Able to talk, namely via web-services, with other procedures, in order to reduce informal economics
CONTEXTUALIZING SOCIAL ASSISTANCE
Social Assistance: History and Mindsets
For centuries, family cohesion was in charge of inter-generational and social assistance. With a larger scope than families, mutualist initiatives, like Italian “Monti di Pietà”, Spanish “Arcas de Misericordia” and Portuguese “Misericórdias” emerged in the late middle age as financial organizations with charity purposes. The Industrial revolution dramatically exacerbated social care needs. However, as described in Charles Dickens’s Oliver Twist, dominant thinking was directed not to provide relief but, on the opposite, to maximize and benefit from “the poor’s utility”.
As remembered by a recent World Bank’s Report, “The Poor Laws of 1601 and 1834″ established harsh criteria for accessing social assistance. The laws also influenced thinking about social assistance for centuries. In the United Kingdom, it was only 70 years ago that the Beveridge Report, with its recommendations embedded in the 1948 National Assistance Act, marked the end of the era evoked by Dickens.”
During the 19th-century, mutual consciousness was clearly developed. Many of the former initiatives were transformed into neutral institutions regarding religion, which was in their origin. In Italy, “Montepios” succeeded “Monti di Pietà”. In England, “friendly societies” with a similar mutualist profile, contributed to overturning the workhouse system imposed by the New Poor Law of 1834.
The Improbable Birth of Modern Social Insurance
In 1889, led by Otto von Bismarck, Germany became the first country in the world to adopt a nationwide old-age social insurance program: “those who are disabled from work by age and invalidity have a well-grounded claim to care from the state.” Workers and voters’ satisfaction, economic global efficiency and protection against radical socialist ideas were the goals. While in England the mindset about social assistance was influenced by the Poor Laws, Germany built a comprehensive system of income security, based on social insurance principles, including:
- retirement benefits (1889),
- disability benefits (1889),
- workers’ compensation program (since 1884),
- sickness insurance (since 1883),
- and unemployment insurance (later added in 1927).
In 1934, Old Age Benefits were already in place in 27 countries. Trends in social assistance attest to significant global progress in the last decades. According to the World Bank’s database on social protection ASPIRE indicators, social assistance has largely spread to emerging and developing countries.
The OECD defines expenditure in Active Labour Market Policies (ALMPs) as all expenditure aimed at improving the beneficiaries’ prospect of finding gainful employment. This includes spending in (i) public employment services and administration; (ii) training; (iii) employment incentives; (iv) sheltered and supported employment; (v) direct job creation; and (vi) start-up incentives. Spending in Passive Labour Market Policies (PLMPs), on the other hand, consists of spending in (i) unemployment insurance; (ii) unemployment assistance; and (iii) programs for early retirement.
ISSUES AND CHALLENGES
As the World Bank’s Report “The Changing Nature of Work” (2019) stands: “The Bismarckian model has served many countries well. However, in a range of developing countries, the model has remained mostly aspirational because of the large size of their informal economies. As a result, many workers lack social protection.” Contributions to reduce the informal part of a country’s economy are, therefore, a priority.
Software supporting Social Assistance and Pension Management can employ several processes to reduce informality. In many countries, government supplies are not allowed for those companies that do not have a regular Social Security situation. Passports may not be issued for non-contributors. The same for access to social housing or for access to mobile payments. Efficacy of these processes must be tested and countries with large informal economies must be prepared to spend some years until seeing better results. From the technological point of view, these improvements mean interconnection, in real-time via web-services, with many other services and processes.
One of the core attributes of Social Policies is that they are always changing. Economic, political, social and technological issues related to Social Insurance are dynamic. The quest for better and better plans, for more efficient processes, or for long-term sustainability is an endless work. Different combinations of active and passive policies, different portfolios of benefits, different rules require flexibility, from country to country and from one moment to another one. At the same time, these are financial flows that go on for several decades. Historic data and rules changes must be kept for eighty or one hundred years. Traceability, consistency, self-explanation, comprehensiveness must be core qualities to support dynamic policies.
Transparency Demanding Contributors
Today, Citizenship means transparency and access to data from everywhere. Contributors demand to access the data records about themselves, to follow the application of collected funds, to forecast and simulate their future benefits, to quickly have access to payments, to easily regularize their duties. Employers require guarantees of Social Security effectiveness, covering all the companies. Thus not distorting competition.
CASE STUDIES IN SOCIAL MANAGEMENT
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