 The first social fund, the Bolivian Emergency Social Fund founded in 1986, had an explicit objective as a safety net. Several other funds founded in the late 1980s, especially in Latin America, had safety net objectives, as have some in other circumstances – in post-conflict countries of after natural disasters, for example. When short run income support is among a fund’s main objectives, the social fund becomes the institutional mechanism to organize labor-intensive public works that provide income to workers in the short run and that help to build infrastructure that should foster growth and/or human capital development in the medium run.
Social funds can also sometimes be a means of delivering small-scale social services of various sorts. In order to stress the short run objectives, the project selection criteria may weight labor intensity of projects, speed of response more than in other cases. This short-run motivation for social funds is, however, increasingly less common. Recently social funds are more used as a tool for community-driven development, decentralization or as an alternative means of organizing the creation or maintenance of infrastructure. A comprehensive body of information on social funds, their uses, impacts, and good practice in design can be found on the World Bank Social Funds web site.
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