6.2 Social protection: strengthening resilience to disasters

Social protection, including support payments and insurance against risk, does not reduce disaster risk in itself. Nor is it an alternative to development investments in public infrastructure and services, but there are two compelling reasons why social protection can be part of strategic DRM.

First, social protection instruments can enhance individuals’ and households’ disaster resilience, reduce poverty and stimulate human capital development (de Janvry et al., 2010; Siegel and de la Fuente, 2010). Successful social protection thus provides buffers that smooth consumption not only during and after, but also before disasters, and it protects household and community assets. This helps to avoid disaster losses cascading into other household impacts and outcomes, such as taking children out of school and sending them to work, or selling off productive assets (de Janvry et al., 2006; ERD, 2010; Guarcello et al., 2010) – coping strategies that have long-term negative consequences (López-Calva and Ortiz-Juárez 2009; Fernandez et al., 2011).

Second, many of these instruments are already being delivered on a large scale. They can be used to reach very large numbers of disasterprone households and communities through relatively minor adaptations of targeting criteria and timeframes, and often with comparably low additional costs.

The countries best able to take advantage of this opportunity are those that already have social policies supported by a wide range of legislative provisions (ERD, 2010), such as labour market laws (including the regulation of unemployment benefits), workplace health and safety regulations, basic entitlements and welfare payments, and support for marginal groups. Countries that have strongly developed social legislation, corresponding regulation and upto- date public registries find it easier to employ both targeted and universal social protection as instruments for DRM.

6.2.1 Conditional transfers

Almost 114 million people in Latin America and the Caribbean are receiving, or have received, conditional cash transfers as a means to reduce structural poverty over the past two decades (Table 6.1 and Box 6.2). Brazil’s Bolsa Familia and Bolsa Escola, well-known examples of conditional transfers, reach more than 12 million households (as of June 2010). In these schemes, households receive a monthly payment from the government, conditional on sending children to school (Behrman et al., 2005), attending health check-ups and ensuring vaccination (Gertler, 2004; Levy and Ohls, 2007), taking children out of work (ILO, 2007), and improving nutrition (Leroy et al., 2009). Several countries, such as Bangladesh and Ethiopia, also employ foodbased or combinations of food- and cash-based conditional transfers as part of their social protection systems (del Ninno et al., 2009).

Country	Social Assistance Programme	Start year	Beneficiaries (as of)
Honduras	Programa de Asignación Familiar-PRAF I/PRAF-BID II/PRAF-BID III	1990/1998/2007	150,000 households (2008)
Mexico	PROGRESA/Oportunidades	1997	5.8 million households (July 2010)
Nicaragua	Red de Protección Social-RPS	2000	30,000 households (2006)
Costa Rica	Superémonos/Avancemos	2000/2006	165,749 persons (2009)
Colombia	Familia en Acción-FA	2001	2.5 million households (June 2010)
Jamaica	Program of Advancement through Health and Education-PATH	2001	341,000 persons (2009)
Brazil	Bolsa Escola/Bolsa Familia	2001/2003	> 12 million households (June 2010)
Argentina	Programa Jefes de Hogar	2002	1.5 million persons (2005)
Chile	Chile Solidario-CHS	2002	1.15 million persons (2008)
Ecuador	Bono de Desarollo Humano-BDH	2004	1.74 million persons (August 2010)
El Salvador	Red Solidaria	2005	120,000 households (2009)
Dominican Republic	Programa Solidaridad	2005	463,544 households (May 2010)
Paraguay	Tekoporâ	2005	109,692 households (2009)
Peru	Juntos	2005	420,574 households (2009)
Trinidad and Tobago	Targeted Conditional Cash Transfer Programme (TCCTP)	2005	22,000 households (2007)
Uruguay	Ingreso Ciudadano/Plan de Equidad	2007	74,500 households (2009)
Panama	Red de Oportunidades-RO	2006	63,245 households (July 2010)
Suriname	Suriname´s Social Safety Net	2006	Unrecorded
Bolivia	Bono Jancito Pinto	2007	1.8 million persons (2009)
Guatemala	Mi Familia Progresa	2008	591,570 households (September 2010)
Bolivia	Bono Jancito Pinto	2007	1.8 million persons (2009)
TOTAL			approximately 114 million people [based on 4.8 persons per households (Bongaarts, 2001 x Bongaarts, J. 2001. Household size and composition in the developing world in the 1990s. Population Studies 55 (3): 263–279. . )]

These instruments potentially leverage multiple incentives. They contribute indirectly to household resilience by enabling the accumulation of assets to buffer disaster losses. In Mexico, for example, Oportunidades (formerly known as PROGRESA) protects education, particularly that of girls, and thus fosters the formation of human capital, offsetting shocks such as parental unemployment or illness (de Janvry et al., 2006). Similar successes have been confirmed in Indonesia (Cameron, 2002; Sparrow, 2007), Côte d’Ivoire (Jensen, 2000) and Peru (Schady, 2004). In addition, social protection that ensures income replacement during crises has a major, positive effect on the economy by stabilizing aggregate demand while having no negative effect on economic growth (ILO, 2010).

Given that in many countries disasters undermine the effectiveness of conditional transfers in addressing structural poverty, enhancing these instruments to strengthen disaster resilience increases their power to reduce poverty. Although such transfers were not designed to deal with disaster impacts, experience shows that they can be adapted to reach those at risk of losing their assets in a disaster, which prevents significant medium- to long-term increases in the number of recipients after disasters (Siegel and de la Fuente, 2010; Fernandez et al., 2011). The advantage of using conditional transfers in this way is that social protection for disasters can be built into existing large-scale programmes without the need to construct a new administrative structure. Whereas conditional transfers have been used this way in Latin America and the Caribbean, the HFA Progress Review indicates that only a handful of countries in Africa and Asia have them in place.


The use of conditional transfers to strengthen disaster resilience also poses challenges, because transfers are sometimes used in a way that undermines their principal objective to reduce structural poverty (Box 6.3). Furthermore, in many low- and middle-income countries, the poverty line is deliberately set very low, to reduce the cost of poverty reduction programmes and to broaden the tax base as much as possible (Box 6.4). As such, many non-poor but riskprone households are not included in such transfer programmes.





Another issue is to what extent conditional transfers and other social protection instruments should be targeted. On the one hand, the high cost of targeted programmes may reduce the impact of each individual transfer (ERD, 2010), reinforcing the argument for a universal minimum level of social protection. However, the example of community-led identification of beneficiaries in Rwanda (Box 6.5) shows that targeting can be effective when organized in partnership with risk-prone households and communities. Evidence to date suggests that Rwanda’s approach has been successful, particularly for households dependent on the informal economy (i.e., the part of an economy that is not taxed or monitored by governments) for their income (ERD, 2010). Such examples show that even low-income countries can set up fairly simple, non-contributory programmes that are administratively feasible and fiscally sustainable. These programmes can then serve as a first step to developing more complex and coordinated packages.

6.2.2 Temporary employment programmes

Employment strengthens individual and household resilience through secure income and gives households the opportunity to build assets. As such, employment is closely linked to disaster risk reduction (Krishnamurty, 2011). The ability of households to recover to pre-disaster income levels is higher when their pre-disaster income is higher (Muqtada, 2010). Furthermore, when growth in employment is accompanied by social protection, it is possible to avoid sharp declines in income following disasters.

Unlike conditional transfers, temporary employment programmes are intended to help individuals and communities smooth consumption in times of disaster by supplementing income. This is usually achieved through labour-intensive public service and infrastructure programmes, such as building rural roads, street cleaning and reforestation (Fernandez et al., 2011). Where these programmes are focused on building community assets that reduce risk, they have the potential to contribute to risk reduction (del Ninno et al., 2009). Examples from Bangladesh, Ethiopia, India and Malawi demonstrate how food- or cash-for-work programmes can significantly improve flood control, water conservation and irrigation infrastructure, and reverse land degradation (del Ninno et al., 2009; Pelham et al., 2011).

When conditional transfers cannot be adapted to target non-poor households before a disaster, temporary employment programmes may offer a way of providing additional or substitute income, though such schemes are not widely used. In the HFA Progress Review, only 18 out of 82 countries reported having employment guarantee schemes, but examples from Ethiopia, India and South Africa show that temporary employment programmes can have positive impacts if adapted to target risk-prone households and communities (see Box 6.6 for examples from Latin America).


Many existing employment programmes, though originally designed as temporary measures, have developed into permanent schemes with millions of people participating annually. The Mahatma Gandhi National Employment Guarantee Scheme, for example, reached around 68 million people in 41 million households in the 2009–2010 financial year alone, providing each of the employed with an average of 24 days work. The public works component of Ethiopia’s Productive Safety Net Programme covered approximately 7.6 million people by early 2011, almost 10 percent of the entire population. South Africa’s Expanded Public Works Programme, in operation since 2004, provides work for roughly 11 percent of the country’s unemployed, and by 2013–2014 it aims to create 1.5 million jobs that will each provide 100 days of work while ensuring minimum wages (Krishnamurty, 2011).

The 2008 crisis in Ethiopia, precipitated by drought, food shortages and high food prices, provided a testing ground for the Productive Safety Net Programme, which became a major part of the government’s response in rural areas. Using the programme’s contingency budget of US$40 million, urgent assistance was provided to almost 1.5 million individuals who had not previously participated in the programme (Krishnamurty 2011).

Apart from challenges related to targeting, temporary employment and conditional transfer programmes also struggle with corruption and bureaucracy. However, the potential of these instruments to reduce disaster risks is enormous if they are explicitly linked to strengthening disaster resilience and supported by governance arrangements based on local partnerships and community participation.

6.2.3 Micro-insurance

Government-led social protection schemes increasingly work together with market-based micro- credit and insurance. By providing timely capital following disasters, such instruments can also help protect households from losses and subsequently recover. By pricing risk, insurance-related instruments also raise awareness and may act as an incentive for disaster risk reduction. By buffering losses in a predictable way, insurance can also enable risk-prone households to take on higher-risk and higher-return activities that increase these households’ chances of moving out of poverty (Suarez and Linnerooth-Bayer, 2011).

At the micro level, households and businesses in low- and middle-income countries are gaining access to new index-based insurance instruments that link payouts to a measurable hazard event, for example a particular amount of rain or cyclone strength, thereby reducing transaction costs. These schemes can also reduce the danger of moral hazards (when guaranteed compensation for losses encourages risk-taking behaviour, leading in turn to higher premiums), and adverse selection (when only high-risk households sign up for the insurance, while insurers cannot compensate for their increased overall risk by increasing the price of the premium).

Micro-insurance can support DRM in a variety of ways. One approach is to bundle the insurance with loans to promote investments in risk reduction. In Saint Lucia, for example, a programme offering home improvement loans aimed at reducing risks required owners to join a micro-insurance scheme. Bundling micro-insurance with a loan package can also promote productive investments that help the most vulnerable escape disaster-related poverty traps. In Malawi, farmers taking part in a drought-indexed insurance scheme can access loans for improved seeds, thus increasing agricultural productivity and reducing their vulnerability. If the premiums in such schemes were set to reflect long-term climate forecasts, they would also provide signals for planting crops suited to expected rainfall conditions (Suarez and Linnerooth-Bayer, 2011).

Index-based micro-insurance can also be linked not only to observed hazard events, but also to forecasts, providing timely funds for risk reduction activities before disasters occur. The Ethiopia Disaster Insurance programme, piloted in 2006, is now developing an Early Livelihood Protection Facility based on a sequential combination of contingency funds for very mild droughts, contingent debit and credit for mild droughts, and insurance for severe droughts (see Chapter 5). Interestingly, the target group for this new scheme comprises transiently foodinsecure households, defined as food secure yet subject to acute but temporary food shortages. It was estimated that 4.5 million people would be at risk of transient food insecurity during another drought in Ethiopia, and based on this, the total cost of the facility was estimated at US$113 million in a severe drought year (ERD-EUI, 2010). Finally, micro-insurance can be adapted to the specific needs of risk-prone communities. For example, the HARITA pilot project in Ethiopia allows cash-constrained farmers to pay the micro-insurance premium with disaster risk reduction-oriented labour.

Although these developments are promising, micro-insurance currently reaches only a very small fraction of risk-prone households, and reviews of micro-insurance pilot initiatives have highlighted substantial obstacles to scaling up these systems. Therefore, micro-insurance can complement, but not substitute for, other social protection measures. There are also other important mechanisms by which low-income households increase their capacity to cope with stresses or shocks. In many nations in Africa and Asia, community-based savings groups formed mostly by women living in informal settlements have particular importance, and in some countries, federations of such savings groups have developed city or national funds on which they can draw (Mitlin, 2008).