Politics and Public Policy in Latin America by Steven W. Hughes & Kenneth J. Mijeski

Author:Steven W. Hughes & Kenneth J. Mijeski [Hughes, Steven W. & Mijeski, Kenneth J.]
Language: eng
Format: epub
Tags: Reference, Political Science, Essays
ISBN: 9780429302404
Google: 4YTlxgEACAAJ
Publisher: Routledge
Published: 2019-01-15T12:32:51+00:00

General Patterns and Problems of Social Security Evolution

During the twenty-year period from 1941-1961, social security in Costa Rica evolved in much the same fashion as it had in other Latin American countries. Urban groups, rather than rural ones, tended to receive coverage, and those with employers were more likely to benefit than those who were self-employed. Throughout this period the major social security problem was not strictly political but rather financial: how to provide the necessary resources to support a complex people-oriented delivery system that was under constant pressure to offer more and better services. Costa Rica's rapidly expanding population (which had doubled in number every twenty years since 1927) and its accelerating urbanization placed the public sector and particularly the social security system under acute pressure (Araya Pochet 198S).

Thus, while elite political commitment is always a critical element to successful policy implementation, the necessary material resources must also be forthcoming or the policy will remain at the level of rhetoric only. Social security programs are complex in this regard. They traditionally have been financed by a coalition of state, employer, and worker groups who each bear a percentage of the total program cost. Additional financial resources to run social security programs may come from indirect taxes on consumption, through interest income generated by loans from available capital, or by outside loans from international agencies. However, the key to social security success ultimately depends on the tripartite system of taxes paid by the state, the employer, and the worker. This method of program financing is fraught with problems; historically in Latin America, the state has been delinquent in its financial obligations, particularly when it is also an employer. Workers have resisted taxes in general, regardless of the fact that these funds directly support programs of personal benefit. This problem is compounded by the severe problems of tax collection from workers who are self-employed. Adding to the complicated nature of social security financing is the fact that employers often evade their social security obligations in one of two ways. Either they simply delay making payments to the system, hoping that the subsequent sanctions, if there are any, are negotiable; or employers underreport the number of employees and their salary levels, thereby reducing their total social security financial obligation.

In Costa Rica, the basic consensus over social security issues as described above has reduced significant policy debates on the program to those related to financing and administrative questions. Thus, often the major policy question in Costa Rica, as elsewhere, is not how a program gets initiated, but how it can be kept going and at higher levels of capacity and accomplishment. This has been the basic policy dilemma concerning Costa Rican social security, as we will see below.

By 1961 the Costa Rican social security system faced serious financial problems. Middle age had set in; the program was not keeping pace in coverage with the country's rapidly expanding population. Something had to be done to correct this.

Two significant policy initiatives were formulated in response to the problem.

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