Social safety nets support governments; sub-sovereign governments face high social risks

Samar Maziad of the Sovereign team discusses the cost effectiveness and advantages of social safety nets when responding to shocks. Plus, Jennifer Wong of the Sub-Sovereign team explains why emerging market regional and local governments face particularly high social risks.

Inside this episode:

• Samar Maziad of the Sovereign team discusses the cost effectiveness and advantages of social safety nets when responding to shocks. (begins at 1:20)
• Jennifer Wong of the Sub-Sovereign team explains why emerging market regional and local governments face particularly high social risks. (begins at 7:27)

Related content:

• Sovereigns – Emerging Markets: Social safety nets support credit quality by improving response to shocks, reducing social tensions - Well-targeted safety nets improve governments' response to shocks, mitigating the severity of economic disruption. The availability and effectiveness of these programs vary widely.
• Regional and local governments: Emerging markets Infrastructure gap, inequality, weak labor markets underpin exposure to social risks - Given the scale of these challenges and the limited fiscal flexibility of emerging market RLGs, social considerations will continue to weigh on credit profiles for many years.
• Sovereigns – Global Explanatory Comment: New scores depict varied and largely credit-negative impact of ESG factors - Considering exposure to environmental and social risk, governance strength, and financial and institutional buffers, ESG factors commonly have a negative impact on sovereign ratings.