MR Microinsurance_2012_03_29.indd - International Labour ...

44 Emerging issues
to develop the future income-earning activities that could enable them to recover
and improve their socio-economic situation.
3) Vulnerability reduces people’s readiness to extend their economic activities and
thus improve their socio-economic well-being. People who are vulnerable to risks
such as illness or unemployment are reluctant to invest any excess income in productive
capital or education. This would help them to increase their income but
also imply some additional risks. Instead, they tend to accumulate funds or assets
so that these can be accessed easily whenever a risk event occurs (e.g. to pay for
medical treatment). Similarly, an awareness of their vulnerability to uninsured
risks can lead to the use of outdated, though less risky, production technologies. 2
The objective of social protection is to break this vicious circle. This chapter
defines social protection as the total set of actions that are carried out by the State
or other players (e.g. commercial companies, charitable organizations and selfhelp
groups) to address risk, vulnerability or chronic poverty. This description
constitutes a compromise between the different positions taken by the relevant
international players with regard to the meaning of this term. The ILO’s definition
is comparatively narrow. It sometimes uses the term “social protection” as a
synonym for “social security”. 3 In most cases, however, it prefers to use “social
security”, which involves only risks that are typical for people who derive their
income from paid labour. 4
However, most other definitions are broader. The World Bank, for example,
considers that social protection encompasses all “public interventions to 1) assist
individuals, households, and communities to better manage risk, and 2) provide
support to the critically poor” (Holzmann and Jorgensen, 2000, p. 3). Similarly,
the Organisation for Economic Co-operation and Development (OECD) refers
to social protection as the “policies and actions which enhance the capacity of
poor and vulnerable people to escape from poverty and enable them to better
manage risks and shocks” (OECD, 2009, p. 10).
2 For empirical evidence on these effects see Bird (2001); Fafchamps and Minten (2008); Lichand (2010).
3 In at least one publication, social protection is defined as “the set of public measures that a society
provides for its members to protect them against economic and social distress that would be caused by
the absence or a substantial reduction of income from work as a result of various contingencies (sickness,
maternity, employment injury, unemployment, invalidity, old age, and death of the breadwinner);
the provision of health care; and, the provision of benefits for families with children” (García and
Gruat, 2003, p. 13).
4 In a recent major publication, for example, the term “social security” is taken to cover “all measures
providing benefits, whether in cash or in kind, to secure protection, inter alia, from (a) lack of workrelated
income (or insufficient income) caused by sickness, disability, maternity, employment injury,
unemployment, old age, or death of a family member; (b) lack of access or unaffordable access to
health care; (c) insufficient family support, particularly for children and adult dependants; (d) general
poverty and social exclusion” (ILO, 2010, p. 13).