Those formulating and implementing social protection programs for informal sector workers in developing countries often face administrative and fiscal capacity constraints, as well as human and technical resources limitations. For example, an assessment by the International Labour Organization found Indonesia’s social protection system ill-equipped to provide for informal sector workers. Much of this related to difficulties with the registration, compliance, and payment processes that resulted from the undocumented nature of informal sector employment. In addition, the fact that informal sector workers were unaware that they may be eligible for the program or its compliance requirements further constrained program participation rates (Satriana and Schmitt 2012).
Despite limited capacity for administration and evaluation, it is still possible to design and implement effective social protection programs that target informal sector workers. However, this depends on three conditions being fulfilled: (i) monitoring and evaluating processes must be appropriate; (ii) the design and implementation of social protection programs must take account of existing administrative, fiscal, and resource constraints; and (iii) assistance from outside sources must be sought.
First, program monitoring and evaluation procedures must allow feedback from ongoing programs to inform the design and implementation of new programs or expansion of existing initiatives. In short, the monitoring and evaluation procedures employed must, over time, allow delivery mechanisms to be improved, the results of ongoing programs to be documented, the efficacy of alternative approaches to program processes to inform both ongoing and future programs, and the capacity and financing requirements of social protection interventions to be identified.
In addition to improving program outcomes, effective monitoring and evaluation also provides policy makers with the information necessary to secure the requisite resources for sustaining and expanding social protection programs and for civil society organizations to demand transparency in social protection policy and the initiatives funded (OECD 2009). In short, effective monitoring and evaluation systems are essential for ensuring long-term sustainability of social protection programs.
Second, program design and implementation must acknowledge existing capacity constraints. In fact, it is possible to design and implement effective social protection programs that place few demands on existing administrative and fiscal capacity and recognize limitations on the availability of human and technical resources. Building an effective social protection system should initially focus on implementing such programs. Then, as administrative capacity strengthens and initial program successes and weaknesses inform the design and implementation of new programs and expansion of existing initiatives, more comprehensive programs that require additional resources and more sophisticated administrative capacity can be undertaken.
Basic social protection programs with limited administrative requirements can be easily implemented, even under decentralized systems. Examples include basic targeted or universal social transfer programs, provision of basic services that uses preexisting delivery channels, and simply defined insurance mechanisms.
Similarly, monitoring and evaluation systems—including their component MISs—can be simple as program implementation begins, and then expand progressively with evolving program requirements. Ideally, a single registry MIS would coordinate key administrative functions (i.e., targeting, registration, and enrollment), payments, and monitoring and evaluation of one or more social protection programs. As program implementation progresses and political will for social protection measures grows, a larger-scale social protection system can evolve.
Viet Nam’s social pension program illustrates how a social protection initiative implemented under significant financial constraints can grow in sophistication and complexity over time. Upon its inception in 2000, the pension was only offered to individuals aged 90 years or over who were unable to access contributory pensions or other social allowances. Over time, eligibility requirements were progressively relaxed, and the size of the benefit expanded, thus increasing the program’s scope and coverage. As a result, two forms of social pension are now offered: a pension for older persons who live in poor households, either alone or with an ill, older spouse and who have no other form of financial support, and a pension provided to persons aged 80 years or over who receive no other retirement or social allowance benefits (Table 1.15). The multitiered nature of this program curtails the cost to the government of noncontributory pensions, while providing benefits commensurate with the level of vulnerability of the individuals it serves (Long and Wesumperuma 2013). Third, support from development agencies and NGOs can often accelerate development of social protection systems when the capacity for establishing, monitoring, and evaluating social protection programs is limited. This is
particularly true with regard to building administrative capacity or scaling up more limited initiatives. In fact, designing and implementing national-level social protection programs and systems is an area in which numerous development agencies have significant comparative advantage.
In seeking such assistance, a shift away from donor-specific financing and delivery mechanisms toward funding national programs through joint financing instruments should be emphasized (OECD 2009). Such support allows leveraging of international experience in formulating social protection systems as well as funding that can catalyze program development. However, care should be taken in managing donor support in a way that prevents implementation of programs not tailored to the receiving country’s particular social, political, and economic context, as such an outcome could potentially diminish the positive impact of the social protection program concerned.