefits- greater control of bureaucracy- smaller scales could mean greater

opportunity for cost-benefit analysis

- paves the way for widespread development of system-wide capabilities.

Disadvantages of Decentralisation

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• Disadvantages of Decentralisation- local autonomy in providing social

services could lead to someunacceptable variations in thestandards of services delivered.

- increased research (offset by increased relevance of policy and programme), monitoring and evaluation costs.

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Decision-making process

Traditional (Prevailing) EmergentBureaucratic Macro-strategies

“The State knows what to do”

Users have no say or choice in the type of service provided by State

- Resources allocated

administratively

By projects presented by end-users “Innovative capacity

exists throughout society

and every effort should be

made to take advantage of

it” (Franco, 1996)

- Resources allocated competitively, tendering used

- Allocation of funds proposed by

users e.g. (Jamaica Social Investment Fund, CHASE Fund)

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Financing – Source of Resources


The State covers all costs – from fiscal sources which must meet multiple, growing demands

Co-financing – private sector invlovement e.g NCB paying exam fees, school subsidies; tax rebates received in exchange for help.

“No Charge = No good”: – view that anything provided free tends not to be fully appreciated by recipients

Recovery of costs: “He who can pay should pay” – cost sharing in schools and hospitals

Risk: marginalization of the poor, as they may be unable to pay user fees

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Financing – Resource Allocation


Subsidization of supply, e.g. subsidies on food items like rice, oil chicken, or using price controls

- Absence of competition, all firms must charge the same price

-Those who do not need the benefit (middle and upper classes) receive it.

Subsidization of demand – e.g. giving vouchers to the poor to buy basic food items or pay for education

or PATH which pays school fees for poor directly to the school once the family selects school

Creation of quasi-markets

- Allows competition and freedom to choose

- Users must have enough information to select among service providers

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Objective – Universality?


Universal supply

- High cost, Low impact especially among those who need it most. E.g. Govt provides free primary education to all but there is low attendance in rural areas. Also now free secondary tuition – no impact on attendance.

- Homogeneous supply to all favours those who are best-informed and best organized . E.g. NHF heavily used by middle class.

Universal satisfaction of

people’s needsPrinciple of Equity -

“Unequal treatment for those who

are economically and socially unequal” – affirmative action / positive discrimination

Homogenous supply for heterogenous situations only perpetuates the original differences

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Criterion re Priorities for expanding system


Gradual expansion of social protection as more resources become available

-Top down, those who need it most often last to receive help

(Franco refers to this as Segmented access)

“Less social expenditure = less

equity”

e.g. NIS not given to those who did not contribute regularly over their working life

The neediest first

Instrument: targeting the poorest

Targeting allows improvement in programme design as the more accurate the identification of the problem and nature of the beneficiaries, the easier to design specific interventions. Targeting also ensure more efficient use of scarce resources and increases impact of the programme by concentrating resources on the highest-risk groups.

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Criterion re Priorities for expanding system


- Attention given to what the sources of funding want.

– identifying potential beneficiaries as precisely as possible & designing programme to ensure major per capita impact on selected group

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Beneficiary Population


The middle class

Organised groups who have the capacity to pressure the state

The poor – often do not benefit as much as the middle classes from government spending.

Reality is that their situation is dire

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Approach


Centered on the means – e.g. expanding the coverage of services provided

- Increasing Social infrastructure

and current Expenditure e.g. building more schools

Centered on the ends

Impact: Quality of service

- How much did beneficiaries actually receive when compared to original objectives?

- Has poverty been reduced? By how much? Evaluation of achievement of programme goals is critical

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Indicator Used


Size of Public social expenditure –

Expenditure may be high, but not efficiently used, (mainly salaries) also programmes poorly implemented

Cost-impact ratio –were resources efficiently used, was there max impact for minimum cost?

What were the measurable increases in HC, and at what cost?

Implications

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• Under the traditional paradigm, there is prevailing view that more resources available means more persons were helped or that the system lowered the number of poor persons.

• Necessary to disaggregate social expenditure and analyse the real beneficiaries.

• Cost-impact ratio is recommended in Emergent paradigm - optimization of resource use.

GLOBALISATION

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What is Globalisation?

Globalisation can be viewed as the increased international economic interdependence and interconnectedness of world markets and societies facilitated by rapid advances in communication and transportation technologies.

What is Globalisation?

Often referred to as creation of the “global village”

Not a new phenomenon, globalisation has occurred in waves. The first wave1800s to 1930s (colonial period).

The volume of the flow of goods and capital in the 1800s was only exceeded by the wave of globalisation of the late 1970s

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Distinctive Features of the Latest Wave of Globalisation (mid 1970s --)

Change from nationally organised economic activity/growth to globally organised economic activity e.g. World car vs. German car. (See article on Red Stripe on OURVLE)

The rise of huge transnational corporations (TNCs) some of which are larger than individual states.

TNCs which dominate markets can exert great pressure on governments .

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Transnational corporations (TNCs) also called multinational companies.

A transnational, or multinational, corporation has its headquarters in one country and operates wholly or partially owned subsidiaries in one or more other countries.

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The subsidiaries report to the central headquarters.

The growth in the number and size of transnational companies since the 1950s has generated controversy because of their economic and political power and the mobility and complexity of their operations.

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Some critics argue that transnational corporations exhibit no loyalty to the countries in which they are incorporated but act solely in their own best interests.

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Growth of regional trading blocs, NAFTA (1994), EU (1993), CSM (2006), Mercusor (1991), Andean Pact (1969)

Underlying philosophy – Economic Neo-liberalism, open markets and free trade. (Ferguson, Lavalette et al, 2002).

Asian tigers held up as examples of export-driven success stories, but McMichael, (2004) points out that these countries, Singapore, Taiwan, Hong Kong and South Korea began as centrally planned not liberalised economies.

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Growth of regional trading blocs, Nafta, EU, CSM, Mercusor, Andean Pact

Mercosur was established in 1991 and encompasses Argentina, Brazil, Paraguay and Uruguay. Venezuela was accepted as a member in 2006 and is currently in the process of integrating into Mercosur.

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The Andean Pact – The Andean Community is the regional integration in the Andean countries consisting of Bolivia, Colombia, Ecuador, and Peru, along with some associate and observer countries also located in Latin America that was started in 1969 with the signature of the Cartagena Agreement creating the Andean Group with the objective of creating a customs union and a common market.

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In 1979 the Andean Council of Foreign Ministers was established at the Andean Tribunal and the Andean Parliament in Bogotá.

In 1985 the Andean Parliament agreed to the establishment of the Andean University Simon Bolivar located in Sucre, former capital Bolivia.

In 1993 it established the free trade area; 1995 the Andean countries adopted a Common External Tariff.

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Structural adjustment programmes (SAPs) opened economies in the South and accelerated the process of globalisation for those countries.

Underlying belief of globalisation is that increased trade will benefit all nations - “a rising tide lifts all boats”. Some economies were not able to withstand foreign competition associated with open markets, e.g. local manufacturing and agriculture in Jamaica.

Free trade, is not necessarily fair trade.

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Features of Globalisation

Spread of US cultural influence and value systems via internet and cable TV.

Increased culture of individualism (each man for himself approach) seen in Caribbean nations, undermines collectivism and community spirit.

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Main Actors

GATT – General Agreement on Tariffs and Trade Created in 1947 after WWII. Aim was to reduce tariff barriers, quotas and trade subsidies

World Trade Organisation established Jan 1995- product of the GATT Uruguay Round. WTO is the major institution in process of globalization. WTO Trade rules are enforceable, it can punish member states for violation.

WTO has power to regulate all aspects of trade - agriculture, investment, intellectual property, services Many groups worldwide oppose the WTO.

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Main Actors

WTO rules based on theory of comparative advantage - Specialize in production of goods which can be produced efficiently and import other goods.

Small island developing states (SIDS) lack economies of scale, and adequate subsidy protection to produce most goods more efficiently than other countries.

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Main Events Affecting Caribbean

NAFTA – 1994 Led to demise of Jamaica’s free-zone

garment sector Factories relocated to Mexico Job losses for low-skilled women

CARICOM – CSM Winners and losers, Jamaica is a net importer

from CARICOM, imports far exceed exports Trinidad emerged as dominant economic

power, largely owing to its subsidized energy. OECS has formed economic union with T’dad, planning to move to political union.

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WTO 1997 ruling against EU LOME Banana regime – led by Bill Clinton on behalf of Dole and Chiquita. Preferential tariff treatment by EU deemed in violation of WTO rules

Major economic fall-out in the Windward islands,

Grenada, St. Lucia, St. Vincent and Grenadines, Dominica

Increase in poverty in Windward islands Economic collapse of Dominica led to IMF agreement Jamaica ended its banana exports to EU in 2008

partially due to lower earnings and repeated hurricane damage. Major unemployment fallout in banana parishes.

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WTO 2004 ruling against EU LOME sugar protocol – led by Brazil, Thailand and Australia

EU forced to phase out preferential arrangement with ACP sugar producers which included duty-free access for agreed quantities of sugar and a guaranteed price approximating that applied for European beet farmers

Agreement phased out between 2005-2009

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Trinidad and St. Kitts ended sugar production

Jamaica cut sugar production, made some workers redundant, divested factories

B’dos producing more high-end speciality sugars for hotel/tourist market. Moving to diversify into ethanol production

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Economic Partnership Agreement (EPA) – Oct 2008 with EU Based on reciprocity, not the one-way

preferential access of LOME Some items excluded and delayed phase-in for

others Wide-ranging, includes trade in services,

government procurement, investment rules which were not part of LOME

May influence negotiation with Canada and US who intend to negotiate FTAs with Jamaica.

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Globalisation Opportunities

Increased availability of a wider array of technologies, goods and services.

Increased competition leading to lower costs in some sectors, e.g. cellular competition between Lime, Digicel and Claro

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Increases access to investment capital, but most Foreign Direct Investment (FDI) has gone to developed, not developing nations.

Many Third World countries lack the capacity to absorb FDI, i,e. good physical infrastructure, highly skilled workforce etc. – Note Intel’s Costa Rican example.


Third World nations are more dependent on FDI to generate growth than First World nations with FDI accounting for a larger share of their GDP (15% vs 9% for First World countries (Hann, 2007).

Globalisation has increased economic growth of some countries, but not at rates faster than in previous decades (Hann, 2007) 42

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Challenges/Concerns

“Race to the bottom” –resulting from intense competition among states to attract FDI from TNCs. Countries offer lower wages for labour, lower corporate tax rates, (in Jamaica gov’t offers 100% tax holidays to some investors, e.g. those who build hotels).

Also sees less enforcement of occupational health and safety standards, environmental protections also union busting or suppression, e.g. collapse of buildings and injury/death of workers at Bahia Principe hotel site in St. Ann due to lack of adequate safety measures. Also hotel site was deemed an environmentally protected area but building permit was still issued by the GOJ.

Challenges/Concerns

Race to the bottom - Use of Child labour especially in Asian countries

Global Capital flows liberalised but labour has seen increased controls/ immigration laws.

Movement of capital causes labour dislocations E.g. NAFTA led to closure of factories and relocation of jobs to Mexico, Jamaican workers could not relocate to keep those jobs. 44

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Challenges/Concerns

Has increased international inequality between and within nations, as some sectors collapse while others emerge, especially in Africa, Caribbean and Latin America (McMichael, 2004, Hann, 2007)

Increase in poverty among marginalised groups, e.g. ethnic minorities (Hann, 2007) and the low-skilled

Challenges/Concerns

Reduction of government tax revenue e.g. from lower import tariffs/duties.

These duties are often not used to protect competing local products, e.g. car import duty, but to generate revenue to fund social services.

TNCs often avoid paying corporate tax locally by locating global headquarters in tax havens e.g. Amazon and Apple.

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Challenges/Concerns

Trade liberalisation pressures from WTO/ IMF/WB led to increased agricultural imports and collapse of local agriculture in the South - increased rural poverty.

New global movement focused on food sovereignty has emerged to revitalise local farming in Southern countries (McMichael, 2004). In Ja this is seen in the “grow what we eat and eat what we grow campaign”.

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Challenges/Concerns - Labour

Increased long-term unemployment due to relocation of jobs to cheaper manufacturing sites or closure of industries like banana and free-zones

Job-less and job-loss growth – economic growth often associated with job losses as global competition forces firms to increase use of labour-replacing technology to increase “efficiency”.

NB: Zuboff’s Catch-22


Increased migration of skilled workers, (brain drain in Jamaica) and illegal migration of unskilled workers.

Huge exploitation of undocumented workers worldwide. Not only of Caribbean, African and Latino workers in US/EU but also Haitians exploited in Dom Republic and Jamaica. Many often work in near slavery conditions.

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Informalisation and Casualisation of Labour –firms move to temporary or part-time contracts with few or no benefits, limited union protection, (McMichael, 2004)

Concepts of workplace being a life-time employer with full-time work, pensions and social and legal protection, perks and benefits is fast becoming extinct.

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Challenges/Concerns

These labour market changes will require provision of more social protection and social security, e.g. safety nets, health insurance, and pensions by states.

However loss of tax revenue may limit what governments can offer. Residualization of some aspects of welfare often results e.g. cost sharing.

Recent expansion in universal social services in

Caribbean have been done to address increases in inequality and build human capital e.g. free health care in Jamaica, free tertiary education in T’dad

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Challenges/Concerns Increase in global criminal networks

facilitated by technology advances, undermines state control.

Globalisation also said to cause loss of local cultural identities and distinctiveness - Ritzer’s McDonaldization thesis.

McDonaldization has been successful because of four basic dimensions. McDonaldization offers consumers Efficiency (2) Calculability (3) Predictability and (4) Control.

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Challenges/Concerns Deskilling - A work force with the minimum

abilities possible to complete simple focused tasks. This means that they can be quickly and cheaply trained and are easily replaceable.

Workers on an assembly line that are hired and trained to perform a single highly rationalized task. Although this may be a very efficient method of operating a business, an irrationality that is spawned can be worker burnout.

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Challenges/Concerns

TRIPS (Trade Related Intellectual Property Rights) – trading regulation of the WTO limits the production of affordable generic drugs to combat diseases, e.g. generic HIV drugs needed by poor countries

TRIPS criticized for not recognising traditional knowledge developed by small societies in the development of patented pharmaceuticals E.g. Neem Tree in India; patents registered by

US and Japanese companies.

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Challenges/Concerns

GATS - General Agreement on Trade in services. Jamaica is a signatory to that WTO agreement which requires liberalisation of trade in services including health and education markets.

Clause requires that education subsidies given to local Universities should also be extended to foreign colleges. If implemented this could result in a withdrawal of subsidies to local colleges incl UWI and higher tuition fees

Globalisation of Social Policy

Globalisation of Social Policy – Occurs when global governance structures like the UN, World Bank, IMF and WTO exert greater influence on states policy making direction (Yeates, 2001)

Proliferation of international treaties since 1970s – Third World states urged to ratify by UN e,g. Convention on Rights of Child, UN Millennium Development Goals – (students should be aware of MDGs)

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“Social policy contributes to governance and renewed legitimation of the State, but its importance today lies above all in its contribution to the formation of human capital, which is indispensable for the medium-term competitiveness of our countries.” (Franco in CEPAL Review 58, April 1996)


Benefits International treaties have brought many

important social issues to local attention e.g. gender discrimination, human rights abuses, child issues, disability concerns (Yeates, 2001)

Sharing of policy initiatives globally leads to increased standardisation in areas such as human rights, public health systems and child protection. 58


Sharing of “best practices” builds capacity in social service delivery in the South.

Drawbacks

Bias in policy directives towards Western approaches often overshadows local expertise, or are not culturally relevant.

Imposition of global social policy frameworks like MDGs reduces national sovereignty and constrains social policy making.

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Funding agencies like UNICEF, UNDP tie grant/loan funds to Millennium Development Goals which may not be the priority areas for a government. E.g. primary education is already universal in Jamaica, secondary education is not.

Neo-liberal approach institutionalised

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Political Impact

Globalisation led to a consolidation of the ideology of neo-liberalism and of Anglo-American capitalism as the dominant economic system – this is being rejected in aftermath of current recession, as US and EU businesses turn to their states for bailouts, also many South American countries have been embracing socialist policies e.g. Venezuela

High youth unemployment leads to alienation in among youth –feel helpless in the face of global market systems leads to increase in anti-social behaviours, terror groups (McMichael, 2004)

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Thinking Point: Which House of Government? – Robert Campbell, Chairman of Tasmania Together Progress Board

Partnerships – Govt/TNCs/Community Control and Rules

Inside directs outside Consultation and Customer Service

Strategic planning begins, but in back rooms Connections and Collaborations – outside

starts directing inside Gov’t. not sole provider of solutions

Strategic planning with community Gov’t. as facilitator

1 sw23a: introduction to social policy development globalisation and social policy

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caribbean social policy

local participation

greater opportunity

greater choice

greater attention

thestandards of services

advantages of decentralization

inhibited participation