Paper short abstract:

This paper conducts an international comparative analysis to understand the role of foreign aid in the evolution of social protection systems in the Global South and identifies key factors that have underpinned these dynamics.

Paper long abstract:

This study conducts an international comparative analysis of the recent evolution of social protection systems in the Global South, paying particular attention to the role of foreign aid in these dynamics. It asks: Has foreign aid contributed to the development of social protection systems? If so, what actors have driven this process? Taking an international comparative perspective is key to understanding the heterogeneous political and economic conditions and dynamics that are shaping social protection systems in the Global South.

Overall, we find that aid has contributed to the expansion of social protection systems in the Global South: an increase in social protection aid by one percentage point is estimated to lead to an increase in the share of countries’ population covered by social protection by approximately 0.25 per cent, which is not negligible. The analysis also identifies key factors that have underpinned the recent expansion of social protection systems, including the economic dynamism of aid-recipient countries, their redistributive fiscal capacity, their insertion into the global economy, and their level of income inequality. Donors’ influence and policy diffusion, the political ideology of incumbent regimes, and previous aggregate shocks also appear to have contributed to the expansion of social protection systems in some regions, particularly Latin America and Asia-Pacific, but not in sub-Saharan Africa. The paper provides a discussion of plausible reasons underpinning these differences.