Financing Social Protection in Protracted Crises

Abstract

This research examines the challenges and prospects of financing social protection in protracted crisis countries (PCCs), where political instability and complex emergencies intersect with under-resourced systems. Recognising the importance of domestic financing, the research focuses on the role of international public funding to support national systems and to contribute to filling the significant social protection financing gap. Although official development finance (ODF) for social protection in PCCs has increased significantly in recent years, global aid volatility, including recent bilateral donors’ aid cuts, signals future uncertainty. Mobilising sufficient financing is imperative, but the quality as well as the quantity of ODF for countries experiencing protracted crises is also critical. To date, in an overly complicated aid architecture, financing has tended to be fragmented, and insufficiently agile in the face of shocks and political dynamics. The growing reliance on high-interest loans for social protection in middle-income countries also raises debt concerns. Drawing on financial data analysis and sector-wide learning, this Working Paper identifies proposals, principles and good practice for mobilising, coordinating and calibrating better financing for social protection in these challenging contexts. It calls for national financing plans to underpin contextually evidenced choices on how best to channel and sustain international humanitarian and development contributions under pressure.

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