Social budgeting consists
of two basic components. The first component is the statistical
basis, i.e. the methodologically consistent compilation of the
revenues and expenditures of a country's social protection system
which is the Social Accounting System (SAS). The second
component is the forecast of income and expenditure (budget projection)
for normally a medium-term period and / or simulations of social
expenditure and revenues under alternative economic, demographic
and / or legislative assumptions and is known as the Social
Budget. We use this notion in a comprehensive way. It comprises
all analytical and interpretative work centered around the SAS
plus its transformation into a concrete mathematical
model application. Social budgeting is a critical aspect of the
overall government budgeting and mid- to long-term planning process.
A full round of social budgeting is completed when (a) the SAS
has been established and (b) the projection has been
carried out and interpreted.
Social budgeting is one of the most powerful tools
for the quantitative management of national social protection
systems. It serves two main purposes. It is (a) part of the
general social policy planning process and (b) part of any meaningful
medium term financial planning process. Social budgeting
is thus a macro-device in national financial planning. National
financial planning, i.e. essentially the attempt to reconcile
public and semi-public expenditure with tax and contribution revenues,
is an indispensable part of responsible governance in any society
under any economic system.
Social budgeting supports the political decision
making process at the increasingly sensitive intersection between
social policy and national financial planning.
The central objective of the book is to provide
social policy planners with a pragmatic reference for the social
budgeting process. It should thus be read as a self contained
"How to build a Social Budget guidebook" which should provide
guidelines to a quantitative social protection expert on how to
build a SAS and how to use this in Social Budgeting. The focus
of the book is on the concrete creation of Social Budgets as an
operational tool of governance.
book is mainly written for those elaborating short- to medium-term
financial planning, management and monitoring, i.e. who have a
planning horizon of two to five, sometimes of up to ten years.
It is part of a series on quantitative techniques in social protection
being published by the Financial, Actuarial and Statistical Branch
of the Social Security Department of the ILO, together with the
International Social Security Association. Other volumes in this
Theory of Social Security Pension Schemes
Practice in Social Security Pension Schemes
in Health Care Finance