Sunday, May 01, 2005

Fox announces Social Protection Institute

As part of Labor Day festivities, Fox announced the creation of a new Social Protection Institute. Since I've studied Mexican social security extensively, the new Institute is puzzling in many respects.

The new Institute is going to be housed in the Secretary of Social Development (SEDESOL) and more specifically in Fox's targeted poverty alleviation program "Oportunidades." This just doesn't make public policy sense. Political sense, maybe, but from a public policy perspective, no.

Social "protection" in Mexico is provided mainly by two large social security institutions, the IMSS (private sector) and the ISSSTE (public sector). (Email me for a parts of my book ms if you're interested in an overiew of 80 years of social security policy in Mexico.) The SEDESOL was originally created under Salinas to run his much maligned and much politically manipulated poverty alleviation program, PRONASOL (see my published paper on this).

PRONASOL morphed into Progresa under Zedillo, and then morphed again into Oportunidades under Fox. Granted, Progresa and Oportunidades have better reputations than PRONASOL (i.e., less corruption, manipulation for political ends, etc.), though recent research suggests that Progresa may have been politically maniuplated as well. (Here, I'm thinking of a paper presented by Berkeley Grad Student Tina Green at the MPSA meeting in Chicago, but since her paper isn't online I can't provide you a link...)

Fox's poverty alleviation program (Oportunidades) is essentially an income transfer to poor families so that they can buy food, health care, etc. in the private market.

Anyway, the point is that Fox is creating this Institute within Oportunidades within the Social Development Ministry, rather than housing it either in one of the two social security institutes or creating some overarching coordinating institute. Targeted income tranfers to the poor are not "social protection" and it's ludicrous to create an institute to "protect social security" inside one of the bureaucracies designed to replace formal social security programs.

This is just one more example of how social security (not just pensions in the U.S. sense, but health insurance, etc.) is being privatized piece by piece in Mexico and being replaced with targeted transfers to the poor, a la the U.S. welfare system. It reflects an overall shift in Mexico's welfare regime toward a liberal model. (Again, if you want to hear more about this, email me for book chapters.)

So, from my point of view and a public policy perspective, creating this Institute in SEDESOL makes little sense. From a political point of view it makes tons of sense.

Why? Because the IMSS and to a lesser extent the ISSSTE bureaucracies have been opposed to efforts to privatize pensions, health care, and other benefits provided by these agencies. That's why the Zedillo administration had to create a separate "think tank" to draft the 1995 pension privatization plan--to isolate it from IMSS and the unions. (But I digress....as one is likely to do when discussing your research.)

By creating an "Institute of Social Protection" separate from the institutions that have historically provided social protection, Fox can ensure that studies and policy proposals that come out of the Institute are more likely to promote privatization and similar reforms of social protection. Proposals are likely to emphasize targeted benefits for the poor, since that has been SEDESOL's primary focus. Now, I'm not against benefits for the poor, but I am against politically manipulated policies that become new forms of clientelism. I'm also against such policies when they are proposed as replacements for traditional social security. This has been the tendency of late in Mexico.

In sum, Fox's announcement of this new Institute should be viewed with the same skepticism as Bush's claims that the's going to "strengthen social security" through privatization.

posted by Michelle @ 11:39 PM,

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