Hacia una nueva seguridad social en el siglo XXI: sin solidaridad en el financiamiento no habra universalidad / Towards new social security systems in the 21st century: universal coverage is impossible without cohesion in financing

ABSTRACT

In the countries of Latin America and the Caribbean, social security systems have traditionally been almost exclusively the responsibility of the public sector. These systems have had major shortcomings, such as low coverage rates, unbalanced budgets, inadequate funding, and poor management of resources. In order to solve these problems and face the increased demands associated with demographic and epidemiological transitions, in the 1990s a number of countries began to reform their social security systems. These reforms have been characterized by three fundamental features a) a search for a closer link between contributions and benefits, in order to better balance income and expenses, b) changes in the public-private composition of the systems that allow a greater private role in the financing and delivery of services, and c) an emphasis on market mechanisms as a way to promote efficiency in applying resources, and leaving to the State a role as a regulator and as a guarantor of basic benefits to groups that, because of their socioeconomic conditions, cannot make certain minimum contributions. This article looks at some of the problems raised by the reforms carried out so far, and the lessons that can be learned from them. The piece also analyzes the relationship between universal coverage and societal unity. In addition, the article suggests that the main challenge with social security reforms is that of moving toward universal systems that sinificantly expand coverage. In order to achieve that, it is necessary to strengthen the mechanisms of cohesion in financing and to improve efficiency by introducing market instruments that do not negatively affect the unitarian character of the financing. The piece concludes that it is necessary to increase coverage; improve management; be concerned about the design of the public-private makeup; identify the responsibilities of the private sector and of the government in financing, provision, and regulation of social security systems; and introduce and strengthen unity mechanisms in financing (AU)