Covering the Unseen: Fixing Global Social Protection for the Poorest Quintile

The World Bank's report reveals that 2 billion people in low- and middle-income countries remain excluded or inadequately covered by social protection systems. It calls for urgent reforms, increased financing, and improved targeting to achieve universal and equitable social protection.

The World Bank’s Social Protection and Jobs Global Practice, in collaboration with researchers Emil Daniel Tesliuc and Ana Sofia Martinez Cordova and with contributions from international partners like the International Monetary Fund (IMF), the International Labour Organization (ILO), and the Global Partnership for Universal Social Protection (USP 2030), has released a groundbreaking report titled “Mind the Gap: Coverage, Adequacy and Financing Gaps in Social Protection for the Extreme Poor and the Poorest Quintile.” As the first in a series of background papers for the State of Social Protection Report 2025, this study draws on an extensive new dataset—ASPIRE 2.0—to assess how well social protection systems are working in 153 countries, especially in low- and middle-income nations. Through a sharp analytical lens, the paper reveals that billions of people remain invisible to or underserved by the very systems designed to shield them from poverty and shocks.

Two Billion People Still Left Behind

Despite modest progress in expanding social protection coverage, the world remains far from delivering on the promise of universal social protection. As of 2022, 4.7 billion people in low- and middle-income countries were covered by some form of social protection. However, 2 billion people were either entirely excluded or inadequately covered, including 1.6 billion with no access to benefits or contribution schemes, and another 400 million poor individuals receiving benefits too minimal to make a real difference. The numbers become even more alarming among the poorest: over 53 percent of those in the bottom quintile and 87 percent of people living in extreme poverty are still unprotected, with that figure rising to a shocking 98 percent in low-income countries. These findings lay bare the widespread failure of social protection systems to reach those most in need.

Social Protection Coverage: A Story of Inequality

The report highlights a sharp divide in the extent and quality of social protection between countries at different income levels. In high-income countries that recently transitioned from middle-income status, such as Slovenia, Bulgaria, and Chile, universal or near-universal coverage is now a reality. In contrast, the vast majority of low-income countries continue to struggle with both limited reach and benefit levels, leaving the poorest especially vulnerable to shocks. Sub-Saharan Africa and South Asia account for the bulk of the uncovered population. Furthermore, when China and India are excluded from the data, the global coverage gap for low- and middle-income countries jumps from 32 percent to 49 percent. Notably, even among those who are covered, many receive benefits that are insufficient to lift them out of poverty or protect them from falling back into it. The report warns that at the current pace of progress, the world will not reach universal coverage for the poor until well after 2040—far too late for the 2030 Sustainable Development Goals.

Inadequate Benefits and the Persistence of Poverty

One of the most urgent findings of the report is that even when social protection programs do reach poor households, the support they provide is often not enough. In low-income countries, the average adequacy of social assistance is around 20 percent of household consumption, well below the level needed to close income shortfalls. By contrast, in high-income countries, social insurance programs often replace up to 70 percent of welfare for the poorest. On average, social protection programs in emerging and developing economies reduce the income gap for the poorest quintile by only 16 percentage points, leaving a 27 percent shortfall. For people living in extreme poverty, current benefits reduce the poverty gap by just 1 to 3 percentage points in countries with high poverty prevalence. The report makes clear that increasing the adequacy of benefits is essential if social protection is to play a meaningful role in eliminating poverty.

Financing Gaps Undermine Progress

Low spending levels are a major driver behind these persistent gaps. In 2022, average spending on social protection across EDEs stood at 5.3 percent of GDP, but low-income countries spent just 1.6 percent, compared to over 8 percent in high-income countries. In absolute terms, the disparity is even more severe: high-income countries spend over 150 times more per capita on social protection than low-income countries. These figures highlight the enormous financing gap that continues to hamper progress. The lack of investment in LICs translates directly into weak coverage, low adequacy, and underdeveloped delivery systems. The report emphasizes that closing these gaps will require not just increased domestic revenue but also international support. With smart reforms and well-targeted fiscal expansion, even low-income countries could take significant steps toward universal social protection.

A Better Path Is Possible: Targeting and Efficiency Matter

Beyond the issue of funding, the report points to inefficiencies and poor targeting as major culprits behind the weak performance of many programs. On average, only 30 percent of social assistance benefits reach the poorest 20 percent of the population. This means that 70 percent of the resources are either mistargeted or diverted to higher-income groups. But there is hope: the best-performing programs in every income group manage to direct up to 88 percent of benefits to the poorest, proving that better targeting is achievable. These programs use tools like proxy-means testing, hybrid models, and community-based mechanisms to ensure resources go where they are most needed. The report introduces the idea of a “pro-poor targeting frontier,” urging countries to align their programs with the performance of their best-in-class peers. With more efficient design and delivery, countries could significantly improve coverage and adequacy, even without drastically increasing spending.

The study ultimately offers a sobering but actionable message: the world’s poorest are being underserved not only because of resource constraints but also due to system design and policy choices. The findings make it clear that universal social protection is technically within reach, but realizing it will require bold leadership, stronger financing, and a concerted push for equity. If countries embrace smarter targeting, expand their fiscal space, and prioritize the most vulnerable, they can finally bridge the dangerous divide in social protection and build more resilient and inclusive societies.