Social Protection in Crisis: Can Universal Basic Services Be the Way Forward?

Balsam Gharib

29 April 2024

The staggering imbalance in global and national wealth distribution has caused significant human and environmental suffering, prompting emerging discussions on the need to reevaluate the dominant systems of economic and social well being for the 21^st century. Oxfam International recently reported that at current rates of poverty alleviation, ‘it will take 230 years to end poverty, but we could have our first trillionaire in a decade’. Such a huge concentration of global corporate power and inefficiency in regulating the private sector is causing great fragmentation and polarization, especially with skyrocketing inflation and debt, and increasing vulnerabilities caused by the looming spectre of climate change. Welfare states and social protection measures – social programs and intiatives that have acted as pillars of human dignity, solidarity, and prosperity for nearly a century now – might just be at a critical junction where their dominant forms need to be re-evaluated. The World Economic Forum (WEF) meeting last January emphasized the challenge of income inequality and failing social protection, but, as per the usual, the discussion ended without offering a holistic view of the problem or advancing practical plans that address the fundamental flaws in social protection systems. This needs to change if there is going to be any serious action on a policymaking level to respond to the emerging landscape of vulnerability and the unprecedented levels of inequality.

Under neoliberalism, various welfare states across the Global South and Global North have been largely viewed as a burden on the economy, with critics arguing that increased social expenditure causes slow growth and inflation. Consequently, there has been a prolonged period of rolling back the state, resulting in a systematic erosion of the quality of public services, inducing people – especially the well-off – to leave the public system and pay for private social care. This has caused vast disparities in access to essential services and perpetuated destitution. Realizing the marginalization that neoliberalism naturally causes by being a market for the most powerful, governments and international institutions have attempted to mitigate these effects by reconfiguring social protection policy, especially following the 1980s crisis of neoliberalism, the 2008 global financial crisis, and, most recently, the Covid-19 pandemic. As such, this blog emphasizes the necessity and relevance of the proposal for Universal Basic Services as a response to the commodification of care services and shrinking social safety nets in both the Global North and the Global South.

Neoliberalism in the West and the Downgrade in Social Wage

European social protection schemes developed considerably following the post-war consensus to address the scourge of unemployment and poverty that was rampant across Europe. They were designed to encourage employers to create new job opportunities and empower low-wage and low-skilled workers through earned-income tax credits among other social subsidies. This helped increase employment and boosted economic growth as the capacities of people to consume increased. It also allowed citizens to become less dependent on the market for their well-being, especially with the increase of governmental spending on public services.

Following the 1970s, public debt increased to cover the demand for welfare benefits amid slow growth and high inflation rates in advanced economies. It laid the groundwork for the rise of neoliberalism which chipped away at the value of the ‘social wage’ by promoting a vision of economic and social prosperity based on principles of private ownership, minimal state intervention, and market fundamentalism. Social spending was no longer seen as a measure to empower labourers throughout industrialized and developing economies, but rather a burden that would increase public expenditures. In practice, this was manifested through incentive-based supply-side policies, taking the form of personal and business tax cuts and market deregulation to increase privatisation. Ideally, such measures were hoped to increase the employment level in the long run as economic growth and productivity increases, but evidently, in comparison to the 1945-80 era, slower economic growth and greater inequality rates were recorded on a global scale.

The Unevenness of Globalised Social Policy

Countries of the Global South have clearly faced a different reality, one shaped by legacies of colonialism and neo-colonialism, when it comes to their adoption of social protection schemes. Notably, there is no unified historical account of social protection that caters to the whole of the Global South; there are, however, common arrangements that have affected the emergence of social protection schemes and development in the region. The boom in universal social protection policies in the South within the first decade of the twenty-first century has come with the dissemination of the “agenda for social policy” by key development actors, originating in the Global North, including the ILO and the World Bank among other prominent international donor organisations. While this emerging paradigm of social policy was guided by a vision to empower impoverished communities, it ended up being used by governments of developing countries to adopt certain social protection mechanisms only when it is contingent on developmental aid that would assist in economic growth rather than seeing it as a policy to empower and protect workers from precarity. Such an unbalanced view of social policy can also be attributed to the ‘uneven development’ that has forced less developed countries to follow the agendas set by advanced states, arguably as a continuation of the legacy of colonialism.

Put simply, in the pursuit of foreign investment, the underfunding of social protection becomes an imperative to maximise profits and maintain a comparative advantage. This is quite prominent in labour intensive economies that depend on cheap labour and lower taxation to maintain a competitive edge. As a result, a poor standard of social protection policy is maintained as it would otherwise ‘burden’ the economy. That is why any proposal for improving social protection systems based on market values and individuals’ ability to pay will likely suffer the same fate as present social protection systems in the Global South. The uneven footing of developing economies, shaped by a complex tapestry of historical colonial experiences, requires social policies that are independent of market forces to actually empower workers against precarity.

A Paradigm Shift in Social Policy

One of the prominent propositions that fall in line with the calls for the ‘decommodification of care services’ is the plan for Universal Basic Services (UBS). It is a proposal that underscores the need to reduce the dependency on a market-based income by providing better and more equitable access to basic services including decent education, healthcare, transportation and clean water. With heavy privatisation under neoliberalism, essential goods and services have become out of reach for many people, requiring longer hours, submission to poor working conditions, and sometimes taking on multiple jobs, simply to access provisions for their basic needs. Seeing that most of people’s incomes are spent on attaining basic services, the UBS proposal underscores the need to make the means of everyday survival universal, accessible to all people regardless of income or status, at the point of need.

The practice of UBS provision is not a completely novel one as most OECD countries have some form of a universal service such as the NHS in the UK and universal healthcare in Nordic countries. However, UBS calls for improving the reach of such institutions, ideally through a public provider instead of for-profit contractors and private insurers. It also calls for the extension of what is deemed as ‘basic services’ to cover not only healthcare and education, but also transport, information access and eventually shelter and food.

Upon initial consideration, one may question the fiscal feasibility of such a proposition. However, there are already myriad research initiatives, both theoratical and practical, and pilot projects, primarily led by the IGP, which empirically assessed UBS schemes and concretely demonstrated UBS feasibility within reasonable budget allocations. The IGP estimated in 2017 that a UBS framework for the UK, covering housing, food security, transportation, digital accessibility, childcare and adult social care would incur an annual cost of approximately £42.16 billion, corresponding to 2.3% of the GDP. If incrementally introduced, the UBS model can be an affordable alternative to the existing capitalist welfare systems, especially since its operationalisation would not require a wholesale reshaping of tax and benefit systems.

This proves to be more difficult in conflict-ridden contexts such as Lebanon, where public trust in government is minimal, and non-state actors have monopoly over the provision of services. Yet, as Anne Coote and Andrew Percy (2020) highlight in their book on the case for UBS, there isn’t a single unique funding scheme for UBS and any funding effort will ultimately vary according to the range of ownership models and power relations that characterise different contexts. The contextual application of the UBS model has to include different contracts and funding arrangements along with direct and indirect taxation, but it has to do so in a way that does not exclude users who cannot financially contribute to the services. This is opposed to both a private provision model (which only serves those who can afford to pay for a service) and a “means-tested” welfare approach which requires rigorous assessments of income and withholding of provision from those who do not meet the relevant criteria. It is also important to acknowledge that the needs will differ across countries, as well as between communities within the same polity, so the means to meet and fund those needs will differ.

How would that look in practice? One way to envisage a way forward is through embedding collaborative and sustained discussions between prominent stakeholders (e.g. providers, practitioners, and experts), on the one hand, and citizens of different locales, on the other. Such a discussion will highlight the services and other activities that are essential for people in specific locales to meet their needs and flourish. The decision of who needs what will vary from one area to another and the eligibility will be determined in this joint discussion. In this sense, UBS is a localized proposal that shifts the power from the national or federal level to local governmental bodies such as municipalities that will play a primary role alongside citizens in determining the optimal direction of UBS. It is a new dynamic that is not top-down and not fully bottom-up; the state would still need to collect and invest public funds along with ensuring equal access to such funds, but it will not have monopoly over the provision of services.

Proponents of UBS acknowledge that it is a proposition in need of experimentation and refinement to adhere to the specificities of different contexts, but it is nevertheless a step in the right direction: that is de-linking the well-being of people from the needs of the market. In other words, the power of UBS lies in its focus on making the means of everyday survival more accessible instead of relying on GDP growth with social security schemes to magically cure unemployment and poverty (which it never has succeeded to do). There is plenty of evidence already to show that countries with decommodified public services have better quality of life as it improves people’s access to the basic means of living. The challenge remains in securing the funneling of public funds into public services to make them more universal and affordable. Moving forward, piloting UBS projects in different contexts, in the Global North and Global South alike, is very essential to help us understand its operationalization in practice.

About the author

Balsam Gharib is a researcher on Livelihoods and Politics at IGP's Prosperity Co-Laboratory for Lebanon (PROCOL Lebanon).

Photo credit: Maxime Guy on Unsplash