SOCIAL DEVELOPMENT AND SOCIAL POLICY REFORM

Mario Torres

Document (April, 1997) for preparation of Introduction and Conclusion chapters of Transnational Social Policies. The New Development Challenges of Globalization. Edited by Daniel Morales-Gomez. Ottawa: International Development Research Centre. London: Earthscan Publications Ltd http://www.idrc.ca/books/854.html  
                                      

Introduction

Social policy reform has been proposed as a way to obtain social development with more equity, effectiveness and efficiency.  In this context, it is important to respond to some questions: Why to understand social policy reform processes?  What is the meaning of social policy reform in the context of social development? Why is social policy reform important even in the cases of societies with no significant on-going social policies to reform? What are the implications of social policy reform for social and economic development?  This chapter will address some of these questions and discuss the meaning, risks and potentialities of reform processes for developing societies.

In the last years social development has become a priority (1) .  Traditionally, macro-economic policies have been the main concern of governments and international organizations.  However, it has become increasingly evident that macro-economic equilibriums will not render necessarily the expected results of better social welfare and less poverty if social development needs are not addressed through explicit and affirmative actions.  Governments and development agencies are emphasizing now "putting people at the center" as the key policy goal. 

In some cases this emphasis has been accompanied by the implementation of social policy reform.  This is a global trend to change the parameters of the welfare state in its different versions in both the developed and developing societies.  This model shift has been the manifestation of profound social, demographic and political changes during the last decades, particularly in the developing societies.  It has responded also to the persistence of unsatisfied and increasing social needs and expectations, to the frustration of vast population sectors for not getting access to productive work and social opportunities, to the need to better handle the debt crisis and, no doubt, to the political lobbying of development organizations and international financial institutions.  However, the catalyst element appears to have been the economic stabilization and structural adjustment policies in the 70's and 80's, which were implemented to overcome inflation, fiscal deficits, foreign indebtedness, and trade imbalances.

Despite reform processes often have long-term implications, discussions about reform options to reform the social policy framework of the welfare state have been constrained by consideration of funding alternatives.  The volume of ODA will not increase dramatically in the near future. OECD and LDCs governments have given limited commitment to funding social development programs despite the Social Summit declarations and the public rhetoric (2).  The burden of the debt continues to be an important constraint for many developing societies.  These are some of the reasons to justifying claims that earnings, savings and tax revenues of the developing countries themselves should be the main source of investment in their economic and social progress (OECD, 1996).  Participation in the global economy and good business opportunities rather than larger international aid funds appears to be the central recommendation from international organization like OECD for overcoming poverty and underdevelopment.

Thus, the international social policy agenda has been "reformed" and implemented with almost total absence of assessment of expected and unexpected outcomes of the process.  Regions like Latin America are best prepared to face the challenge of policy reform, given historical experiences and the development of state and civil society organizations.  Others, however, where the reform is not possible -because there are no former policies to change- but where the new policy versions are applied, appear to be less prepared to adopt the reform agenda.  The importance of the issue is that policy reform is often proposed as a key strategy to overcome poverty given the scarcity of aid and national development funds and the problems experienced by social policies inspired in the welfare state model.  However, are current approaches to policy reform the most appropriate strategies?  Are there other options for policy change?  In order to examine the significance of these processes a clear understanding of social development is required since reform processes are being proposed as a key instrument to its attainment.

Social Development: Poverty Alleviation or Human Development?

Opening to the market has been implemented as an integral part of the reform approach to change economic policies.  To move in this direction has been facilitated by the technological revolution in communications and information technologies.  Some developing countries have been very active in adopting these reforms due to diverse reasons, including loan conditionality and the search for new market opportunities in the global economy.  In this context, there have been important social advances as indicated by the Human Development Reports.  Large sectors of the population have obtained access to basic social services, mass media, political participation and cultural goods.  However, social problems have also increased in magnitude despite that globally development has advanced.   Poverty has augmented as well as social disintegration, violence, unemployment, and urban crowding.   Reforming social policies is argued to be the most practical response to these problems as part of the problem is assumed to be the inequity and poor effectiveness and efficiency of welfare state inspired policies.

Why a reform approach is proposed?  What is the concept of social development inspiring policy reform as a solution? are questions that need to be examined.  The notion of social development has received different interpretations that go from poverty alleviation and eradication, to human resources development, social integration and capacity development.  In many ways these emphases complement each other.  However, they also imply different entry points for understanding why and how the policy reform approach may be an appropriate strategy, what kind of policy agenda is required in specific cases -as there is large variation of situations across regions and countries- and what the policy reform options are.

In 1991 the World Bank indicated that investing in people provides the firmest foundation for lasting development.  This means better education, higher standards of health and nutrition, less poverty, a cleaner environment, more equality of opportunities, greater individual freedom, and a richer cultural life.  Reaching these ends requires economic development, which depends on productivity and technological progress.  These are in turn influenced positively by investments in human capital and negatively especially by the extent to which markets are distorted (World Bank, 1991).  It is in this context that the Bank argues for the reform of the state and the social and economic policies.  Specifically, according to the Bank there is a need to spend more resources, and more efficiently, in social services, shifting spending priorities, targeting expenditures and increase resource mobilization.  The challenge is not to expand the role of the state but to exploit the complementarities between state and the market (World Bank, 1991:11), particularly between government, non-government and profit oriented private organizations.   In the Bank's view, social development is a pre-requisite and a consequence of economic growth and appropriate state and market institutions.  The reform of social policies is necessary because, as the argument implies, current policy models are inadequate

The Canadian International Development Agency's (CIDA) definition of social development focuses on the concept of human resource development.  Sharing Our Future identified four principles to meet social development: poverty must be put first, people must be helped to help themselves, development priorities must prevail, and partnership must be the key.  The World Bank shared this approach as it recognized that adjustment must be complemented by poverty alleviation, its 'refound' goal (World Bank, 1990).  In 1991, CIDA's four principles were further modified: its new mission statement was to support 'sustainable development' in developing countries.  However, the attention to social development has remained a small part of a much larger pie.  CIDA's bilateral disbursements on basic human needs -basic education, primary health, safe water and sanitation and family planning- in Asia, Africa and the Americas represented 16.4, 12.8 and 9.7 percent respectively of total disbursements.  The total envelop for basic human needs areas is 21 percent of Canadian ODA, which falls short of the 25 percent target announced by Canada in 1995 (Van Rooy, 1995: 21, 26).  In practical and programmatic terms CIDA's approach has an emphasis on poverty alleviation and self-help.

An entry point oriented by technological and economic considerations is promoted by ECLAC in its proposal of productive transformation with equity.  The proposal indicates that development is to increase the level of well-being of the population.  This well-being is the result of multiple factors such as the prevalence of human rights, the democratic character of the political regime, a minimum of equity and social solidarity, and the growth in the availability of material goods and services to all sectors of the population.  The growth in availability of goods and services may come only from economic growth based on competitiveness. 

This is proposal is not new to the LAC region.  The novelty is the interest in reaching competitiveness based in the introduction of technological innovations rather on depressing salaries levels, over-exploiting natural resources or implementing successive devaluations -as these mechanisms have proved to be ineffective.  The rational behind is that to be competitive there is a need to offer more o better products by equal price, or to offer equal product for less, or a combination of both.  In this regard, technological change is a condition sine qua non and the only genuine source to increase productivity.  However, the process of technological change is systemic and requires human resources capable of understanding, learning and adapting change to local conditions.  ECLA's assumption is that this growth strategy based on the introduction of technological change has a "pro-equity" bias since it improves flexibility and competitiveness of the labour force between and within sectors.  ECLA also indicates that equity cannot be left exclusively to the care of the production strategy, but it should be also pursued in a complementary and coherent way by other public policies, including education and other social policies (CELADE, 1996: 18-21).

The OECD approach to social development starts by putting people up front and proposes a social development concept in terms of capacity development at all levels -national, regional, local and individual.  This orientation extends across the spectrum of public sector and civil society organizations.  In the OECD's perspective, this framework reflects not only a major shift in the dominant paradigms of development thinking, but parallels a more general paradigm shift in economic thinking, under the rubric of the "New growth theory".  This new theory places emphasis on human capital and social capital as the capacities of individuals, groups and whole societies to learn, adapt and co-operate.  Social capital refers to a whole web of norms and networks of social engagement.  Social capital is an asset that grows out of the structures of relationships between and among people and their organizations.  While human capital relates to the capacity of an individual to make efficient decisions, social capital relates to the capacity of a collectivity to make competent decisions (OECD, 1996: 21-22).  The broad concept of capacity development embraces human capital, social capital and what is called the "new institutional economics"  (i.e. the study of the economic impact of constitutional rules and norms at the macro-level, and the behaviour and performance of individual institutions at the micro level) (OECD, 1996: 23).  It is obvious that in this conceptualization social development is much more than just poverty alleviation because it involves the idea of capacity development of poor and non-poor people.

Across these definitions of social development given by the World Bank, CIDA, ECLA and OECD is important to underline two issues: (i) the former social policies inspired in the welfare state model appears inappropriate to meet current social needs and (ii) poverty alleviation is only part of the problem since social development is multiple and involves all the society, not just the poor.  It is of major importance for analytical and policy purposes to understand that poverty is a system problem and not only the problem of a particular population.  Poverty exists because wealth is concentrated, productivity is low, learning opportunities are disparate, and access to power is uneven.   Behind each one of these causes there are social structures and the value practices and interests of specific actors and social groups.  Thus, the social development agenda in developing countries should include a wide range of actions across the spectrum of social groups since the challenges to social development require a response in terms of attention to the poor, to those middle sectors now being excluded -the new "poor" (Bradford, 1993)- and the involvement of those who are major actors in the policy making process and the distribution of the benefits of development.

Why is so important the consideration of the society as a whole? Social development is not just overcoming poverty.  Social development is above all human development as embodied in learning and participation capacities by individuals and communities.  In From this perspective, social development is not a concern of the poor only.  It cut across social sectors and it is not reduced to a question of satisfaction of basic needs -shelter, basic education, primary health care or access to a minimum wage.  Social development comprises value practices, the equitable allocation of material resources, and redistribution of opportunities.  Alleviation of extreme poverty is an urgent priority.  But the critical issue is how to proceed at the short term to eradicate poverty while at the same time laying the base for sustainable development in the long term. 

A good example is education.  There is no question about the need to provide basic education but the most critical issue will be to provide education of quality and relevance across the complete educational system, in order to mobilize the entire spectrum of social groups towards higher levels of capacity for understanding, using and creating knowledge.   Education should mean not just the capacity to read or write well but also to receive relevant knowledge and skills to understand and contribute to the process of knowledge generation.  Otherwise, the outcome will be more inequity between and within societies and new and, probably strengthened, dependency links between develop and developing countries as they may become just consumers and users of knowledge and technologies produced elsewhere

This approach to social development centred around the idea of creation of learning and participation capacities is not really new as it is implicit in the proposals for enhancing capacities of developing societies.  However, it raises the point that social development should be re-considered from a systemic and not target oriented terms only.   Particularly, it indicates that social policies should be instruments of a broader strategy to deal with increased inequity of income distribution, unemployment, and low productivity and competitiveness capacity while at the same time being efficient and more effective.  It is in this context that the proposals for policy reform have to be examined. 

The Meaning of Social Policy Reform

Social policy reform may mean simultaneously three things: (i) An advocacy for the change of social policies that were inspired by the welfare state model; (ii) the changes made in the existing social policies, and (iii) an ongoing process of policy making.  In these three meanings, the concept of reform points to changes in the welfare state model principles of universal, central-government, free-access and state-driven provision of education, health and social security services, the classical components of a basic portfolio of social support.  The modalities and significance of the welfare state model has been varied in developed and developing countries.  In the case of LDCs, the model never materialized as in the North.  This despite that in some regions, like in Latin America, there were countries with very advanced welfare state models.  In other cases, like in many African countries, the welfare state model was more a theoretical reference rather than a viable policy option.  However, despite this diversity of situations, policy reform is a concept that has fundamental importance for old and new social policy systems across regions.  The reason is that the new policy approaches introduced by various reform approaches  -targeting, decentralization, fee-for-service and privatization- will have major implications for social development prospects. 

At this point, the difference between the concepts of social policy reform and social reform should be clarified.  Social policies are an instrumental part of social reform, a process that has a broader meaning.  According to the Inter-American Development Bank and UNDP, social reform is defined as the set of policies and specific instruments addressed to incorporate all sectors of the society into the process of growth, in a context of better welfare.   Policies and instruments for a more equitable distribution of the benefits of economic growth, progressive incorporation of excluded sectors and the adjustment of the supply and demand of goods and services to the satisfaction of basic needs for human development should be considered key components of the process of productive transformation and development (BID-PNUD, 1993:17). 

According to the above definition, social reform is more than just to give attention to the poor.  Social reform involves promotion of equity through a system providing opportunities to all.  One challenge is that social reform facilitates taking advantage of opportunities for productive work.  The new system that social reform should create should be intrinsically equitable and not just a system for the transference of resources for alleviation of social problems (Iglesias, 1993).  What should be included in the agenda of the economic and social reform? Quality of life in urban centers, creation of productive employment to overcome poverty and un-equitable income distribution, and the improvement of the quality of the labour force since the quantitative expansion of employment will be insufficient (Emerij, 1993).  In this kind of approach, social policy reform may play a critical role.  However, social reform requires more than just reforming social sector policies.  Even some critics, as it will be indicated later, would argue that social policy reform as currently implemented may not be conducive to social reform. 

Otherwise indicated, reform will refer to social policy reform and not to social reform.  And, as stated before, social policy reform is defined as the global trend to change the parameters of the welfare state in its different versions in both the developed and developing societies through new policy approaches such as targeting, decentralization, fee-for-service and privatization.

An Advocacy

As an advocacy social policy reform is a value oriented proposal for the provision of social services through new modalities of decentralization, privatization, targeting and fee for service.  The argument is that the reliance on market mechanisms for basic needs satisfaction and allocation of resources will permit (I) the attainment of the intrinsic social benefits of competition -it is assumed that the market selects the best, the cheapest or the most convenient-; (ii) the easiest mobilization of available resources existing in profit and non-profit oriented organizations, and (iii) the development of a no-dependent citizen with a capacity for individual decision-making -the assumption is that the market promotes generation of free consumers and avoid clientelism. 

The justification of this line of thinking is based in a number of other value judgements.  Those include that the majority of the population, particularly the poor, should not suffer most of the impact of inflation caused by over-fiscal expending, therefore expensive state bureaucracies should be reduced; the country has to honour its debt payments and avoid alienation from the financial international community and its indispensable resources, therefore social expending must be reduced to a minimum in order to facilitate long term economic and social recovery; the community and the individual has to be responsible for their own welfare, implying that direct participation is necessary; and poverty should not become a way of life as this creates dependent individuals.   

This argument has three empirical assumptions and one conclusion: (a) If the state does not interfere in the allocation and management of resources for social expending, (b) if the state spends its resources effectively and efficiently, and (c) if society's organizations are given an opportunity to act and participate, the result will be that social problems will find a better response than with current solutions.  For example, it is expected that decentralization of educational expending and services will contribute to improving the quality of education since the actors involved in the educational process -providers, users and beneficiaries like the private business sector- will be closer for monitoring and evaluation purposes.  Other example is the privatization of social security systems.  In this case, private pension funds will compete to give the best services, citizens will get directly involved in the administration of their own pension retirements plans -thus taking better care of their own future- and clientelism will be avoided.

The discussion of the social policy reform as advocacy may be done in terms of value choices.  However, a discussion in these terms may turn to be unproductive as ideological bias is unavoidable.  In important degree, this advocacy is accepted as default as there are not other alternative proposals.  This acceptation is explicable, in part, because most of the population is marginal to debate about social policy reform.  De facto in LDCs most of the population has became to be marginal to the management and evaluation of the system of social services despite the advances in educational coverage, health services provision and social security.  For example, the figures indicate that more and more people is in non-formal activities which mean that they are relying on themselves or on informal rather than on formal systems for social services provision -in many cases they never were under any kind of welfare state.  This means that the social policy reform is not involving directly in its processing large population sectors.  In the context of societies building complete new systems -like in Africa- discussions are limited as traditional safety nets are not directly put in question.   Thus the new value arguments tend to consolidate in vacuum of alternative value approaches -the "liberal" proposal appears to be the only one.

The social policy reform as an advocacy is not experiencing competition also because the welfare state model shows financial and political problems of viability and the "real" socialist systems do not appear to be an alternative.  Although there are concerns and arguments indicating that former collective values of social responsibility as expressed by the welfare state model can not be forgotten and that social policy reform is producing more marginalization, there are no clear policy options to operationalize in different program terms the same or opposed value arguments expressed the social policy reform as advocacy.

In this context, a practical way to deal with value orientations is to look at the empirical consequences of policy decisions justified by them.  Is competition improving the quality, quantity and relevance of social services?  Is realistic to rely on the individual's and the communities' capacities for improving social services provision?  Is competition and self-reliance value orientations conducive to the creation of a citizen's ethics more sensitive to equity and sustainable development?  An empirical response to these questions may help the identification of policy options and the practical implications of the new value orientations implied in social policy reform as advocacy.

An outcome of the prevailing social policy discourse is that the reform as an advocacy will make more explicit a contradiction existing in practice between more poverty, the call for less public involvement in social services provision, and the existence of political practices insensitive to growing social needs.  There are indications that social policy reform may be producing social exclusion of new and old social sectors at a time when the visibility of the poor, their political power at the ballots, and their capacity for social protest is larger than before.  This cannot be ignored.  However, it is observed also that political practices continue to be in large extent unaccountable, corruption in the public administration is a persistent problem, and there is indifference from the elites towards the exacerbated inequity. 

A Fact

It cannot be argued that the implementation of social policy reforms is the exclusive result of recent economic and social demands to respond to increasing social needs and decreasing fiscal resources.  The shifts in social policy paradigms reflect demographic, economic, cultural and political changes that have transformed the context wherein the welfare state model emerged in LDCs after WWII.  In LDCs changes in population growth, in the age structure of the population and the epidemiological profile, as well as increasing urbanization, democratization, massive rural-urban migration and persistent social and economic inequity have eroded the conditions that permitted the existence of different versions of the "welfare state".  In regions, like Latin America, where the implementation of the welfare state model advanced considerably -like in Uruguay, Argentina or Chile- the model was implemented following particularistic mechanisms of integration of social groups.  Thus, the public officials, the unions, selected artisan groups, the military or the urban construction workers were provided with social services through different institutional regimes for public education and health care, social security and pension systems.  For example, retirement and pension plans were different for workers and public employees.  Currently, this kind of "particularistic" approach is not more viable because the social structure has changed in spatial, sect oral and occupational terms in the last fifty or more years.

In this context, as a fact, social policy reform in practice is made up by a number of policy decisions and programs addressed to introduce fee-for-service, targeting, privatization and decentralization for the provision of education, health, social infrastructure services, shelter, and social security programs.  In some contexts these approaches are not presented and debated extensively as "reforms" but as policy changes approved with little public knowledge.  In others they are debated and even decided upon through referendum mechanisms.  The experience with decentralization of education and health services, the privatization of social security systems, the targeting of anti-poverty programs is as varied as the countries where these modalities have been implemented.  Chile, China, Ghana or Vietnam provides with common as well as quite different lessons (IDRC, 1996).   In countries where these approaches have been implemented, the social policy agenda has responded to varied degrees of public awareness.  Governments' capacity to deal with internal pressures and international loan conditionalities for introducing these changes has also varied considerably. 

As a fact, the social policy reform often means a wide range of programs at different stages of implementation.  Few countries have advanced to a mature stage of reformed policies.  Chile is one case in Latin America.  In other countries the population have resisted drastic changes like in Uruguay or Bolivia where, for example, the reform of the pension system was rejected or opposed by the population and the unions.  In other sectors, the reform has gone ahead almost with no resistance. A case is the decentralization of education to municipal governments in Chile or decentralization of health services in Brazil and Colombia.

Despite policy reforms are moving ahead, there is a sense of a lack of knowledge about what really is going on.  Even development banks are inquiring about what is the real impact of loans addressed to support the reform of social policies or the implementation of social policies following the new parameters in places with little or no antecedents of formal programs.  Money is spent while certainty about the impact of these changes remains an evasive issue.  Questions like: Who is getting the benefits? Who is losing? Which are the outcomes? What are the expected and unexpected impacts? have no clear response yet. 

Evaluation of social programs in terms of their objectives - intrinsic evaluation- is not scarce.  What is lacking is the assessment of the new policy approaches at the short and long term in regard to of expected and unexpected results -extrinsic evaluation. 

An Ongoing Process

As an ongoing process the reform of social policies is made up by policy blue prints, political proposals, public debates and social demands about the most appropriate ways to provide quality education, basic health services, and social security.  The dominant discussion is about the most convenient mix of the roles of individuals, communities, the market and the state for the provision of these services.  Proposals for the most appropriate mix vary from state dominant schemes to community based arrangements, from highly regulated scenarios to free market oriented provision of services, and from social promotion to profit oriented arrangements.  Some voices of opposition exist but so far no clear articulation of alternative options has appeared.  It seems as if there are no choices.

In this context, how much of the population will be involved by these policy innovations and what the benefits will be are the critical issues.  The assumption is that decentralization, privatization, fee for service and targeting will allow to better address better, for example, the coverage and quality of education and health care or the establishment of viable pension systems.   However, policy options are not clear.  The empirical knowledge about what is going on is insufficient.  Under these circumstance the decision-making process tends to be guided by a discussion casted in positive or negative value terms.   Factual information is insufficient.

These three meanings of social policy reform -an advocacy, a fact, and an ongoing process-are not exclusive and they appear mixed in proposals, evaluations and policy recommendations.  This makes the discussion difficult, and the understanding of the process particularly arduous.  Questions like: How may the "reform" of social policies be a means to reach higher social development? Are the new social policy approaches amenable to creating the learning and participation capacities required for social development? are difficult to respond.  However an answer is really necessary as long-term development possibilities are being compromised.  A brief discussion of risks and opportunities brought by the reform will further underline the need to assess the changes bring about by the reform.

Social Policy Reform: Risks and Opportunities

Given the above context, what is the significance of social policy reform processes for social development conceptualised as the creation of learning and participation capacities?  In order to respond to this question, social policy reform risks and opportunities will be examined in terms of promotion of new value orientations, creation of new institutional arrangements and enhanced social participation.  Social policy reform is an opportunity for more than just a change in the policy system.  It may also be an opportunity for a change in social development conceptions, particularly in relation to social ethics and individual value orientations.

Social policy reform may be an opportunity to change existing value orientations about the role of the state and the individual in social development through promotion of new individual responsibilities.  An example in the case of reformed pension systems based on personal savings accounts.  It can also be a means to create new attitudes -as in the case of parents associations and consumers boards organized to monitor educational processes or the production of reliable goods and services.  It may even be instrumental in the creation of effective market institutions based on open competition as a mechanism to achieve greater accountability by private enterprises and public institutions.  However, policy reforms may also exacerbate persistent inequity, justify the lack of commitment with the poor, promote financial speculation and underground economies, or make traditional social safety nets vulnerable to market fluctuations or to global trends and incertitude.  How to take advantage of opportunities and how to face risks, are questions that need to be addressed.

New Value Orientations

The social policy reform approaches assume liberal social value orientations.  These value orientations represent new value options to societies in LDCs, which during most of the century had collective and socialist values or traditional practices as the only alternative to liberalism as source of inspiration for modalities of social services provision.  Three new liberal value orientations may be identified. First, the development in the population of a stronger capacity for individual decision-making as opposed to reliance on collective decision making in the selection of the best choice.  Second, the development of personal-responsibility rather than state-responsibility as central motivation for organization of social services.   Third, the extension of participation in order to permit citizen's involvement in the process of policy decision-making, implementation and evaluation.

These "new" value orientations are not really new.  They are at the core of the advocacy for democracy, market oriented economies and sustainable development discourses.  The novelty however is the importance and dominance of these value orientations in international circles.  The most important competitors appear to be religious values including Muslim or Judaist fundamentalism.  In particular, religious fundamentalism is inspiring social movements addressed to maintain traditional structures and practices which may not be compatible with the content of social policy reform proposals.  However, it is not clear whether religious fundamentalism will be able to articulate a social policy model different to the social policy reform approach.  The same may be said about the position of the Catholic Church.  Global trends may prove in this case to be much more stronger than expected and the new value orientations may in practical terms prevail over these other alternative value approaches.
 
Several questions have to be responded when assessing risks and opportunities of the social policy reform as advocacy from a value perspective.  Which are the preconditions for the adoption of the value orientations implicit in the social policy reform approaches? Which groups share the new value orientations? Which groups are in a position to take advantage from them?  How can they take advantage?  

Value orientations do not exist in a vacuum.  There are other ethical values and social, economic and political conditions that facilitate particular value orientations to be put in practice.  Individual decision-making, personal responsibility and citizen participation make sense if in practice these orientations render some advantage to the practitioners.  However, in LDCs persistent unemployment, lack of opportunities, financial mismanagement, and corruption of the public administration creates a social environment that is an obstacle to development of individual initiative, commitment to the solution of local problems and even existence of a sense of responsibility as a citizen.  The most eroding factors are the corruption and inequity existing in the judiciary, which creates the atmosphere of a total absence of social cohesion.

Unless there is a major effort for changing current institutional practices -particularly in the political and judiciary circles- and introducing effective mechanisms of public accountability, the new value orientations will probably represent an opportunity for the privileged to take advantage of the situation.  Private financial groups, for example, may find extremely attractive the call for private individual pension programs.  Other groups may find also the personal handling of their savings very opportune, as there have been experiences of complete lost of life savings by the irresponsible management of politicians and corrupt officials.  However, individual decision making, personal responsibility and citizen involvement make sense if the relevant information about these programs is available for decision-making, if politicians and profit oriented organizations are responsible, and if there is space for people to have a say in public matters.  Otherwise, the new orientations may become the cynical rhetoric of those who have much to win and little to lose. 

In this regard there are two practical questions to address: What are the other value orientations that complement and give sense the value assumptions made by the reform approach and what kind of institutional arrangements should be put in place in order to make feasible the practice of these values?

Moving a step forward from the individual to the societal level, other questions also require response.  A set of them relate to social cohesion.  Social cohesion is a value and an also a fact observable through social and economic indicators of equity and participation.  Social cohesion is the base of sustainable development and the glue among social sectors under circumstances of rapid change.   What is the impact of the new value orientations on social cohesion? How can competition and individual decision-making facilitate, undermine or strengthen social cohesion?  Will societies oriented by values different from liberal values be able to maintain their mechanisms of social cohesion once these "new" values are introduced through the implementation of the new policy approaches?  What will the meaning of these new value orientations be for individuals' behaviour at the family, community and local level?  Will new kinds of social cohesion be obtained? 

The responses to these questions are not easy.  There are no particular reasons to idealize social cohesion as the welfare state model in LDCs promoted it or as it exists in traditional or non-western societies.  It is not possible to ignore that the welfare state model advanced in a very fragmented way and only high, middle class and selected popular groups were able to obtain real benefits.  Besides, this model matured only in a few developing societies -examples is Uruguay or Argentina.  The rural population and poorest sectors were almost disregarded in terms of real access to the services provided.  There was also rhetoric in many of the services provided since more attention was put on coverage rather than on quality.  No doubt that the best services went to the urban and most organized social groups.  On the other hand, the argument that social policy was state-responsibility served many times as an excuse to ignore individual and more socially collective responsibilities.  In many cases, statements like "it is not my responsibility, but it is the responsibility of the state" or "this is not my money but public resources" were the justification for disregarding personal involvement in public or community issues or the careful management of public funds.  Under these circumstances, the new value orientations may be an opportunity for correcting this kind of views and behaviour as they promote more reliance on the "responsible citizen and informed consumer".

In more specific terms, one of the most important implications of the new value orientations is the re-conceptualization of poverty alleviation programs.  The impact of these programs on the decreasing of poverty levels is not clear.  This lack of clarity about impact may be a matter of problems in the program design or implementation.  But it may be also an indication that part of the problem is in the creation of a culture of poverty partially based in the idea that  "as a poor I deserve free aid".  From the perspective of the new liberal value orientations promoted by some social policy reform approaches, this is not acceptable. 

To this criticism, other arguments have been added.  Thus, it is argued that a transfer-oriented approach, whereby the goods and services required for subsistence are delivered to the poor directly, should not be advocated for several reasons: a direct-transfer approach becomes less effective over time since its benefits tend to be dissipated into higher prices and into other leakages; it is beyond the fiscal capacities of virtually all developing countries; it needs to be maintained forever; and, it does not allow for a more differentiated approach to enable the poor to decide on their consumption patterns according to their own priorities as defined by their own circumstances and cultures (Adelman, 1986:50).  If one includes among the "assets" of the poor their personal capacities, trained or otherwise, their incomes consists of the value of the services of the assets owned by them that are sold on the market.  In a very basic sense, then, it is argued that the poverty problem is one of too small a quality of assets, too low a volume of market sales, and/or too low a market price.   Poverty-focused approaches to policy therefore should consist of measures to accomplish one or more of the following policy targets: (i) increase the quality of assets owned by the poor (this includes education), (ii) increase the volume of their market sales, and (iii) increase the prices of the services they sell, which includes increases in productivity by upgrading the quality of the labour, the amount of complementary assets employed by the poor or introducing productivity-enhancing technical change (Adelman, 1986:57).

Whether or not these arguments are valid, the issue raised is that unless the poor want to move, that is, there is a wish to abandon poverty by changing ethical and social practices rooted the poverty conditions, little can be done.  The empirical finding of the existence of "hard" poverty existing in some Latin American societies like Chile -that is, persistence of poor people despite assistance programs addressed to them- appears to indicate the existence of values and practices corresponding to a culture of poverty difficult to change.  In this sense, the new value orientations may be an opportunity to change a "negative" value orientation among the poor by asking from them more initiative and less dependency.  But at the same time, the risk is to build the perfect justification to blame the poor for all that happens to them, and to introduce reforms that can ultimately exacerbate poverty levels even more - decentralization or privatization are, in a part, introduced as a means to overcome poverty.

Other implication of the new value orientations affects the coverage and quality of social services.  Will the reliance on individual choices and on market competition improve coverage and quality of social services?   Coverage expanded under the former welfare state model despite the problems of accountability and quality of social services remained.  Today, there is the assumption that open competition will improve these aspects of the policy process -for example this is the idea for improving through competition public education and health services.  This is also proposed as an alternative in situations where policies have to be implemented from scratch.  For example, it is indicated that information about the performance of schools, financial performance of pension plans or about the benefits of different medical insurance plans will facilitate the consumer's choosing for the best option.  The introduction of modalities of competition among schools or hospitals is a social innovation which may render very positive results and eradicate the clientelism and particularism that have plagued traditional systems or former welfare state social policy models in the developing world.  However, to be practical and render the expected benefits of improved coverage and quality this value orientation requires the existence of a market with "good" choices so the individual actually have the possibility to choose.
 
Market mechanisms may render expected good results in social services provision if (i) it is possible for individuals to make a good choice, (ii) there is an ethics among producers to provide the best products and services, and (iii) there are in place institutional mechanisms -including legal and administrative provisions- for ensuring the quality of results.  Do these conditions exist in LDC's? How can these conditions be developed?  It can be argued that the poorer the society, the more difficult is the possibility of operation of market mechanisms because information systems, communication and institutional and administrative procedures are poor.  However, there may be opportunities to introduce the new value orientations assumed by the social policy reform approaches in order to promote the emergence of healthy market mechanisms.  For example, the idea of competition for the provision of some goods and services could be for the benefit of the population.  In this way, a sense of a right for obtaining the benefits of fair competition may be promoted among consumers.  But, the major risks will be losing quality control over social services provided through market mechanisms and the emergence of very speculative operations.

Finally, another critical implication is in terms of social equity.   Will the new value orientations promote, improve or achieve more social equity?  The new value orientations are advocated as the best way to mobilize the individual and community's capacities in order to obtain greater equity, particularly among the marginalized, excluded and poor sectors.  But, no much is said about the responsibility of other sectors of the society.  For example, there are no clear indications that the new value orientations are inspiring a renovated will from elites and privileged groups to promote more equity in terms of better income distribution or more affirmative social policies.  The latest figures indicate for many developing countries that unfortunately income distribution has improved very little, has not improved at all or even that it is worse than before.

However, these observed results cannot be attributed to a lack of sensitive value orientation only.  It is necessary to recognize that the globalization of the economy and the processes of regional integration force capital to go where the profit opportunities are.  The issue is how this trend can be counterbalanced?  A response from the "reform perspective" is that the counterbalance may be obtained by improving the quality of social services and by making labour force costs more competitive -this is one of the reasons behind the need to reform retirement, social security and pension plans.  In this way LDCs will be in a better position to compete and be less vulnerable to global fluctuations.  The new value orientations may contribute to promote new opportunities for more employment, income and equity.  However, there is also the risk that these new value orientations facilitate even further the disregard of inequitable income distribution and creation of mechanisms to get access to new opportunities.  This disregard could produce if it is assumed that the solution for these problems is on the people themselves and the market. 

To summarize, at the individual level these outcomes are contradictory since no market is feasible unless there is the opportunity to be a consumer and the new value orientations imply the people should be given this chance.  This rationale may enhance a particular sense of "social responsibility".  It appears that these two types of reactions are taking place at the same time.

New Institutional Arrangements

The reform is changing the character of the institutional frameworks of social policies.  The new institutional arrangements are being shaped by a process of reduction of the state role in the provision of social services, a decentralization of financial and administrative functions to local entities, and a greater reliance on the private sector -particularly the profit oriented organizations and the NGO sector.

These new arrangements will overlap with former institutional frameworks: former welfare state type of arrangements in countries where this model was implemented -typical case of Latin America- or with traditional structures in countries where there was not this tradition -typical case of many African societies.  The new arrangements will be implemented in contexts with varied schemes of state-civil society relations and varied maturity of market institutions.  For example, options for the best choice of school will be realistic where there is at least more than one school in the vicinity.  In some countries there are significant stock markets which can support new pension plans schemes; in others this not the case and the privatization may only means to put in private hands the life savings of many with almost no control.   It is probable that social policies following the new reform approaches will render more positive results wherein the state and formal local government institutions are stronger or markets of social services and goods are more developed.  This may be the case of more developed societies, urban areas, or sectors more integrated to the global economy.

What may be the risks and opportunities across the whole spectrum of these institutional situations?  In general terms, there is a risk of continued marginality and increased vulnerability.  The poorest groups may continue exhibiting little capacity to have a say in the policy process and even the case may be that middle class groups will joint them. On the other hand, the opportunity may be for more control over social assets.  This is one of the underlying reasons for the implementation of new institutional arrangements.  It is expected to decrease vulnerability in relation to political clientelism, opportunism or corruption. 

Thus, the key questions appear to be: What mechanisms are required to ensure that new institutional frameworks for social policies -decentralization and privatization in particular- will attain its objectives?  How to ensure that stakeholders involved in these process will have the opportunity to exert their rights?  How to make that responsibilities by new actors be fulfilled?  The response to these questions in important degree needs to take into account how resources will be generated, allocated and accounted, and   how capacities of local entities will be developed in order to accomplish the objectives of the reform.  New institutional arrangements require putting in place new administrative procedures, financial modalities, information systems, and mechanisms of accountability.  One side of the coin in the reform process is made up by new value orientations, but the other side is represented by a range of new institutional procedures to make a reality the "goodness" of the new values.  

It appears that the advocacy aspect of the reform has led the discussions rather than the periodic evaluations of achievements.  There is a risk of major national frustrations in terms of unfulfilled expectations regarding the process of decentralization or in terms of major financial and policy failures related to privatization.   Given that the key elements of the reform will be in important degree a by-product of the process -the efficient market assignation of resources, the capacity to make the best choice based on competition of providers, etc- the opportunity of success will depend in large extent on the management of the new institutional arrangements to be put in place by the process.

A major concern is that the new policy approaches will not be able to provided expected services to the population.  In some societies, the limited economic and administrative capacity of the state will make the regulation of market mechanisms, the monitoring of the appropriate behaviour by all actors, or the quality control difficult.  Even in regions like Latin America, where states structures have developed and matured quite well, approaches as decentralization and privatization are facing difficulties.   In other regions, like Africa, where in many countries the state is still a project, capacities are lower.  In this case, traditional organizations will have to play a major role, if they are able to do it.

At this point it is important to discuss the pros and cons of centralized versus decentralized and profit versus non-profit oriented provision of social services.  These are modalities of social service provision promoted by the social policy reform approach -the other two are fee for service and targeting of social services.

The central state management of social services has been in large extent prematurely discarded as an option.  Unfortunately, there has been a kind of self-fulfilling prophecy in this result as state agencies were dismantled while at the same time decentralization was advocated.  Besides, state agencies have suffered the devastating impact of re-structuring policies with the lost of their more valuable human resources. 

There are many examples but one well-known case is the deterioration of public education.  The vicious circle was made up by decreasing salaries, the increasing of teaching hours by the same teacher in order to balance the salary situation, the generation of little attractive working conditions and, at the end, the degradation of the teaching profession and education provided.  The dismantling of an educational system by public policies addressed to cut costs by reducing teachers' salaries and schools resources, have provoked that no qualified human resources filled the system.  The situation cannot find a solution in less than 20 to 30 years (Rama, 1993).  In social policy matters, accumulation and continuity are essential, and the periods of "no investment" are not easy to recover, as it is possible to be done with economic investment.  Under these circumstances, little can be expected from decentralization if other public policies move in a different or opposite direction.  Besides, the empirical evidences indicated that, with very few exceptions, local entities are not prepared for decentralized operations.  Therefore, in addition to compatible social and economic macro public policies, effective central management will be required also to lead the process. 

Similarly, privatization is occurring without having in place clear market rules.  To operate efficiently, markets require mature regulatory institutions and these institutions do not emerge spontaneously.  In the absence of an effective state and central government, privatization has demonstrated to be unfeasible.  One of the reasons is that private investors require guaranties over and above the power of peers and competitors.  This is at the roots of the principle of private property and fair competition.  Examples of successful LDCs, that have achieved steady economic growth and social development, indicate that central government capacity to lead the process is essential.  Chaotic market rules are the most effective way to dismiss private investors.

There is also advocacy to move away from the state towards NGOs and traditional structures.   The NGOs record is good in many respects -project administration, access to beneficiaries, development of innovative program delivery modalities- but that are also indications that NGOs depend very heavily on external sources of funding and that they engage in short term activities.  Traditional structures have been examined from cultural, political and economic angles and one well-documented conclusion is that they are not always the ideal vehicles for providing social services.  They are subject to clientelistic and discriminatory practices -in gender, racial, ethnic and age group terms. 

Thus, from the perspective of new institutional frameworks, the reform approach has several risks, including the unnecessary disregard of central state agencies, the precipitated endorsement of private sector management, and the questionable reliance on NGOs and the involvement of traditional actors and structures with no major evaluation of their weaknesses and strengths.   The major opportunities appear to be in putting in place more effective, efficient, universal and democratic mechanisms for social service provision.

Social Participation

It is expected that the reform of social policies will create among stakeholders the capacity to directly participate, assess and take action in the policy making process.  In ideal terms, the "reform" will prevent clientelism as a mechanism for obtaining social services.  In LDCs clientelism has been one of the modalities by which the political system -modern or traditional- responded to the satisfaction of basic needs.  This meant that particular groups -as mentioned earlier- obtained social services on a corporativist base.  Social policy reform is expected to improve coverage and access to social services by other mechanisms, including enhanced universal social participation in decentralized or privatized social programs.  The question is: How will this expectation be met? 

Those who are not integrated in someway in the social safety nets have little capacity to put pressure on the new social policy systems.  Some examples are groups of women, youth or the extreme poor in the case of traditional societies, or rural workers, the unemployed or the elder in the case of modern systems.  A risk of the social policy reform is to increase this lack of participation and enhance the power of groups already integrated.  So far it appears that this is what is happening.  The leading "reformed" social policy institutions -private pension plans, decentralized private educational services, private health and insurance programs, etc- may count with the participation of the more privileged groups.  This is not really a surprise.  Process of social innovations use to follow the paths of distribution of privileges and social assets in any particular society.  Unless there is affirmative action by someone -for example a central state- it is highly probable that the well to-do will be take advantage and benefit from the innovations.  In this sense, the new social policy reform modalities should not be blamed necessarily for eventual increase in inequity or lack of short-term results. 

There is a dose of unfounded expectations about the capacity to produce positive results with the social participation of popular, indigenous or local groups in the implementation of new policies and new institutional frameworks.  Participation is possible and effective when there is knowledge of the problem, information about alternative options and access to decision-making and power mechanisms.  If these are not in place, quite often participation turns to be rhetorical and instrumental to the power structures, and at the end the people become apathetic. 

Empirical evidences show two kinds of, apparently, contradictory situations.  On the one hand, social protests have come to the surface with unbelievable force.  People in the streets of Tirana (Albany) or Quito (Ecuador) (3) - to mention just two examples- have been able to bring down a government or stop a policy reform.  There are almost daily news about all kinds of civic protests against privatization all around the world.  On the other hand, participation in local activities is elusive.  This relative lack of interest originates in negative past experiences, lack of opportunity -participation is time consuming-, insufficient information or lack of power resources. 

New decentralized structures as well as privatization schemes will overlap traditional structures which have no-written cultural rules that inhibited, for example, the participation of women, youth or the less educated people.  For these reasons, it is not realistic to expect much of social policies following the reform approach to obtain participation, at least at the beginning of the process, in both traditional and modern contexts.  But even in the case of achieving participation, the issue is how to make it effective.   The participation of target groups, beneficiaries or users by itself is not necessarily a guaranty of reaching solutions to particular social problems.  An example is the participation of parents in schools boards.  In the case of well-educated sectors there is little doubt that they will be able to contribute, monitor and evaluate quite well the educational process.   However, in the case of the poorest neighbourhoods the results may be nil unless the process include helping the parents with professional orientation and information.  This type of example may multiply by dozens across social sectors and geographical areas.  The opportunity to have a say is invaluable if one is in a position to identify needs and articulate demands.

Participation modalities brought about by social policy reform approaches may also risk strengthening the negative aspects of traditional power structures.  However -and despite it may seem contradictory- these same structures could be the most viable vehicles for creating effective social safety nets in contexts where former social policies had limited significance or where the state still has limited capacities.  There may also be an opportunity with the implementation of the new policy approaches to involve new stakeholders and re-define the roles of traditional leaders and the content of traditional structures. 

In very important degree, the attainment of participation and its content will be the result of actions for promoting the corresponding value orientations, and the implementation of the most appropriate institutional arrangements.

Conclusion

Social policy reform is an ongoing process.  It has been undertaken globally as a way to overcome the limitations of available financial, institutional and human resources required to deal with social development and the problems of policy systems inspired in the welfare state model.  The policy reform process represents a major shift in the current value orientations and in the existing institutional frameworks that come into play to address basic human needs.  Social policy reform processes should not be taken as a success as the experience has just started.  Some results will take years to be obtained.  It has many risks but it also represents new opportunities.

Currently, it is the most important policy proposal available to overcome global poverty. What are the real possibilities of success this proposal has? is a question that needs further debate.  The discussions until now have focused excessively in the material benefits of policy reform processes: eradication of extreme poverty, upgrading of human resources, competitiveness, and higher productivity.  It is probable that these results will be a mix of success and failure stories.  In this context, the most practical recommendation is to learn with time by putting in place the mechanisms necessary to introduce corrections and obtain lessons.
 
It is critical not to lose from the perspective of analysis and policy assessment that the social policy reform is fundamentally -by purpose or default- an ethical proposal for achieving social development.  The reform approach is a call to build social institutions and individual practices based by on (i) a capacity to take independent and informed individual decisions,  (ii) personal responsibility as opposed to corporate responsibility and (iii) the significant involvement of citizens.  The reform implies also a call for new social cohesion modalities, a redefinition of poverty, a search for efficient coverage and quality of social services, and more social equity. 

At the end of the day, the success or the failure of the social policy reform will depend more on the ethical commitment with human development targets by teachers in the classroom, physicians in the hospital rooms, public officials in ministerial committees, politicians in cabinets or parliamentary committees, mayors in municipal offices, and other key actors, than on more financial resources, more training or more technocratic solutions.  No doubt that all these elements will be necessary.  But it will not be the first time that they will prove to be insufficient. 

People can do little if there is indifference, lack of compromise or political or economic opportunism by the part of those who have to lead the process.  There is no question about the need to involve the population and as many stakeholders as possible.  However, the less privileged can not overcome alone their lack of resources and access to power which are intrinsic to their poverty conditions.  It is for this reason that examination of risks and opportunities of the social policy reform should be done from a social development perspective rooted in a clear vision of social development as human development across the entire social spectrum.

Structural adjustment policies and reformed social policies have been proposed and implemented assuming they are the best opportunities to face the challenge of sustainable development for a world population of over 10 billion by 2050 living in a more degraded social and natural environment.  Economic policies will continue playing a critical role to ensure the provision of more and accessible employment opportunities and material goods required for social welfare.  Social policy reform, as a proposal for promoting social development from a policy perspective, should produce more human value in terms of learning capacities, ethical practice and social commitment.  Human value is the final criterion for assessing the effectiveness and efficiency of social policies, and by extent of development actions.  Economic development provides with material instruments and opportunities but social policies should produce the required value forces as represented in ethical practices, effective organizations, efficient programs and relevant social assets.

The reform of social policies raises many questions and doubts.  An empirical response to them requires research and evaluation.  Research is necessary as the available knowledge about what is going on and which results are being obtained and why is insufficient.  Evaluation is indispensable because the assessment of expected and unexpected results is the only way to introduce timely corrections or design alternative policy options.  At this moment, it is almost irrelevant to question whether or not to implement "reformed" policies.   The point now is how to do it.  It is crucial to introduce in this context a vision oriented towards social policy assessment.  It is now possible to conduct a new kind of social evaluation, in less ideological terms and with more practical results.  As indicated by the case studies that will follow in the next chapters, social policy assessment is a priority in political, practical, economic and ethical terms.

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