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What about the formal workers? Informality in formal employment and social protection gaps in developing countries during the COVID-19 pandemic
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The Covid-19 pandemic has prompted manifold social policy responses all around the world. This article presents the findings of a meta-analysis of thirty-six in-depth country reports on early Covid-19 social policy responses in the Global South. The analysis shows that social policy responses during the early phase of the pandemic have been predominantly focused on expanding temporary and targeted benefits. In terms of policy areas, next to labour market and social assistance measures, the focus has also been on unconventional social policy instruments. The social policy responses of developing economies were often rudimentary, focusing on cash transfers and food relief, and heavily relied on external funding. In contrast, many emerging economies introduced a much broader array of social policies and were less reliant on external support.
Latin American governments swiftly implemented income assistance programs to sustain families’ livelihoods during COVID-19 stay-at-home orders. This paper analyzes the potential coverage and generosity of these measures and assesses the suitability of current safety nets to deal with unexpected negative income shocks in 10 Latin American countries. The expansion of pre-existing programs (most notably conditional cash transfers and non-contributory pensions) during the COVID-19 crisis was generally insufficient to compensate for the inability to work among the poorest segments of the population. When COVID-19 ad hoc programs are analyzed, the coverage and replacement rates of regular labor income among households in the first quintile of the country’s labor income distribution increase substantially. Yet, these programs present substantial coverage challenges among families composed of fundamentally informal workers who are non-poor, but are at a high risk of poverty. These results highlight the limitations of the fragmented nature of social protection systems in the region.
Mexico and Brazil, both among the region’s hardest hit by COVID-19, took strikingly different steps to mitigate the economic impact of the pandemic. Although President Jair Bolsonaro dismissed the need for social distancing measures, the government provided substantial financial aid to citizens though cash transfer programs, avoiding potentially sharp increases in poverty and inequality. Mexican President Andrés Manuel López Obrador, who also displayed a dismissive attitude about the virus, made relatively little effort to protect the poor and unemployed from its effects, despite his pro-poor rhetoric. As a result, the Mexican economy was projected to contract by 9 percent in 2020, while poverty sharply increased. Rising malnutrition and missed schooling may have long-term consequences for inequality.
Nations in the Middle East and North Africa have traditionally seen the primary function of social policy as serving the goal of economic growth. But the COVID-19 pandemic has demonstrated the need for a more balanced approach to make societies more resilient, with social protection policies that provide citizens with basic security throughout their lives. Beyond cash transfer programs and other emergency measures, governments should recognize the need for universal provision of health care and other essential assistance. Otherwise they risk leaving the Arab Spring’s popular demands for dignity unheeded.
This paper focuses on the ‘hybridity’ of solo self-employment by shedding light on the lived experiences and meanings of the subjects within their institutional and socio-economic contexts. It offers an original perspective to the study of the hybridisation of work by linking between subjective and objective conditions underpinning solo self-employed workers. We found that solo-self employed workers exercise agency over their working lives when facing high levels of insecurity, and that their contextualised experiences are related to the dominant narratives about self-employment. At the same time, however, we also point out that solo self-employed are engaged in (re)-constructing their alternative and dissonant narratives as well.
This study explores labour relations in Turkey under the rule of the Justice and Development Party (JDP) in the first ten years of the twenty-first century. Labour policies followed by the JDP, which is conservative in terms of socio-cultural policy and liberal in terms of economic policy, bring to unionization a government stance that may be defined as authoritarian flexibilization, that is, flexibility in labour policies in the government’s favour, but at the expense of the worker. The JDP has deepened the neoliberal heritage and experience of the period after the 1980s by appropriating them for its own anti-labour purposes. The JDP’s effort to institutionalize flexibility in terms of both labour legislation and actual labour relations has actually resulted in an adversial attitude toward unionisation. The party has accomplished this goal by merging its conservative roots with its neoliberal tendency. As a result, unionisation has significantly decreased under JDP rule. In this study, the roots and basic characteristics of labour policies in the period of the JDP are discussed, based upon an examination of individual and collective labour relations.
South Korea's (hereinafter Korea) labour relations illuminate the possibilities for the ‘hybridisation’ of non-liberal capitalism under globalisation. Unlike the well-known German and Japanese advanced non-liberal capitalisms, Korea appeared to be far less conducive to ‘hybridisation’. First, inclusive labour practices were not well developed. Second, it had introduced comprehensive economic liberalisation following the financial crash of 1998. Despite these unfavourable conditions, leading Korean firms have tended to maintain or even introduce non-liberal practices than to discard them. The resulting melding of non-liberal and liberal practices (‘hybridisation’) can be traced to three legacies of late-industrialisation: state inclination to intervene during crises; countervailing power of labour at leading enterprises; and the intensity of big business rivalry as a force for the assimilation of inclusive practices. The effects of these legacies in generating mixed practices will be illustrated using firm-level case studies from Korea's two leading export sectors. It will also be argued that Korea's pattern of labour relations hybridity is not conducive to convergence with extant forms of advanced capitalism. Hence Korea is more suitably denoted as a form of late-industrialisation hybrid capitalism whose experience is relevant to other late-developers as they achieve ‘advanced’ status.
Macro events like the Great Depression in the 1930s and the Second World War have triggered new departures in social policy. What about the COVID-19 pandemic and the attendant socio-economic crisis? This article analyses the social protection measures taken by governments in the global South in response to the crisis, the social protection concepts developed by international organisations, and the overall strategies of the organisations in view of future shocks. The finding is that while the measures taken by governments expectedly have just been stopgap measures of a transitory nature, international organisations are aspiring to future-oriented policies and present a range of concepts for the time after the crisis. However, these are old concepts from pre-COVID-19 times, and the main strategy is to expand rather than reform the old models, even though the international organisations themselves identify new forms of poverty and structural inequalities. Moreover, the organisations do not provide conclusive evidence of their strategy’s viability; the strategy rather reflects a belief in social progress. All in all, the crisis has hardly been used as a window of opportunity for generating new ideas of social protection. Rather, the crisis has revealed the flimsy nature of widespread thinking about building social protection in the global South. Conceptually, the article draws on world society theory, conceiving of the pandemic as a global macro event.
This article presents a Centenary Issue on Informality to mark the 100th anniversary of the International Labour Review (ILR). The issue brings together ten articles published in the ILR between 1975 and 2016 that are devoted exclusively to the analysis of informality. This introduction begins with an analytical framework, considers the origins of the informality discourse and then discusses the articles in this Centenary Issue, locating them in the broader literature through illustrative rather than comprehensive referencing. It concludes by looking ahead to what the coming decades of analysis and policy discourse may bring.
Most African countries implemented measures to contain the spread of COVID-19 during 2020, such as restrictions on business activity and travel, school closures and stay-at-home lockdowns for several months. These restrictive policies had adverse economic and social consequences that triggered a follow-up wave of expansionist public interventions intended to mitigate these effects. ‘Shock-responsive’ social protection measures included increased benefits to existing beneficiaries (vertical expansion) and registration of new beneficiaries on existing programmes (horizontal expansion). These approaches had the advantages of being quick and administratively simple, but the disadvantage of bypassing people who were made most vulnerable by COVID-19, notably retrenched and informal workers with no access to social insurance. On the other hand, setting up new humanitarian relief or temporary social assistance programmes was slow and susceptible to targeting errors and corruption. COVID-19 also prompted a reassessment of the social contract regarding social protection, with some governments recognising that they need to become better coordinated, more inclusive and rights-based.
Political economy research commonly expects a positive relationship between income inequality and the demand for redistribution, which is increasingly attributed to inequality aversion grounded in norms and values. However, people are not averse to a proportion of inequality that fairly results from differences in individual merit. Therefore, this study argues that the effect of inequality crucially depends on the extent to which income fairness is realized. It is primarily unfair inequality, rather than overall inequality, that affects individual redistribution support. The argument is substantiated with an empirical quantification of unfair inequality that measures whether individuals have unequal returns to their labor-related merits. Multilevel models using repeated cross-sections show that this quantification of unfair inequality can explain both within- and between-country variance in redistribution preferences and that it is a better predictor than overall inequality. The results suggest that public opinion cannot be inferred directly from the overall level of inequality.
The public health response to COVID-19 in many countries has involved strict restrictions on movement and economic activity which threaten the livelihoods of economically vulnerable households. In response, governments are adopting emergency economic measures to provide households with some safety net. We provide an overview of the policies that could form a comprehensive social protection strategy in low-income and middle-income countries, with examples of specific policies that have been adopted. Our core argument is that these countries can cast an emergency safety net with extensive coverage if they use a broader patchwork of solutions than higher-income countries. These strategies could include expanding their social insurance system, building on existing social assistance programmes, and involving local governments and non-state institutions to identify and assist vulnerable groups who are otherwise harder to reach.
The COVID‐19 pandemic has exposed the vulnerability of those who are inadequately covered by social protection in more and less developed countries alike, and has exacerbated the fragility of a social contract that was already under strain in many countries. A weak social contract in the context of an exceptional crisis poses a very real risk to social cohesion. Nevertheless, many States have reasserted themselves as the guarantor of rights by protecting public health and incomes. By sustaining these measures, economic recovery will be supported which will help minimize risks that may weaken social cohesion. However, this is a fast‐moving, inherently unstable and protracted crisis. Social protection stands at a critical juncture. Decisive policy action will be required to strengthen social protection systems, including floors, as one of the cornerstones of a reinvigorated social contract.
Drawing on theoretical accounts of institutional change, this study explored the politics of welfare regime transformation in regard to Turkey's unemployment compensation system. By using the institutionalist approach, the study shows that the process of welfare regime change was one of “institutional layering” of unemployment insurance (UI) over severance pay. Also, the study demonstrates that the economic bureaucracy played a key role in pushing the establishment of UI (state‐centric approach) in contrast to the class‐based organizations that focused their struggles on the severance pay scheme (power‐resource perspective). However, the economic bureaucracy preferred a rudimentary UI design, which prevented UI from undermining the vested interests behind the severance pay scheme. Furthermore, subsequent attempts at the reformation of the severance pay scheme were not successful because the social welfare bureaucracy lacked the capacity to develop a policy alternative to resolve the stalemate between the societal actors. Lastly, the study used the successful severance pay reform experiences of South Korea and Austria to locate the Turkish case within a broader comparative framework.
Amid all the complicated economic theories about the causes and solutions to poverty, one idea is so basic it seems radical: just give money to the poor. Despite its sceptics, researchers have found again and again that cash transfers given to significant portions of the population transform the lives of recipients. Countries from Mexico to South Africa to Indonesia are giving money directly to the poor and discovering that they use it wisely – to send their children to school, to start a business and to feed their families. Directly challenging an aid industry that thrives on complexity and mystification, with highly paid consultants designing ever more complicated projects, Just Give Money to the Poor offers the elegant southern alternative – bypass governments and NGOs and let the poor decide how to use their money. Stressing that cash transfers are not charity or a safety net, the authors draw an outline of effective practices that work precisely because they are regular, guaranteed and fair. This book, the first to report on this quiet revolution in an accessible way, is essential reading for policymakers, students of international development and anyone yearning for an alternative to traditional poverty-alleviation methods.
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