Strategies for Integrated, Coordinated and Equitable Social Protection

Background and Context

In the context of its study on Strategies to Promote an Integrated, Coordinated and Equitable Social Welfare System in China, in 2013 the UNDP office in China commissioned UNRISD to prepare a section on the development of welfare systems in East Asia. The UNRISD contribution looks at how Japan, the Republic of Korea and Taiwan Province have worked to overcome fragmentation in their social protection systems, and the lessons their experiences might provide for China. It focuses in particular on how they dealt with fragmentation in state provision of welfare benefits and social services in the areas of primary health and medical insurance, compulsory education, and social assistance and basic pension programmes.

Publication

The UNRISD contribution has been published as Diversity in Moving Towards Integrated, Coordinated and Equitable Social Protection Systems: Experiences of Japan, the Republic of Korea, and Taiwan Province of China in An Analysis for An Equitable and Sustainable Welfare System (Appendix C: Supporting Report 2, pp. 102-166).

UNRISD contribution highlights

The UNRISD contribution, delivered to UNDP China in late 2013, focuses on three different types of fragmentation: (i) the fragmentation of authority between the central, regional, and local government levels, i.e. vertical fragmentation; (ii) the degree of coordination between plural actors on the same government level, particularly in delivering specific benefits or services, i.e. horizontal fragmentation; and (iii) functional fragmentation such as inter-sectoral division.

Relevant lessons are, first, that the historical legacies of the systems of welfare provision have had a significant influence on present-day welfare institutions. Second, rapid industrialization has also significantly affected the shape of welfare institutions. Third, poverty was considered an “economic structural problem” to be solved through private employment rather than public assistance, and social policy was understood as both a short-term strategy to legitimize political power and a pre-emptive measure to contain the problems of industrialization. Fourth, although Japan, the Republic of Korea and Taiwan Province have been struggling with increasing inequality over the last two decades, they performed well in terms of reducing poverty and inequality in various social and economic spheres, such as wage and income, education and health, until the 1990s.

Selected findings

• Japan, the Republic of Korea and Taiwan Province all planned or started to build social benefits and services targeting a substantial number of people either before or in the middle of industrialization for such reasons as nation building, legitimacy enhancement, social integration, and resource mobilization for industrialization.
• A fragmented system of welfare provision does not necessarily prevent coverage for a whole population. With significant government funding, a highly organized system, and substantial participation of civil society, universal coverage of entitlement can be achieved, as seen in the case of Japan.
• Universal entitlement to join a contribution-based insurance scheme in which the insured have to pay substantial premiums is less likely to guarantee actual universal coverage of benefits and services due to the reluctance of those with low income to pay premiums, as in the case of the Republic of Korea.
• Both Korean and Japanese health systems show that the private sector can play a significant role in enhancing accessibility. However, the state, rather than market, has played a significant role in certification, controlling the reimbursement of insured services, and monitoring the quality of service, and consequently managing the insurance system in both countries.
• In all three cases, civil society organizations have played a significant role in shaping the reform of systems of welfare provision. Various spaces provided by the democratic system such as a judiciary that is relatively easily accessed by the public, public hearings and consultations, and open and transparent electoral systems provide opportunities to translate demands into policies.
• With regard to the issue of fragmentation, the developmental trajectories of the health and pension schemes in these three cases show various pathways involving diverse actors, institutional arrangements, and processes to reduce the costs of fragmentation. Although Japan still has fragmented systems of health and pension schemes, company-based or local government-based insurance funds are dealing with both schemes and aim at enhancing the level of inter-scheme coordination. The Republic of Korea, beginning with fragmented health schemes, achieved single payer schemes through a strong state role in coordinating different insurance societies.

This work was commissioned by UNDP China.