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Dr. Michelle Adato Food Consumption and Nutrition Division IFPRI

Safety Nets and Social Protection: Program Options and Design Considerations IPRCC-IFPRI International Conference POVERTY REDUCTION STRATEGY IN THE NEW MILLENNIUM Emerging Issues, Experiences and Lessons 23–24 May 2006, Beijing, China. Dr. Michelle Adato

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Dr. Michelle Adato Food Consumption and Nutrition Division IFPRI

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  1. Safety Nets and Social Protection: Program Options and Design ConsiderationsIPRCC-IFPRI International ConferencePOVERTY REDUCTION STRATEGY IN THE NEW MILLENNIUMEmerging Issues, Experiences and Lessons23–24 May 2006, Beijing, China Dr. Michelle Adato Food Consumption and Nutrition Division IFPRI

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

  3. 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

  4. 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

  5. Why Safety Nets? (continued) • Promote growth • Temporary shocks => long-term consequences • Human capital investment => productivity =>growth • Reduced expenditures on social problems • Political stability • Ethics

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. In-kind Transfers (continued) • School feeding • Meals or snacks • Direct feeding • Maternal and Child Health & Nutrition • Combines services with take-home food rations

  13. Program options 5: Micronutrient strategies • Supplementation • Fortification of food • Dietary diversity and combinations

  14. 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

  15. 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

  16. 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

  17. 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!

  18. 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?

  19. 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

  20. 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

  21. 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

  22. 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)

  23. 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

  24. 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%)

  25. 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?

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