ABSTRACT
Over the last twenty years, governments in both North and South have been under major pressure, for rather different reasons, to reduce the cost of social protection. In the industrialised world, the high unemployment levels of the late 1970s and 1980s conspired with the more long-term problems of an ageing population to produce a huge secular increase in the cost of an already hard-to-control social security budget. In developing and transitional countries, many of them lacking comprehensive state pension and social security schemes, there was nonetheless serious downward pressure on various expenditures for the social protection of poor people – for example, subsidies on food, primary health and primary education – during the long recession of the 1980s and, in eastern Europe, early 1990s. In both environments, therefore, conjunctural poverty expanded;1
the pressure to control the budget deficit, underlined in the developing countries by the IMF and other international financial institutions, became more intense; and the question arose whether there might be any way of combating that poverty which would avoid the fiscal costs associated with previous anti-poverty measures.
