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p. 5 of 15 BACK | NEXT Executive Summary I. An Analytical Framework A. Introduction B. Trade and Poverty C. The Capacity to Manage Risks: Prevention and Ex-post Coping II. Regional Experiences III. Policy Actions to Help Poor People Gain from Globalized Markets

Global Poverty Reduction 2001 : I. An Analytical Framework

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C. The Capacity to Manage Risks: Prevention and Ex-post Coping

19. Social safety nets provide a means to ease the tension between trade liberalization and social protection goals. Trade liberalization may leave economies more vulnerable to external shocks, the adverse impact of which can quickly overwhelm the poor. It is crucial that safety nets are already in place so that social protection can be provided in a timely and efficient manner. Major types of social safety net programs include: cash or in-kind transfers, price subsidies, public works, fee waivers for social services, supplemental feeding and nutrition programs, targeted human development programs and microfinance programs, or social insurance programs adapted to the needs of the poor.

20. Establishing social safety net programs requires adequate planning for possible future shocks, including those associated with trade liberalization, based on timely and reliable information on vulnerable and poor households. The aim should be to design programs that expand and contract automatically as the need arises and that do not crowd out existing informal safety nets (such as intra-family support), recognizing the limitations on the extent to which formal safety nets reach those in the informal sector and rural areas. In most cases, planning has been inadequate and social safety nets have concentrated on adapting existing programs employing simple targeting methods. The design and implementation of social safety nets and the use of resources for this purpose should be transparent, with independent and periodic program evaluations and information on different programs and eligibility criteria made publicly available.

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