Institutional factors and people's preferences in social protection

Franziska Gassmann, Pierre Mohnen & Vincenzo Vinci


Social Protection (SP) policies and institutions play multiple roles for the achievement of inclusive development. Over the last decade a paradigm shift took place whereby SP is no longer seen just as a cost for an economy, but instead as a social investment. Still, governments of low and middle-income countries are reluctant to invest in nationally-owned SP systems. Developing countries redistribute only a small share of GDP to households in extreme or persistent poverty. This paper estimates whether and to what extent the level of SP expenditure varies with institutional quality and people's preferences using cross-country panel data.

JEL Classification: H11, H53, I38

Key Words: Developing countries, Institutions, Public policies, Social protection

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