Social policy refers to collective interventions directly affecting transformation in social welfare, social institutions and social relations. In developing countries, social policy has become increasingly pertinent due to the increasing provision of social services by transnational actors including aid donors, non-governmental organisations and transnational corporations. In this changing environment, the role of the state is to provide ‘an enabling environment’ for the private provision of social services, whilst reducing its own expenditure and activities in the social sector.
A number of factors have contributed to a revival of interest in social policy in the context of development:
- The rediscovery of poverty in national and international policy discourse. For instance, the IMF and World Bank’s Poverty Reduction Strategy Papers emphasise the importance of effective social policies.
- At a micro level, there is a realisation that labour is a socially constructed capacity or potential resulting from deliberate investment in human capital or institutional arrangements, which determines the participation of individuals from different social groups in labour markets.
- At a macro level, there is a revival of interest in growth economics and the emergence of so-called ‘new growth theories,’ which recognise that social development is instrumental for economic development.
- A renewed interest in social security as a means of creating social cohesion and stability due to the greater economic volatility of economies in the context of globalisation and the increasing vulnerability of ever-larger groups of people.
- The historical lessons of the role of social policy in the ‘late industrialisers’. Social policy served not only to ensure national cohesion, but also to produce the social pacts and human capital that facilitated industrialisation.
Despite increasing recognition that social policy can work in tandem with economic policy and lead to socio-economic progress, there are a number of impediments to the practical application of these new insights. A key difficulty is the continued assumption that macroeconomic policy should be determined first and that social policy should be left to address the social consequences afterwards. There is a clear need to remedy the ‘missing policy link’ by:
- Recognising that social policies are the outcomes of political bargains and conflicts, therefore, the study of social policies in developmental contexts must be sensitive to the political contexts within which they are formulated and implemented.
- Undertaking conflict-sensitive research on the links between macroeconomic performance and the fundamental goal of raising human welfare.
- Bridging the hiatus between theoretical and empirical findings and social policy-making, and between means and ends.
- Ensuring that the use of social policy as an instrument to enhance social capacities for economic development does not run the risk of sacrificing fundamental objectives – such as social justice and social integration – to economic goals. This can be achieved through careful policy design and greater dialogue on values, ideas and ideology.
