Social Protection

Building social protection floors
and comprehensive social security systems

Module 13: Assessing affordability and impact on fiscal space

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Objectives

This module aims to increasing knowledge on the concepts of affordability and fiscal space, as well as on the impact of expanding or implementing new social protection provisions on government budget. It also aims to provide ideas on various measures to increase fiscal space through budget reallocations or tax reforms. Finally, it aims to foster a discussion on ways to convince the government to increase fiscal space and invest in social protection.

 

Key questions

  1. What is affordability and fiscal space?
  2. How to forecast government revenues and expenditures?
  3. How to calculate fiscal space and finance fiscal deficit?
  4. How to convince governments to invest in social protection?

 

Takeaway message

 

Whereas the concept of affordability relates to the capacity of a country as a whole to finance additional social protection benefits, that of fiscal space indicates whether the government can afford financing these benefits from its own budget. Adding new social protection benefits will inevitably result in deteriorating the fiscal balance. Thus, ways to reduce the deficit need to be devised by increasing government’s resources or cutting “unnecessary” expenditures and reallocating the available resources to social protection. In any case, the government needs to understand that social protection shall not be considered as a cost but as an investment in human capital.

 

Master module 13: Assessing affordability and impact on fiscal space

Module for other countries >>
 

Presentations

Asia: Assessing affordability and impact on fiscal space

Myanmar - Cost and impact of social protection

Myanmar - Assessing the impact on fiscal space

Myanmar - International experience: Impact of social protection programs

Myanmar - UNICEF: Social Investments in Myanmar

Presentation used in other countries >>

Didactical Material

Myanmar - Excercise sheet: How to formulate the desired impact of social protection schemes at country level?

Myanmar - Results: How to formulate the desired impact of social protection schemes at country level?

Myanmar - Exercise sheet: How to mobilize fiscal space?

Myanmar - Results: How to mobilize fiscal space?

Additional readings

Fiscal space and the extension of social security. Lessons learnt from developing countries

Videos

Part 1. Fiscal impact of the SPF

Part 2. Return on investing in the SPF

 

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On the last national dialogue workshop on costing and fiscal space, UNICEF was invited to present the social budget analysis results that was conducted in 2013. This way the ABND created a platform for conducting the exercise but also to exchange existing knowledge on social protection in the country and various agencies' analysis and evidence. This workshop was also an opportunity to exchange on the potential impacts of social protection programmes on poverty and inequality reduction, as social protection is not seen as a cost but rather as an investment. The World Bank presented some programmes that were successful in reducing poverty and achieving development outcomes around the globe. In addition, some micro-simulations on the potential impact of social protection schemes on monetary poverty were conducted in order to enrich the analysis of the ABND report and recommendations.
08.01.2015 - Lou Tessier
ABND Coordinators will add their comments/contributions here
09.01.2015 - Victoria Giroud-Castiella
Mongolia: In general, I find the methodology for the fiscal analysis of the ABND guide quite weak. In a country like Mongolia, where State¿s revenues for the coming years are depleting, the simple fiscal space analysis proposed in the guide gave quite alarming results, which for obvious reasons did not play in favour of a social protection floor in Mongolia.
25.05.2015 - Céline Peyron Bista
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