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be depended upon for channelling some of the popular desire for safety and security the state level and causing the State to assume a portion of the burden through measures which we call social security. Furthermore, because of the inter- governmental "demonstration effect" of good behaviour and the international diffusion of the social security technology the governments of developing countries are far more familiar with the nature of socio-economic hazards attending the process of economic development than the governments of developed countries were at their comparable level of economic development. Therefore, social security provisions in developing countries may be promoted up to the very limits of resource capability.
To test this hypothesis, the proportion of GNP devoted to social security and per capita national income in table 2 may be compared. The cross-country correlation co-efficient between the two variables is 0.93 on the basis cf arithmetical values as shown in table 2 and 0.85 on the basis of logarithmic values. (I have also placed the data on double-logarithmic paper, though I have not presented the chart here, to form my own visual impressions about the relationship between per capita national income and GNP proportion devoted to social security.) These correlation co-efficients are statistically highly "significant", implying that some systematic forces should have been at
work to produce such a tight correlation. The positive correlation between per capita national income and GNP proportion devoted to social security among the ECAFE countries is doubly significant when compared with the negative correlation between the two variables that Peter Kilby and I previously obtained among developed countries of the West. In many developed countries, the cost of social security has hardly run up against resource constraints. Since socio-economic hazards are more or less in parallel
with per capita income, the insufficiency of social security in some high-income countries must be supplemented by private sources of economic security. In the United States of America which shows the lowest proportion of GNP going to social security a mong all developed countries, private insurance strongly competes with social security, and whether participation in social security should not be made entirely voluntary is a persistent political issue. Recently one citizen puts the matter as clearly and as simply as follows1:
If one wished to contribute [to social security], one would collect. If one didn't wish to contribute, one would not collect. The party not wishing to contribute could avail himself of the many plans offered by private insurance companies and get a greater return and protection for his money that the SS [social security] plan could ever give him.
Indeed, at as high a level of economic development as the United States, there is a large "discretionary" margin of income for many people on top of an unlimited ingenuity of private insurance companies for tapping this margin. Even so, the proportion of GNP devoted to social security in the United States has been rising slowly over the years and by now would have reached nearly 10 per cent of national income while per capita income exceeds US$5,000.
Positive correlation between per capita income and GNP proportion going to social security among the ECAFE countries suggests that the use of social security as a principal means of protection against socio-economic hazards has kept pace with the rise and spread of these hazards in the course of economic development. Since countries differ in per capita income, positive correlation between this and GNP proportion devoted to social security obtains if resources in favour of social security move in parallel with socio-economic hazards which are in turn positively related to per capita income. This in part demonstrates the alertness of the governments of the ECAFE region to the problem of economic security and their ability to use an increasing portion of growing resource capability to meet its challenge.
4.
Proletarianisation, urbanisation and social security
Socio-economic hazards in the course of economic development arise from the vagaries of the market which accompany resource mobility, especially human resource mobility. Two of the many manifestations of huma n resource mobility in the process of development are an increasing proportion of the labour force participating in wage-earning activities ("proletarianisation" for short) and an increasing
1 Phyllis Barchas, "A letter to Editor", New York Times, 5 June 1974.
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