QUA TRAIN

An initiative to train " Masters" in social protection financing

OUTLINE

Summary

This initiative will train experts in social protection and in social protection financing for social security institutions, insurance companies, governments, research institutions and consultancy companies. Although, world wide a relatively small professional group, these experts are a pivotal element in national social governance and will make national social protection systems economically, financially and socially more sustainable, and thus help to provide reliable benefits for the people they serve. The initiative aims at the implementation of a Masters programme with the collaboration of the International Labour Office (ILO) and the Universiteit Maastricht (UM). The initiators seek partnership with other international institutions (e.g. the World Bank and the International Monetary Fund) and other Universities.

Depending on the state of economic development, countries redistribute between 5 and 30 per cent of GDP through national social protection systems (i.e. social assistance schemes, social insurance schemes, health benefits, pensions and short-term cash benefits). Redistributive machines of such order of magnitude need to be designed, adjusted, reformed, monitored and managed by highly qualified social protection specialists and (financial) managers. The world-wide trend towards revisions and reforms of welfare and protection regimes, further increases the need for well-qualified quantitative social protection analysts and managers. International organizations, insurance companies, NGOs, pension funds, consultancy companies and research institutes assisting governments in all countries, have difficulties in attracting such social sector specialists. Well trained experts in each country would make a notable difference with respect to the long-term viability of national social protection systems, and thus, the long-term social security of people. Many developing countries and transition-economies, but also some industrialized countries, do not have these specialists or managers; nor do they have access to comprehensive, concise and problem-oriented training programmes. This programme fills a pivotal void in global professional governance training.

1. Background and context

Many contemporary national social protection systems are rightly or wrongly challenged on the grounds of ineffectiveness (doing the wrong things) or inefficiencies (doing things wrongly). If such systems fail, they can fail due to bad design, but also due to bad management and defective governance. In many countries, social protection systems are in their infancies and are not yet fully developed. In other economies, social protection systems are subject to reforms and transformation. To design new systems and to reform existing ones are major challenges to policy designers. To monitor and evaluate social protection systems, their subsystems and their impact, is a major concern for policy-makers and their advisors and researchers. A major component of overall social protection governance is financial governance, i.e. the competent utilisation of all quantitative techniques that keep social protection systems in short- and long-term financial equilibria. Well-designed, well-governed and well-managed social protection systems also help to maintain balanced national budgets.

Trained experts in:

are needed to design and to implement social protection policy successfully.

In general, these experts should be in a position to analyse in national and international contexts social protection systems or individual subsystems from six different angles, i.e. in respect of:

Only such "360 degree analysis" of new and existing social protection systems would permit a full quantitative assessment of their short- to long-term sustainability. World-wide there are far less experts capable of undertaking these analyses, than required. As yet, no established professional education programme deals with all of the above-mentioned aspects. The ILO reckons that a minimum of about 500 qualified specialists would be needed world wide on a continuous basis. Universities and professional training institutions generally do not offer comprehensive training in (quantitative) management of social protection systems, as the number of experts per country is too small to warrant national training programmes.

This was the reason for the International Financial and Actuarial Service of the ILO to take the initiative to establish such a comprehensive programme in cooperation with partner universities. The UM (Faculty of Economics and Business Administration) will serve as the hub of a world-wide training initiative. National donor organizations and international agencies will be requested to finance a number of fellowships. Two national governments (i.e. the Government of Germany and the Government of the Netherlands) have been requested to contribute to the general administration and financing of the programme. Technical advice on the contents of the programme is sought from the World Bank, the International Monetary Fund and other international organizations with a mandate to provide advisory services to national governments and institutions and to transfer know-how and technologies within capacity-building projects to member states and associated members.

2. Objectives of the Masters' Programme

The immediate objective of the programme is to start training social protection specialists and to create a permanent training infrastructure. During the first years, it is expected to train between 20 and 30 specialists annually. The long-term objective is to improve the design and implementation of national social protection systems through the improvement of the (quantitative and empirical) bases for national political decision-making processes. Through improved design and governance, prerequisites for the sustainability of social protection systems, ultimately whole societies will benefit from the project.

The (financial) governance and management of national social protection systems - in developing as well as developed countries - has, in many cases, suffered from the fact that the institutions and governments faced difficulties to attract and keep qualified staff. Social protection work was, and often still is, lowly regarded in professional communities in many countries. This project tries to change that attitude through the provision of a sound and internationally recognized graduate level training programme and through the creation and maintenance of an international professional network which will provide continuing technical support to its members.

3. Approach

The initiative proceeds in three major phases:

Phase One: Preparation - Determination of curriculum and training material

The UM (Department of Economics in the Faculty of Economics and Business Administration) and the ILO (Financial, Actuarial and Statistical Services Branch of the Social Security Department), assisted and advised by partners from the academic community, international organisations and (future) employers, will establish a curriculum for the trainees. A draft outline is provided in the next section. Depending on their specific curriculum, students will be awarded with a master level degree from the UM (either a Master in Social Protection Financing (MSF) or a Master of Economics, see below for details). The core of the programme is a mid-career programme for social protection specialists from national social security institutions or national government agencies. Courses will be open to other students of the UM wishing to specialise in social protection financing.

A series of textbooks on Quantitative Methods in Social Protection, presently being compiled by the ILO and ISSA (International Social Security Association, Geneva), with the assistance of experts from the World Bank, the IMF and other institutions and teaching material and textbooks developed and written by the UM Faculty of Economics and Business Administration (in collaboration with other scholars) and the simulation models for financial and actuarial analysis of social protection schemes (developed by the ILO and academic institutions), will form the backbone for the reading material of the courses.

Phase Two: Conducting a pilot training programme

Phase two will be executed under the joint management of the ILO's Financial, Actuarial and Statistical Services Branch and the Faculty of Economics and Business Administration of the UM. Collaboration will be sought with other international organizations and academic scholars in the implementation of the programme.

During the pilot phase the language of instruction will be English. At a later stage, training in the other two official languages of the ILO will be organized depending on the needs of the trainees and social security institutions. Collaboration with universities in other regions will be sought once the structure of the programme and the course contents have been tested. Academic and practical guidance will be provided by an advisory group (board) composed of some experienced professionals and scholars of national systems, donor agencies, international organizations and academia.

Phase Three: Post pilot training

Routine programmes will be offered by the UM within the framework of the programme for International Economic Studies (IES). The ILO will continue to collaborate notably through the provision of training material and conducting practical exercises. The Financial, Actuarial and Statistical Services Branch of the ILO and the IES will also act as a hub for the international professional network and ensure the exchange and dissemination of technologies and experience. Collaboration will be sought with other international organizations and donors for endorsement of the programme and for financial support to the programme and its students.

4. Draft study programme

The Masters programme will be offered as a one-year mid-career course in the framework of the graduate programme in International Economic Studies of the Faculty of Economics and Business Administration of the UM. The proposal below is a preliminary draft and will be subject to further discussions with the ILO and other supporting agencies, with the Faculty of Economics and Business Administration in Maastricht and with the academic and donor community. Final decisions on the programme are expected to be made in Summer 2000. The start of the programme is planned for September 2001. Please also note that names and titles are provisional.

One year Master in Social Protection Financing

Students in the one-year programme will be officials in social protection institutions or government agencies primarily (but not exclusively) in developing countries (but not exclusively), who are working in the area of social protection and whose candidature is supported and sponsored (through the granting of study leave) by the institutions. Minimum prerequisites for the participation are a BA level university education in economics, mathematics, actuarial studies, statistics, business administration or comparable subjects and 2 or 3 years of professional experience in social protection. Fluency in English is a prerequisite for the pilot phase. After successful participation in the programme (12 months), students will earn a degree as a Master in Social Protection Financing.

Students will be enrolled in the UM. Detailed conditions have to be worked out at a later stage. Tuition will be in the order of 5,000 EURO for one year (which could be modified depending on the availability of general donor support for the programme). Direct financial support to the students through fellowships organized by the ILO will be limited to students admitted to this programme.

Degree requirements are:

• Participation at eight training units (called blocks);

• Participation at one skill training course (PC skills, drafting course, etc.); and a

• Master thesis - potentially in combination with a practical exercise.

The programme will be offered as a full-time, 12-months course. In well justified cases students and their supporting institutions can be offered the possibility to follow the programme in two semi-annual (around 6-months) parts during two successive academic years.

Teaching will be done within the framework of the Maastricht Problem Based Learning (PBL) approach focussing on theoretical and practical training by problem-oriented assignments. Tutorials will be organised in small groups of 12 to 15 students (4 hours of tutorials every week for every block). The PBL-system is the standard educational method used at the UM.

The academic programme will consist of at least six or seven compulsory and one or two optional courses (blocks). The compulsory courses are contained in the following tentative list. The optional courses may be chosen from the list but also from the general faculty programme.

(1) Managing social risk: The socio-economics of social protection systems

(compulsory)

General introduction to the structure, scope and levels of social protection of national systems. Introductory course aimed at understanding the major links of social protection systems with the economy in general, with private product markets for insurance and the like, with the labour market, with the fiscal system and with redistributive policy targets.

(2) Statistical tools for social protection management; social protection performance indicators

(compulsory, except for mathematicians and statisticians)

The course provides a general review of basic methods of descriptive statistics, statistical frames for social security institutions, national social accounting systems, the SNA statistical framework, methods to construct indicators to measure living and social conditions, as well as the performance of national social protection schemes. The introduction is focussed on the measurement and analysis of poverty and income (in)equality. Special attention is given to (household) surveys and the statistical techniques required for their analysis.

(3) The economics of the labour market

(compulsory)

Intermediate course in labour economics and the analysis of unemployment and employment both from a microeconomic and macroeconomic point of view.

(4) The economics of insurance and pensions

(compulsory if course (8) is not selected)

Intermediate course dealing with the conditions, modalities and functioning of the private insurance and pension markets in theory and practice.

(5) Financing social protection

(compulsory)

The course comprises the financial, fiscal and economic aspects of financing social security through contributions and / or taxes, managing social security investments, financing techniques (alternative contribution systems, levels of funding), social security reserves and capital markets.

(6) Actuarial mathematics and actuarial practice in social protection

(compulsory)

The course teaches the actuarial-mathematical bases of social security schemes and actuarial techniques required for valuating long-term and short-term benefit schemes.

(7) Social budgeting

(compulsory)

The course teaches the concepts of social accounting and social budgeting: meaningful social accounting methodologies, modelling techniques, linking macroeconomic scenarios, labour market structures, institutional budgets and government budgets, for a comprehensive assessment of the financial viability of national social protection systems or individual schemes.

(8) Quantitative techniques in health care financing

(compulsory if course (4) is not selected)

The course teaches actuarial, financial valuation and modelling skills in health care, the basics of health economics, basic econometric modelling techniques in health care.

(9) Quantitative tools for policy design, monitoring and evaluation

Basics in overall policy design and understanding the links between private markets, social institutions (i.e. families) and all the subsystems within the social protection framework. The application of quantitative tools and practices in social policy monitoring and policy- and project-evaluation at various levels of the implementation of social protection policy.

(10) Public finance and institutional economics

The economic and financial analysis of the role of states, local authorities, independent institutions, social partners, private companies and NGOs in the implementation social protection policy. Fiscal policy analysis.

(11) Practical project exercise

Depending on the availability, students may be offered the possibility to be assigned to a practical exercise that can form the basis for their Masters' thesis or that can replace one of the course requirements. The practical exercise will ensure that the training programme does not remain entirely theoretical. It will normally consist of a concise technical assignment given to the student in the course of an ongoing quantitative ILO project, an exercise that is conducted under the supervision of an ILO staff member or a similar exercise linked to ongoing projects linked to another participating international institution and / or to the UM Faculty. Trainees are required to write a report on their assignment.

Master in Economics: Specialization in International Economic Studies and Social Protection

This programme offers a degree alternative for students with a strong background in economics. Students must have a Master-level degree in Economics and be seeking an additional specialisation in social protection. The programme is open to candidates with no professional experience in social protection.

Fluency in English is a prerequisite for the pilot phase. After successful participation in the programme (12 months), students will earn a degree as a Master in Economics, Specialisation in International Economic Studies and Social Protection. Students will be technically enrolled as regular students at the UM and will pay tuition fees accordingly.

The study programme is similar to the one-year Master programme in Social Protection Financing, but requires a minimum of two courses in public finance and / or macro- and microeconomics.

5. Logistics, organization and responsibilities

The two Master degree programmes are offered and organized by the Faculty of Economics and Business Administration. A senior faculty member will be responsible for their academic contents and organization. During the pilot phases (phases one and two as described above) the mid-career programme will be managed by an ILO Project Director heading a special team, in close collaboration with the UM Programme Director. The organization of the logistics and recruitment during the pilot phase is the joint responsibility of the Faculty and the ILO. They will work out the details of the organisation during phase one. The ILO has the intention to allocate resources and / or manpower to contribute to the organization of the programme in Maastricht and / or Geneva.

6. Financing

Details of the financing will be worked out during phase one. It is understood that both, the Faculty and the ILO, intend to contribute financially and in form of resource persons. A part of the cost will be recovered through contributions from sending institutions. The ILO intends to allocate approximately two professionals during the pilot phase (depending on the outcome of the discussions with the two potential donor governments). These persons would contribute to the organisation and to the teaching of the courses as well as to the recruitment of candidates for the programme. The ILO might further contribute by giving or organising grants and scholarships to the students. The ILO and the Faculty will seek more support in terms of endorsement, allocation of manpower, funds and scholarships from the World Bank, the IMF and possibly other donors and international organizations.

7. Implementation steps