General welfare systems reduce poverty more effectively than support targeted specifically at those living in poverty. Sweden has great opportunities to share experiences about why and how general systems can be built. Unfortunately, we do not take advantage of that, the report shows "Not just for Swedes - on general welfare as a goal in Sweden's development cooperation" which the Church of Sweden presents today.
A number of countries in Asia, Africa and Latin America are currently building up social security systems in the form of, for example, child allowances and old-age pensions. This is extremely positive, and an important reason why hunger and poverty are declining in a number of countries.
Most of these social programs are specifically targeted at people living in extreme poverty and vulnerability. This may seem reasonable - if you want to improve the situation for those who are worst off, you should contribute to them and no one else. It is also the model advocated by the World Bank.
General welfare redistributes better
However, research and Scandinavian experience show that general welfare models reduce poverty and inequality more effectively than need-tested security systems do. They are more redistributive than targeted systems, contrary to what one might spontaneously believe.
One reason for this, which is crucial from a long-term perspective, is that it is only when the middle class is included and benefits from security systems that a willingness arises to pay the taxes necessary to finance them. As long as only the "poor" benefit from the benefits, the benefit levels remain at a level that alleviates poverty, but not much more.
Difficult to identify the needy
A more immediate reason is that support given to everyone in certain categories - all children, all the elderly and so on - is the only way to reach those who really need the support. No method of identifying the "needy" is perfect, and the narrower the group support, the more people tend to be incorrectly excluded.
With general systems, a number of problems associated with means testing are also avoided: high administrative costs, risk of abuse and corruption, stigmatization of beneficiaries, etc.
Of course in Sweden's domestic policy
In Swedish domestic policy, this is largely a matter of course; there has long been a consensus on the basic features of general welfare. But these insights have not shaped Sweden's development aid policy. It appears in the report by Mats Wingborg that the Church of Sweden presents today. Despite formulations in the PGU bill in 2002 on "a special Swedish commitment" for social security systems that include everyone, there is a complete lack of writing about this in the strategies that have since guided Sweden's development cooperation.
However, there is a potential and a will from many of the actors who have been interviewed for the study.
The issue of general and targeted security systems is not black and white. There is no sharp boundary between general and targeted programs, rather a sliding scale. And general systems must be supplemented with targeted support for those who, for various reasons, end up outside. More knowledge is also needed, for example about how general welfare can be designed in different development contexts, and about how narrowly poverty-oriented programs can be expanded over time.
Sweden should share
Sweden does not have all the answers and should not dictate the conditions or make new demands on developing countries. But Sweden has experience to share. This can be done through dialogues with partner countries, through involvement in the World Bank and by giving Swedish welfare authorities a clearer mandate within the framework of PGU. Sweden's starting point should be to prioritize support for the development of general welfare programs, although of course it is always the partner country's government that decides how the systems are to be designed.
Erik Lysén and Gunnel Axelsson Nycander
This is a debate article. The author is responsible for analysis and opinions in the text.
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