Safety Nets and Social Protection: Program Options and Design Considerations IPRCCIFPRI Internationa

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Safety Nets and Social Protection Program
Options and Design ConsiderationsIPRCC-IFPRI
International ConferencePOVERTY REDUCTION
STRATEGY IN THE NEW MILLENNIUMEmerging Issues,
Experiences and Lessons2324 May 2006, Beijing,
China

• Dr. Michelle Adato
• Food Consumption and Nutrition Division
• IFPRI

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Outline of Presentation

• Key concepts
• Why safety nets?
• Program options
• Considerations in program choice and design
• Information gaps and areas for research

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Key concepts Safety nets and social protection

• Nets, ropes, and ladders
• Social assistance, social insurance
• Protective (relief) preventive (avert
  deprivation) promotional (enhance incomes
  capabilities)
• Family, community, employer, NGO, state

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Why public safety nets?

• Erosion of private safety nets (family,
  community, landlord, employer)
• Economic change changing social structure
• Shocks repeated, multiple affecting many
• Climate, illness, conflict
• Reduction of formal employment
• Reduce impact of shocks and new trends
• Climate, economy, conflict
• Protect people who suffer from chronic poverty or
  vulnerability due to
• Economic conditions
• Natural resource endowments
• Age
• Disability
• Discrimination

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Why Safety Nets? (continued)

• Promote growth
• Temporary shocks gt long-term consequences
• Human capital investment gt productivity gtgrowth
• Reduced expenditures on social problems
• Political stability
• Ethics

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Short-term buffer or long-term development?

• Immediate income or food transfer
• Investment in human capital
• Health, nutrition, education, skills
• Investment in productive activities
• Productive Infrastructure
• Land or environmental improvement
• Agriculture
• Small enterprises
• Investment in care
• For children ill people

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Program options 1 Insurance

• Types
• Health unemployment Injury/disability life
  old-age assets
• Life cycle or event-triggered
• Allocation of contributions
• From government, private sector, beneficiaries
• Informal sector

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Program options 2 Price subsidies and Vouchers

• Price subsidies
• Food, utilities, housing, services
• Options targeted rationed seasonal
• Food stamps or vouchers
• School vouchers or scholarships

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Program Options 3 Cash Transfers

• Unconditional
• Direct food or cash transfer as basic safety net
  no obligations
• Conditional
• E.g. on participation in services usually
  health, nutrition and education
• Can be designed to achieve varied and integrated
  objectives, e.g. Maternal and Child Health,
  Early Childhood Development
• Often includes adult education
• Can have work obligations
• Usually requires upgrading of services and
  infrastructure

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Cash Transfers (continued)

• Considerations in conditioning
• What is the problem?
• Demand or supply constraints?
• Need for incentives
• Condition on what?
• Public attitudes toward social assistance
• Labor market and disincentives
• Urgency of social assistance
• Barriers to participation in services
• Costs

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Program options 4 In-kind transfers

• Food distribution
• Unconditional
• Emergencies, conflict, severe poverty
• Conditional
• on training in income generating activities,
  nutrition, literacy, numeracy, savings accounts
• on school attendance on work

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In-kind Transfers (continued)

• School feeding
• Meals or snacks
• Direct feeding
• Maternal and Child Health Nutrition
• Combines services with take-home food rations

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Program options 5 Micronutrient strategies

• Supplementation
• Fortification of food
• Dietary diversity and combinations

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Program options 6 Productive activities

• Support for agriculture
• Package of seeds, inputs, credit, training
• Public works
• Transfer (cash or food?)
• Productive infrastructure (cost-effectiveness?)
• Skills training (current income second round
  effects)
• Considerations gender, seasonality, labor
  markets
• Microfinance
• Role of public and private sectors
• Individual or group-based
• Usually cash but can include in-kind loans

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Considerations in program choice design 1
Objectives Capacities

• Priority problems and objectives
• E.g. income poverty malnutrition (type?)
  education deficits (for whom?)
• Ex-ante protection (insurance) or ex-post remedy
  (relief or reversal of trend)?
• Short-term or continuous?
• Budgets
• Time horizon of problem
• Service availability or potential for increase
• Administrative complexity and capacity
• Technical information systems governance
• Centralized, decentralized or mixed?
• Financing
• Design and implementation
• Role of community participation in targeting,
  oversight, implementation
• Comparative advantages in capacities and knowledge

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Considerations 2 Targeting

• Targeting
• What target groups prioritized and why? Life
  cycle approach
• Conceptual basis for targeting
• Saves budgetary resources, and avoids more
  taxation
• Maximizing welfare impact, equity, fairness
• Political support
• Mechanisms for targeting
• Geographic (marginality indexes)
• Individual/household survey (e.g. income
  consumption HH composition education assets)
  collected at home or center
• Categorical or demographic targeting  
• Self-targeting
• Community-based targeting
• Costs?
• Errors of exclusion and inclusion
• Measurement errors
• Politics
• Equality and social relations
• Appeals process

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Targeting Some general findings

• Out of 122 antipoverty interventions in 47
  countries (Coady, Grosh and Hoddinott 2004)
• Median program transfers 25 more to the poor
  than universal or random allocation
• 25 of programs delivered less to the poor than
  universal or random
• Best performance Means testing, geographic and
  self-selection based on work requirement
• Progressive but more variable Proxy-means test,
  community-based, and demographic-young children
• More limited potential Demographic-elderly, food
  subsidies and community bidding
• However, no single best targeting method
• Only 20 of outcomes attributed to method choice
• Implementation more important!

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Considerations 3 Costs and Financing

• Cost effectiveness (in achieving objectives)
• Financing
• What is the size of the budget?
• Can it be increased? Economic and political
  considerations
• Who finances?
• Donor or treasury?
• Who has the resources?
• Central, regional or local government?
• Public-private partnerships
• Beneficiary contributions
• Availability of in-kind resources?

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Considerations 4 Level of benefits

• Poverty levels and poverty line
• Cost of living
• of HH members
• Market wage rates
• Opportunity costs of participation in services
• Budget
• Coverage

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Considerations 5 Economic and Social factors

• Functionality of markets
• Structure of economy
• Size of formal informal sectors
• Migration
• Labor market conditions
• Labor surplus or shortages
• Will transfers reduce incentives for labor market
  participation?
• Effect on wage rates?
• Design features that reduce disincentives (size
  of transfer, conditioning)
• Household structure and social relations,
  including gender relations
• Cultural practices
• Depth of poverty, skills, individual capacities
• E.g. microfinance vs. HC approach

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Considerations 6 Governance

• Legal framework
• Discretionary or entitlement?
• Integrity
• Incentives
• Conflict
• Special needs
• Capacities and interest of private sector and
  NGOs
• Potential for state partnerships

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Considerations 7 Other

• Health and illness
• HIV/AIDS, other
• Natural disasters
• Response and anticipation
• Coordination and synergies between programs
• E.g. Geographical seasonality
• Complementarity of services
• E.g. Food distribution with skills training
  (VLDP, Bangladesh) day care and Early Childhood
  Development (ICDS India) public works and
  home-based care of ECD (South Africa)

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Considerations 7 Evaluation

• Why evaluate?
• Effectiveness in achieving objectives
• Efficiency of resource allocation
• How often?
• How financed?
• Control groups?
• What to evaluate
• Changes in key indicators (quantitative)
• Changes in social dynamics (qualitative)
• Operations
• Effectiveness of behavior change components

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Food versus cash for schooling in Bangladesh
Impact on school enrollment (A. Ahmed)

• Both FFE and PES encourage poor families to
  enroll their children in primary school.
• The rate of increase in enrollment was greater
  for (FFE (18.7) than for PES (13.7)

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Information gaps areas for research

• Comparative research on programs costs, impacts,
  growth linkages, trade-offs
• How to better integrate social protection and
  livelihoods activities
• Where is the line?
• Where is the transition?
• Innovations in integration
• Types of activities
• Transitions to labor market
• Are there trade-offs?
• What is the right mix?