Social Cohesion

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Definition

The OECD [1] defines social cohesion as follows: A cohesive society works towards the well-being of all its members, fights exclusion and marginalisation, creates a sense of belonging, promotes trust, and offers its members the opportunity of upward mobility. While the notion of ‘social cohesion’ is often used with different meanings, its constituent elements include concerns about social inclusion, social capital and social mobility. Some of these elements can be quantified, and some countries have taken steps to develop suitable metrics in this field, e.g. through specific surveys assessing different aspects of people’s social connections and civic engagement.

WDR’s framework [2] on social cohesion emphasises the way societies and groups manage possible collective action problems arising from economic and social transformations in and around national labor markets.

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Source: OECD (2011), Perspectives on Global Development 2012: Social Cohesion in a Shifting World,OECD Publishing, http://dx.doi.org/10.1787/persp_glob_dev-2012-en

Background

Over the past ten years, many developing countries achieved strong growth rates and increased economic prosperity, laying the foundations of a better life for their citizens. And yet, economic and social transformations during a period of fast growth bring new challenges for governments, including rising income inequalities [3] structural transformation, and the need to meet citizens’ rising expectations of standards of living and access to opportunity. As an emerging middle class increasingly compares itself with peers in advanced economies, its patterns of consumption and demands for quality services can be expected to change. Even in developed countries, whose ‘growth record’ is less satisfactory, there are strong sentiments of a disconnect between the concerns of ordinary citizens and those of political elites. The Arab spring; conflicts about wage increases in Asia; disputes about access of quality education in Canada and the United States; fears of a disruption in welfare programmes throughout Europe – all these episodes are evidence of a disconnect that threatens countries’ social cohesion, weakening people’s sense of belonging, inclusiveness and opportunities for social mobility. Governments should not ignore the toils of these emerging middle classes nor underestimate their capacity to mobilise people and exert pressure for more open and transparent governments or for an increase in standards of service provision.

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Source: OECD (2011), Perspectives on Global Development 2012: Social Cohesion in a Shifting World,OECD Publishing, http://dx.doi.org/10.1787/persp_glob_dev-2012-en

 

A Critical Policy Objective

Governments which ignore questions of social cohesion risk having to face social instability and undertake ineffective policy interventions. It is clearly not sufficient to apply technocratically good policy frameworks while disregarding people’s desire for inclusive political processes.

There are different areas of public policies that are key to social cohesion.

  • Fiscal policy

Greater fiscal space opens a window of opportunity for development and stronger social cohesion in developing countries. For opportunities to materialise, however, fiscal policy reforms are needed. Available windfall gains and resources produced by shifting wealth are a boon to finance social programmes.

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Source: OECD (2011), Perspectives on Global Development 2012: Social Cohesion in a Shifting World,OECD Publishing, http://dx.doi.org/10.1787/persp_glob_dev-2012-en

 

Fiscal policies are not in themselves sufficient, however: programmes should be affordable and sustainable. A critical issue in this regard is to ensure the long-term financial sustainability of social programmes, an elusive objective in the widespread context of volatile revenues dependent on fluctuating commodity prices and the prospective depletion of non-renewable natural resources.

Another important challenge to sustainable fiscal policy is that of social trust [4]. Low levels of trust – regarding how taxes are raised and how revenue is spent – often undermine reform that considers taxes in isolation from complementary expenditure and institutional reforms. This can translate into lower revenues and fiscal policies which are generally less effective at addressing inequalities and creating opportunities for upward social mobility. In addition, even where formal democratic institutions do exist, fiscal policy tends to reflect the interests of elites and powerful lobbies if large swathes of the population are excluded from the political process or have limited access to collective instruments for influencing policies. In this respect, tax administration reform is another powerful way of increasing fairness, transparency and tax morale in developing countries.

  • Employment and social protection

Social cohesion calls for the establishment of labour market institutions that can facilitate the wage-setting, distributional and allocative roles of labour markets. Reforms setting out guarantees for workers and collective bargaining systems can begin to establish institutions that will assist markets in adjusting prices to the new labour market regime more smoothly, while ensuring that wages reflect productivity increases. In the short run, more traditional instruments of labour market regulation, and in particular minimum wagesare a useful tool against working poverty even when compliance is limited. Indeed, minimum wage increases also spill over into the informal sector, raising wages throughout the economy. But they are not targeted instruments and tend to have wide-ranging side-effects: large increases in minimum wages can be costly or cause negative employment effects when misused. Moreover, the effects of minimum wage changes are unequal across workers, depending on the degree of enforcement and labour market segmentation. Active use of minimum wages to increase incomes should therefore not be a substitute for effective social policy and for ensuring that labour market institutions fulfil their price-setting role efficiently.

Labour market institutions and social protection systems should be judged not only in terms of their efficiency, but also their ability to prevent or mitigate duality and segmentation. Recent innovations in social protection (the expansion of conditional cash transfers [5] or not, social pensions, and new forms of health coverage) have helped to reduce coverage gaps in social protection. However, they can often lead to dual systems where the poorest are covered by social assistance and the wealthy by either contribution-based or private alternatives. This leaves a significant gap, a “missing middle” of coverage amongst a large segment of informal middle-income workers. Institutions will need to devolve to better reflect labour markets’ realities if they are to produce fair outcomes with minimal strife. Universal ntitlements de-link social protection from job status and offer the best prospects in terms of coverage levels and incentive structures for labour markets.

Universal access to basic social services may not be achievable in the short to medium term, but governments still have a number of more affordable tools at their disposal. Extending social services via targeted cash transfers for example can be comparatively affordable; programmes in Brazil, Indonesia and Mexico have attained coverage of up to one-third of the population whilst costing less than 1% of GDP. Contribution-based systems can be unbundled and opened up to uncovered workers, as is the case of unemployment insurance savings accounts in Latin America.

Fostering social cohesion via social services and other programmes is contingent on the availability of adequate resources and also on improving the efficiency of public spending. The idea that governments cannot afford measures to strengthen social protection needs to be contrasted with the fact that governments often provide large subsidies or payments which benefit the non-poor. For instance, instruments such as fuel and food subsidies can be extremely expensive and distortionary. This is particularly the case with fuel subsidies which tend to be highly regressive.

  • Education

Education is a vital part of any social cohesion agenda as educational outcomes affect all three dimensions of the social cohesion triangle. When opportunities for quality education are afforded across the population, schooling becomes a strong leveller of opportunities, bringing prospects for upward mobility even to disadvantaged groups. Increasing educational attainment is an important way for converging countries to reduce inequality in market incomes in the long run, particularly as returns to education have changed as a consequence of shifting wealth.

Beyond enrolment, the quality of education [6] needs to receive attention so that increases in educational outcomes effectively translate into greater productivity, better growth prospects and improved chances in the labour market. Non-school inputs, such as early-life nutrition and pre-school programmes play a key role as well: more than 200 million children are estimated to fall short of their development potential due to stunting as well as iron and iodine deficiencies. Equally, instruments that reduce opportunity costs of continued education can improve attainment levels. Lowering the cost of schooling is an important first step in encouraging secondary completion and higher education enrolment. Conditional cash transfers and Food for Education initiatives are known to be efficient tools for increasing school attainment. Efforts to close the gender gap in education are particularly important because, on top of the imperative of equal access to education for boys and girls, it can help break the inter-generational transmission of poverty. Indeed, maternal education has positive effects on children’s health and future prospects. Gender-sensitive school policies and facilities do foster social integration.

The schooling experience itself also impacts social cohesion, as it shapes and transmits common values that underpin social capital and inclusion. How children are schooled is important for building their sense of belonging to a society. Schooling should be organised to increase the participation of children from disadvantaged groups, thus making education more inclusive. Greater inclusiveness can also result from the development of teaching techniques and curricula that foster diversity and enhance positive perceptions of others within the system and society. This applies particularly to the better integration of minorities in education. Countries where inclusion at school is greater are generally also those where trust between different groups in society is stronger. Moreover, inclusive schooling systems tend to perform better in terms of learning outcomes than segmented ones.

  • Gender

Despite high growth in the last 20 years, many countries have not made any real headway in improving gender equality. Cultural dynamics and the fact that social institutions lie at the root of existing power relations make challenging discriminatory social institutions a daunting task. Providing incentive for change is therefore crucial. Change should be initiated in the areas of employment, education and entrepreneurship through, for example, increasing women’s access to credit and technology and providing conditional cash transfers specifically targeted at transforming discriminatory social institutions such as forced and early marriage. A critical starting point for addressing institutional bottlenecks in the area of gender equality is to enhance women’s productive activities by guaranteeing them property and inheritance rights. Limited access to resources reduces the ability of women and girls to generate a sustainable income, and can lead them to take up more poorly paid or insecure employment. Furthermore, the lack of access to and control over land can have a negative impact on the food security of the household, increase women’s vulnerability to poverty or violence, prevent them from accessing bank loans or financial services, and reduce their decision-making power.

  • Migration

Although they do face the same challenges as native populations, immigrants are also often deprived of access to decent public services. While limited resources in new immigrant destination countries cause concern over the development of specific measures against the social exclusion of immigrants, the history of integration in OECD countries seems to suggest that the earlier countries address this issue, the more successful policy interventions will be. Migration-related social cohesion must go beyond anti-discrimination measures. A smooth integration process should, in particular, include a comprehensive set of social, employment, education and housing measures. Efforts also need to be made to improve native-born citizens’ perceptions of immigrants. Policies should prevent and reverse the social exclusion of immigrants, which is still the biggest single barrier to full integration; foster positive bonding between immigrants and local people; and, finally, promote social mobility for immigrants by improving labour market mobility, facilitating entrepreneurship, better skills matching, and encouraging education.

Designing and Implementing Social Cohesion Policies

  • Civic participation

Giving space to dissenting voices is fundamental to the creation of a sustainable, socially cohesive society. The harnessing of civic participation and political feedback mechanisms is essential if growth processes are not to be derailed. This is particularly true in the context of shifting wealth, where faster economic growth and more social dislocation require innovative responses. The process of policy making is as important as the policies themselves for building social cohesion. Social cohesion will be enhanced by an inclusive, co-ordinated policy-making process.

Inclusive policy making brings in the views of all stakeholders – from those who will be implementing the policies to the final beneficiaries. The policies which result from such a process benefit from having greater legitimacy and support, factors which ultimately determine their effectiveness.Implementing a social cohesion policy agenda requires effective administration and co-ordinated action across multiple policy domains. Strong institutions and a quality public service underpin successful public action. Besides, the involvement of multiple actors across different levels of government requires negotiated roles to ensure accountability.

  • Better data, better assessments, better policies

Policy making also needs to be more evidence-based. Economic and social policies to foster social cohesion in practice require a framework for ex ante and ex post assessments of their impact: Do they lead to more or less social exclusion? Do they foster trust and civic participation? Do they help to improve social mobility? The monitoring and evaluating of social cohesion policies which can answer these questions requires new data. As advocated in the SenStiglitz-Fitoussi commission’s report in 2009, progress measurement should embrace indicators beyond GDP growth to capture other dimensions of well-being. Absolute and objective measures of progress should be complemented with relative and subjective measures for more effective assessment. Efforts to collect data in order to calculate such measures currently focus on developed countries and are mostly carried out by private organisations. Comparability, availability and quality of data could be improved if national statistical offices (also) gathered them. However, the potential of the data can be fully exploited only if i) there are international standards for data collection; ii) statistical capacity building is facilitated in countries where it is needed; and iii) data is made public as much as is possible. The work of PARIS21 [7] is particularly relevant in this respect.

References

  1. Jump up OECD (2011), Perspectives on Global Development 2012: Social Cohesion in a Shifting World,OECD Publishing, http://dx.doi.org/10.1787/persp_glob_dev-2012-en
  2. Jump up Jobs, Wellbeing, and Social Cohesion, Evidence from Value and Perception Surveys, Frank-Borge Wietzke, Catriona McLeod, Policy Research Working Paper 6447, World Bank
  3. Jump up http://www.oecd.org/els/soc/growing-risk-of-inequality-and-poverty-as-crisis-hits-the-poor-hardest-says-oecd.htm
  4. Jump up http://en.wikipedia.org/wiki/Trust_(social_sciences)
  5. Jump up http://en.wikipedia.org/wiki/Conditional_Cash_Transfer
  6. Jump up http://www.wikiprogress.org/index.php/Post-2015_Education_and_PISA
  7. Jump up http://paris21.org/

 

Further Reading

http://www.oecd.org/site/devpgd2012/49067839.pdf
http://www.oecd-ilibrary.org/docserver/download/8111081ec011.pdf?expires=1375113647&id=id&accname=guest&checksum=D128F9A20FD38B164CD71B12B6BC83A1
http://www.wikiprogress.org/index.php/OECD_Launches_Report_on_Social_Cohesion_%E2%80%93_What_Next%3F