Bangladesh's social protection system has been one of the country's quiet success stories. Over the past several decades, it has helped millions of poor and vulnerable households cope with poverty, natural disasters, food insecurity, and economic shocks. The government now spends more than Tk 1.20 trillion annually on social protection-one of the largest components of public expenditure. This sustained investment reflects a strong national commitment to inclusive development and has contributed significantly to Bangladesh's progress in poverty reduction.
Yet, despite this impressive expansion, an uncomfortable question remains: Are we getting the maximum return from this investment? The answer is mixed. While Bangladesh spends substantially on social protection, the system remains fragmented, many benefits are too small to make a meaningful difference, and targeting errors continue to prevent support from reaching those who need it most. As Bangladesh prepares for the next stage of development amid rising living costs, climate change, and slowing economic growth, improving the quality of social protection has become just as important as expanding its budget.
The challenge today is not simply to spend more. It is to spend smarter.
One of the biggest weaknesses of Bangladesh's social protection system is how resources are allocated. A significant share of reported social protection expenditure goes towards pensions for government employees and other expenditures that do not primarily target poor or vulnerable households. While these expenditures serve legitimate public purposes, they should not be mistaken for poverty-focused social assistance. As a result, headline budget figures often overstate the amount of public resources that directly support the poorest citizens.
Fragmentation is another major concern. Bangladesh currently operates around 90 social protection programmes administered by 25 ministries and agencies. Over time, new programmes have been introduced to address emerging priorities, but many overlap in objectives and administration. This fragmentation increases administrative costs, weakens coordination, and makes it difficult to ensure consistency in beneficiary selection and service delivery. Meanwhile, public resources are concentrated in a handful of programmes, leaving many others underfunded and unable to provide adequate support.
Benefit adequacy also deserves urgent attention. Many cash transfer programmes have failed to keep pace with inflation. Monthly allowances that may have been meaningful several years ago now cover only a small share of household needs. For many beneficiaries, transfers account for only a tiny proportion of household income and provide limited protection against rising food prices or unexpected shocks. Expanding coverage is important, but expanding coverage without ensuring adequate benefit risks spreading resources too thinly to make a lasting difference.
Perhaps the most critical issue is targeting. Every social protection system faces two risks: excluding households that genuinely need assistance and including households that are relatively better off. Bangladesh is no exception. Despite improvements in programme administration, significant inclusion and exclusion errors remain across several major programmes. Improving targeting is, therefore, one of the most cost-effective ways to enhance the impact of existing public spending without necessarily increasing the overall budget.
The government's recent introduction of the Family Card Programme marks an important milestone in this regard. By using Proxy Means Testing (PMT) and digital government-to-person payment systems, the programme aims to improve transparency and reduce leakages. It has the potential to become the country's most significant social protection reform since the National Social Security Strategy (NSSS) was adopted in 2015.
However, international experience suggests that no single targeting method is perfect. Proxy Means Testing is a useful tool, but it cannot fully capture the complex and dynamic nature of poverty. Household circumstances change frequently, and statistical models inevitably make errors. For this reason, Bangladesh should adopt a hybrid targeting approach that combines PMT with community validation and evidence-based categorical indicators such as age, disability, occupation, housing conditions, and other easily verifiable characteristics associated with poverty. Such an approach would improve both fairness and accuracy while strengthening public confidence in the system.
Evidence also shows that some programmes consistently perform better than others. Rather than creating new schemes, policymakers should focus on strengthening programmes that have demonstrated strong targeting performance and positive impacts, including the Vulnerable Group Development (VGD) programme, Mother and Child Benefit Programme, Old Age Allowance, disability allowances, and allowances for widowed and deserted women. Increasing benefit levels, expanding coverage, improving digital payments, and regularly adjusting cash transfers for inflation would significantly enhance their effectiveness.
Bangladesh must also pay greater attention to urban poverty. Rapid urbanisation has transformed the country's poverty landscape, yet social protection remains disproportionately focused on rural areas. Low-income urban households often face insecure employment, high living costs, and limited access to formal safety nets. Expanding successful programmes such as the Open Market Sales (OMS) programme, introducing labour-intensive urban public works, and gradually extending the Family Card Programme to urban poor households would help address this growing gap.
Looking ahead, social protection should evolve beyond providing temporary relief. The objective should be to help households build resilience and eventually graduate from poverty. International and domestic evidence suggests that transfers become far more effective when combined with complementary interventions such as nutrition education, livelihood training, financial inclusion, and access to healthcare. Such integrated approaches not only reduce immediate hardship but also strengthen households' capacity to withstand future shocks and improve their long-term earning potential.
Health protection deserves particular attention. Medical expenses remain one of the leading causes of financial distress among poor households in Bangladesh. A serious illness can quickly erase years of progress and push vulnerable families back into poverty. Piloting targeted health insurance and expanding health voucher programmes would strengthen the country's social protection architecture while improving access to essential healthcare for low-income households.
Bangladesh has already laid a strong foundation. The National Social Security Strategy (NSSS) provides a clear policy framework, and the Family Card Programme offers an opportunity to modernise beneficiary identification and programme delivery. The next phase of reform should focus on improving the quality of spending rather than simply increasing its quantity. Better targeting, stronger coordination, adequate benefits, digital delivery systems, and regular impact evaluations should be the pillars of a modern social protection system.
Bangladesh's ambition to become an upper-middle-income country cannot be achieved through economic growth alone. Growth must be accompanied by a social protection system that is efficient, equitable, transparent, and capable of protecting citizens against increasingly complex economic, health, and climate-related risks. Smarter spending-not simply higher spending-should therefore guide the next generation of social protection reforms. If public resources can be directed more effectively towards those who need them most, Bangladesh will not only reduce poverty more rapidly but also build a more resilient and inclusive society for decades to come.
Akhter U Ahmed is an Emeritus Research Fellow at the International Food Policy Research Institute (IFPRI), Washington, DC, USA and Md Sadat Anowar is a Research Analyst at the IFPRI-Bangladesh country office.