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Since the 1980s, targeting has been high on the social policy agenda in the global South. In the wake of structural adjustment programmes, governments tightened their fiscal policies and it is in this context that targeting was widely adopted. Proponents of targeted social policies (e.g. Seekings, 2012) have celebrated the respective reforms as being pro-poor. Cash transfers and cash-for-work schemes were prominent examples of the newly established targeted poverty reduction programmes. Governments justified the shift towards means-tested social policies not only with reference to widespread poverty: a potent criticism against the existing social safety nets in the global South was that they favoured only a very small number of people, namely, the original stakeholders of import-substituting industrialization. Industrial workers, public sector employees and the military were entitled to social security schemes, whereas the vast majority of the workforce - informal sector workers, rural workers and peasants, indigenous people and women who were not employed - remained excluded (Wehr, 2009). While "Bismarckian" social security systems in continental Europe were extended over a period of several decades to large parts of the population, this did not happen in developing countries. In the global South, labour markets were formalized to a much lesser extent.
In cases such as Brazil or India, "Bismarckian" social insurance regimes have led to regressive targeting and "stratified universalism" (Filgueira, 2005): given the large informal sector and highly segmented labour markets, it is the upper income strata that predominantly benefits from public transfers. In other words, the so-called universal approaches are incapable of meeting the test of universalism in so far as they have reflected a labour market segmented along gender and racial lines and excluded many groups. Stratified or "false universalism" (Powell, 2009) fails to account for the fact that people are situated differently in economic and social terms. While it provides social protection to part of the workforce it cannot reduce overall inequality, and in particular where coverage is very limited it reinforces existing inequalities.
However, the "targeting paradigm" has not been spared from criticism either. Frequently dubbed as a central feature of "neoliberalism with a human face" (JEP, 2003) or "inclusive liberalism" (Porter and Craig, 2004), critics have stressed problems such as information asymmetries, inclusion and exclusion errors, costly registration...