Informal Welfare in Low-Income Countries

This blog is based on an article in the Journal of International and Comparative Social Policy by Zahid Mumtaz and Peter Whiteford. Click here to access the article.

Low-income countries are confronted with fiscal constraints that restrict their capacity to provide welfare to their populations. As a result, informal networks – such as immediate and extended family and friends, NGOs, and religious organisations – fulfill the welfare needs of a large segment of poor and vulnerable people in such countries.

Madrassas are religious schools that have been prevalent in many Muslim countries and South and Central Asia for centuries. In the current era, madrassas are viewed as providers of a specific form of education, leading to terrorism and fundamentalism. However, our research in Pakistan shows the importance of these institutions in satisfying the welfare needs of a large segment of the country’s poor and vulnerable population.  We compared the welfare support provided by madrassas with formal support provided by the government to families for determining its usefulness. In the wake of recent events in Afghanistan and the rise of the Taliban, most of them are madrassas graduates; our research emphasises the importance of formal welfare by the state to counter fundamentalism and extremism.

Owing to the lack of data on informal welfare in Pakistan, we adopted a unique methodology for data collection. We randomly selected 14 cities in Pakistan based on the multidimensional poverty index. The sample included two cities that were former conflict-affected tribal areas bordering Afghanistan. The families chosen for the study were sending their children to madrassas. We used a mixed methodology for the research where 570 families were surveyed and 90 were interviewed in-depth. In addition, 40 heads of madrassas were also interviewed. The survey instrument used for the research included over 300 questions. This allowed us to gather in-depth data across various dimensions of the surveyed families, including formal and informal sources of welfare at the disposal of families (further details can be found in the original paper).

We found that a majority of the surveyed families were impoverished and facing serious insecurities and vulnerabilities. Unemployment, precarious informal sector jobs such as street vendors, coal mining, agricultural tenants, child labour, the prevalence of infectious diseases, absence of adequate insurance, loss of lives and migration because of conflict and natural disasters were common among the surveyed families. The insecurities made them eligible to receive the benefits of formal welfare by the state, however a sizeable majority were not receiving these benefits but were aware of such programmes.

We found that madrassas are a significant source of welfare for the surveyed families, apart from being education providers. The benefits received from madrassas included cash assistance to the families in times of need, health treatments, help in marriage and burial services, and most importantly, madrassas education makes their children employable. Such employment includes mosque leaders, Islamic education teachers in schools, and re-employment in the same madrassas or running their own madrassas. Although such employment is a low-paid informal sector job, it is better than remaining unemployed or begging.

In a lower-income country such as Pakistan, we found that a large section of the overlooked marginalized groups relies on informal welfare administered by madrassas because the coverage of formal welfare is low and the income benefits are inadequate. Meeting the eligibility criteria to receive welfare by the government appears to be seen as limiting access to formal welfare programmes. The accurate identification of the poor for receiving state welfare remains an unaddressed issue.

In contrast, beneficiary families consider informal welfare more valuable because it is provided quickly, no bureaucratic eligibility criteria are expected to be achieved by beneficiaries, and sufficient support is received to manage their requirements. These factors contribute to making informal welfare more valuable than formal welfare. We argue that incorporating such strategies in social policy making will lead to better welfare policies for many other global south countries. In addition, any policy intervention aimed towards poverty reduction necessitates adequate financial support to be dispensed to families. In the wake of financial constraints faced by low-income countries, this can lead to a trade-off between low coverage of formal welfare and enhanced income transfers.

This study has shown that no comprehensive data on poor families receiving informal welfare exist in Pakistan or elsewhere. We proposed a novel methodology where madrassas can be used as an essential source to construct datasets for future research. Other studies or international organisations can adopt this methodology to develop datasets where similar informal welfare sources exist.          

Pakistan and its neighbouring country Afghanistan have seen a substantial increase in the growth of madrassas over the years. At this stage, our research cannot answer questions about the dynamics of madrassa expansion in Pakistan. However, it seems clear that madrassas in Pakistan are filling substantial gaps by providing informal welfare.  As a result, vulnerable and marginalized populations will continue to depend upon madrassas welfare, and the elimination of extremism and fundamentalism is not expected in the foreseeable future. This implies that donor agencies and western countries should direct their efforts to establish formal social protection strategies as a possible response to reduce the poor’s reliance on madrassas to reduce extremism over the long run. Such assistance need not come through aid; instead, the experiences and best practices could have been shared.

About the authors

Zahid Mumtaz is a PhD Candidate at the Australian National University.

Peter Whiteford is Professor at the Australian National University.

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