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Policy paper

SPACE Better responding to shocks through social protection: COVID-19 insights on identifying and responding to dynamic poverty

31 May 2021 — By Ludovico Carraro and Marta Marzi

The Coronavirus pandemic has affected substantial proportions of the population raising questions about how social protection systems could be used to respond. One of the key policy questions emerging is how to deal with a sudden, large-scale increase in poverty levels. This paper relies on pre-existing microsimulations of the pandemic impact on poverty in Bangladesh, Georgia, Mongolia, Pakistan, and Sierra Leone. It assesses what type of social protection interventions would provide adequate support to households badly affected by the shock.

Overall, the paper also finds that social protection interventions can have significant impacts on reducing poverty in response to shocks. It identifies two main strategic directions in the development of social protection policies to achieve this. First, the need to invest in social protection systems that can scale up rapidly through inclusive social registries or social protection floors. Second, the need to develop social registries, broader information systems, and approaches to determining eligibility that are more flexible and can capture chronic poverty as well as those affected by shocks.