Helping the poor manage risk better : the role of social funds

Abstract

Recent trends in trade, technology, and politics have created new opportunities for global welfare improvement, but have also increased risks. This challenge requires rethinking social protection, and its instruments, particularly social funds. This paper reviews social funds, and suggests future directions by using a"social risk management"framework, to examine how social funds can help the poor manage risk better. Risk management covers risk reduction, risk mitigation, and risk coping. Analyzing social funds within the social risk management framework, suggests that: they should be assessed as one of many components in countries'social risk management strategies; they should move from coping and mitigation, to risk reduction; they should focus more on the medium term impact of projects; their targeting should focus on vulnerability, and vulnerable groups; their"investment menus"should be expanded to include more risk reduction projects; and, more emphasis should be given to participation, and capacity building.Banks&Banking Reform,Social Risk Management,Environmental Economics&Policies,Rural Poverty Reduction,Safety Nets and Transfers