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that are sensitive to human rights standards that have contributed to highlighting weaknesses in
implementation and to redressing some persisting problems. The Act guarantees a legal
minimum daily wage; workers who are unable to obtain employment through the scheme are
entitled to unemployment benefit. Records of funds received and projects carried out through the
Act are publicly available at the district level and can also be obtained through the right of access
under the Right to Information Act of 2005. Although significant problems remain in the
implementation of the National Rural Employment Guarantee Act, this transparency requirement
constitutes an important safeguard. In addition, the intervention of agricultural workers’ trade
unions, which organized workers participating in schemes under the Act, improved both levels of
participation in the scheme and compliance with minimum wage requirements.
31. The strengthening of social assistance programmes has a fiscal cost. For developing
countries, spending on safety nets has averaged from 1 to 2 per cent of GDP in recent years, but
there are wide variations between countries, depending on the generosity of the programmes and
the administrative costs involved,24 and the quality of targeting. Because of these costs, questions
about the fiscal sustainability of social assistance programmes can constitute an obstacle to their
very adoption, and to their maintenance following a crisis, as a permanent safeguard against
sudden loss of revenues for the poorest members of society. This is regrettable: one of the
reasons why the National Rural Employment Guarantee Act has been generally more satisfactory
than other programmes put in place as a response to the crisis is because it is a permanent
programme, well known to its potential beneficiaries, and the implementation of which is easier
in times of crisis because of the familiarity with the procedures of the local officials responsible.
The establishment of standing social assistance programmes is also consistent with a
rights-based approach; those in need of support should not have to wait until the Government
declares an emergency and acts accordingly.
32. The international community can help overcome the uncertainty factor inherent in the
strengthening of social protection in developing countries by ensuring them against the risk that
social protection schemes, once put in place, do not become fiscally unsustainable following
domestic or international shocks, such as a sudden loss of export revenue, sharp increases in the
price of food commodities on international markets or poor harvests in the country concerned. A
global reinsurance mechanism could be put in place, with premiums ideally paid in part by the
country seeking insurance and matched by donor contributions, thus creating an incentive for
countries to put in place robust social protection programmes for the benefit of their
population.25
24
The administrative costs of cash transfers are relatively low: about 5 per cent of total
programme costs after start-up, compared with 36 per cent of total programme costs for
food-based programmes. See the World Bank, Global Economic Prospects, op. cit., p. 126.
25
On this proposal, see Sanjay G. Reddy, “Safety nets for the poor: a missing international
dimension?” in Giovanni Andrea Cornia (ed.), Pro-Poor Macroeconomics,
Palgrave Macmillan, 2006, pp. 144-165.
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