dr. michelle adato food consumption and nutrition division ifpri
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Safety Nets and Social Safety Nets and Social Protection: Protection:
Program Options and Design Program Options and Design ConsiderationsConsiderations
IPRCC-IFPRI International ConferenceIPRCC-IFPRI International ConferencePOVERTY REDUCTION STRATEGY IN POVERTY REDUCTION STRATEGY IN
THE NEW MILLENNIUMTHE NEW MILLENNIUMEmerging Issues, Experiences and LessonsEmerging Issues, Experiences and Lessons
23–24 May 2006, Beijing, China23–24 May 2006, Beijing, China
Dr. Michelle AdatoDr. Michelle Adato
Food Consumption and Nutrition DivisionFood Consumption and Nutrition Division
IFPRIIFPRI
Outline of PresentationOutline of Presentation
Key concepts Key concepts Why safety nets?Why safety nets? Program optionsProgram options Considerations in program choice and Considerations in program choice and
designdesign Information gaps and areas for Information gaps and areas for
researchresearch
Key concepts: Safety nets and Key concepts: Safety nets and
social protectionsocial protection
Nets, ropes, and laddersNets, ropes, and ladders Social assistance, social insurance Social assistance, social insurance Protective (relief); preventive (avert Protective (relief); preventive (avert
deprivation); promotional (enhance deprivation); promotional (enhance incomes & capabilities)incomes & capabilities)
Family, community, employer, NGO, Family, community, employer, NGO, statestate
Why public safety nets?Why public safety nets? Erosion of private safety nets (family, community, landlord, Erosion of private safety nets (family, community, landlord,
employer)employer) Economic change & changing social structureEconomic change & changing social structure Shocks: repeated, multiple & affecting manyShocks: repeated, multiple & affecting many
Climate, illness, conflictClimate, illness, conflict Reduction of formal employmentReduction of formal employment
Reduce impact of shocks and new trendsReduce impact of shocks and new trends Climate, economy, conflictClimate, economy, conflict
Protect people who suffer from chronic poverty or vulnerability Protect people who suffer from chronic poverty or vulnerability due to due to Economic conditionsEconomic conditions Natural resource endowmentsNatural resource endowments AgeAge DisabilityDisability DiscriminationDiscrimination
Why Safety Nets? Why Safety Nets? (continued)(continued)
Promote growthPromote growthTemporary shocks => long-term Temporary shocks => long-term
consequencesconsequencesHuman capital investment => Human capital investment =>
productivity =>growthproductivity =>growthReduced expenditures on social Reduced expenditures on social
problemsproblems Political stabilityPolitical stability Ethics Ethics
Short-term buffer or long-Short-term buffer or long-term development?term development?
Immediate income or food transferImmediate income or food transfer Investment in human capitalInvestment in human capital
Health, nutrition, education, skillsHealth, nutrition, education, skills Investment in productive activitiesInvestment in productive activities
Productive InfrastructureProductive InfrastructureLand or environmental improvementLand or environmental improvementAgricultureAgricultureSmall enterprisesSmall enterprises
Investment in careInvestment in careFor children; ill peopleFor children; ill people
Program options 1: InsuranceProgram options 1: Insurance
Types:Types:Health; unemployment; Injury/disability; life; Health; unemployment; Injury/disability; life;
old-age; assetsold-age; assets Life cycle or event-triggeredLife cycle or event-triggered Allocation of contributionsAllocation of contributions
From government, private sector, From government, private sector, beneficiariesbeneficiaries
Informal sectorInformal sector
Program options 2: Price Program options 2: Price subsidies and Voucherssubsidies and Vouchers
Price subsidiesPrice subsidiesFood, utilities, housing, servicesFood, utilities, housing, servicesOptions: targeted; rationed; Options: targeted; rationed;
seasonal seasonal Food stamps or vouchersFood stamps or vouchers School vouchers or scholarshipsSchool vouchers or scholarships
Program Options 3: Cash Program Options 3: Cash TransfersTransfers
UnconditionalUnconditional Direct food or cash transfer as basic safety net; no Direct food or cash transfer as basic safety net; no
obligationsobligations ConditionalConditional
E.g. on participation in services: usually health, E.g. on participation in services: usually health, nutrition and educationnutrition and education
Can be designed to achieve varied and Can be designed to achieve varied and integrated objectives, e.g. Maternal and Child integrated objectives, e.g. Maternal and Child Health, Early Childhood DevelopmentHealth, Early Childhood Development
Often includes adult educationOften includes adult education Can have work obligationsCan have work obligations Usually requires upgrading of services and Usually requires upgrading of services and
infrastructureinfrastructure
Cash Transfers (continued)Cash Transfers (continued)
Considerations in conditioningConsiderations in conditioningWhat is the problem?What is the problem?
Demand or supply constraints?Demand or supply constraints? Need for incentivesNeed for incentives Condition on what?Condition on what?
Public attitudes toward social Public attitudes toward social assistanceassistance
Labor market and disincentivesLabor market and disincentivesUrgency of social assistanceUrgency of social assistanceBarriers to participation in servicesBarriers to participation in servicesCostsCosts
Program options 4: In-kind Program options 4: In-kind transferstransfers
Food distributionFood distributionUnconditionalUnconditional
Emergencies, conflict, severe povertyEmergencies, conflict, severe poverty
ConditionalConditional on training in income generating activities, on training in income generating activities,
nutrition, literacy, numeracy, savings accounts; nutrition, literacy, numeracy, savings accounts; on school attendance; on workon school attendance; on work
In-kind Transfers (continued)In-kind Transfers (continued)
School feedingSchool feedingMeals or snacksMeals or snacks
Direct feedingDirect feeding Maternal and Child Health & NutritionMaternal and Child Health & Nutrition
Combines services with take-home food Combines services with take-home food rationsrations
Program options 5: Program options 5: Micronutrient strategiesMicronutrient strategies
SupplementationSupplementation Fortification of foodFortification of food Dietary diversity and combinationsDietary diversity and combinations
Program options 6: Program options 6: Productive activitiesProductive activities
Support for agricultureSupport for agriculture Package of seeds, inputs, credit, trainingPackage of seeds, inputs, credit, training
Public worksPublic works Transfer (cash or food?)Transfer (cash or food?) Productive infrastructure (cost-effectiveness?)Productive infrastructure (cost-effectiveness?) Skills training (current income & second round Skills training (current income & second round
effects)effects) Considerations: gender, seasonality, labor marketsConsiderations: gender, seasonality, labor markets
MicrofinanceMicrofinance Role of public and private sectorsRole of public and private sectors Individual or group-basedIndividual or group-based Usually cash but can include in-kind loansUsually cash but can include in-kind loans
Considerations in program choice & Considerations in program choice & design 1: Objectives & Capacitiesdesign 1: Objectives & Capacities
Priority problems and objectivesPriority problems and objectives E.g. income poverty; malnutrition (type?); education deficits (for E.g. income poverty; malnutrition (type?); education deficits (for
whom?) whom?) Ex-ante protection (insurance) or ex-post remedy (relief or reversal of Ex-ante protection (insurance) or ex-post remedy (relief or reversal of
trend)?trend)? Short-term or continuous?Short-term or continuous?
Budgets Budgets Time horizon of problemTime horizon of problem
Service availability or potential for increaseService availability or potential for increase Administrative complexity and capacityAdministrative complexity and capacity
Technical; information systems; governanceTechnical; information systems; governance Centralized, decentralized or mixed? Centralized, decentralized or mixed?
FinancingFinancing Design and implementationDesign and implementation Role of community participation in targeting, oversight, implementationRole of community participation in targeting, oversight, implementation Comparative advantages in capacities and knowledgeComparative advantages in capacities and knowledge
Considerations 2: TargetingConsiderations 2: Targeting TargetingTargeting
What target groups prioritized and why? Life cycle approachWhat target groups prioritized and why? Life cycle approach Conceptual basis for targetingConceptual basis for targeting
Saves budgetary resources, and avoids more taxationSaves budgetary resources, and avoids more taxation Maximizing welfare impact, equity, fairnessMaximizing welfare impact, equity, fairness Political supportPolitical support
Mechanisms for targetingMechanisms for targeting Geographic (marginality indexes)Geographic (marginality indexes) Individual/household survey (e.g. income; consumption; HH Individual/household survey (e.g. income; consumption; HH
composition; education; assets) –collected at home or composition; education; assets) –collected at home or centercenter
Categorical or demographic targeting Categorical or demographic targeting Self-targetingSelf-targeting Community-based targetingCommunity-based targeting Costs?Costs?
Errors of exclusion and inclusionErrors of exclusion and inclusion Measurement errorsMeasurement errors PoliticsPolitics Equality and social relationsEquality and social relations Appeals processAppeals process
Targeting: Some general findingsTargeting: Some general findings Out of 122 antipoverty interventions in 47 Out of 122 antipoverty interventions in 47
countries (Coady, Grosh and Hoddinott 2004)countries (Coady, Grosh and Hoddinott 2004) Median program transfers 25% more to the poor Median program transfers 25% more to the poor
than universal or random allocationthan universal or random allocation 25% of programs delivered less to the poor than 25% of programs delivered less to the poor than
universal or randomuniversal or random Best performance: Means testing, geographic and Best performance: Means testing, geographic and
self-selection based on work requirementself-selection based on work requirement Progressive but more variable: Proxy-means test, Progressive but more variable: Proxy-means test,
community-based, and demographic-young childrencommunity-based, and demographic-young children More limited potential: Demographic-elderly, food More limited potential: Demographic-elderly, food
subsidies and community biddingsubsidies and community bidding However, no single best targeting methodHowever, no single best targeting method
Only 20% of outcomes attributed to method choiceOnly 20% of outcomes attributed to method choice Implementation more important!Implementation more important!
Considerations 3: Costs and Considerations 3: Costs and FinancingFinancing
Cost effectiveness (in achieving Cost effectiveness (in achieving objectives)objectives)
FinancingFinancingWhat is the size of the budget?What is the size of the budget?Can it be increased? Economic and Can it be increased? Economic and
political considerationspolitical considerationsWho finances?Who finances?
Donor or treasury?Donor or treasury? Who has the resources?Who has the resources?
– Central, regional or local government?Central, regional or local government?– Public-private partnershipsPublic-private partnerships– Beneficiary contributionsBeneficiary contributions
Availability of in-kind resources? Availability of in-kind resources?
Considerations 4: Level of Considerations 4: Level of benefitsbenefits
Poverty levels and poverty linePoverty levels and poverty line Cost of livingCost of living # of HH members# of HH members Market wage ratesMarket wage rates Opportunity costs of participation in Opportunity costs of participation in
servicesservices BudgetBudget CoverageCoverage
ConsiderationsConsiderations 5: Economic and Social 5: Economic and Social factorsfactors
Functionality of marketsFunctionality of markets Structure of economyStructure of economy
Size of formal & informal sectorsSize of formal & informal sectors MigrationMigration Labor market conditionsLabor market conditions
Labor surplus or shortagesLabor surplus or shortages Will transfers reduce incentives for labor market Will transfers reduce incentives for labor market
participation?participation? Effect on wage rates?Effect on wage rates? Design features that reduce disincentives (size of transfer, Design features that reduce disincentives (size of transfer,
conditioning)conditioning) Household structure and social relations, Household structure and social relations,
including gender relationsincluding gender relations Cultural practicesCultural practices Depth of poverty, skills, individual capacities Depth of poverty, skills, individual capacities
E.g. microfinance vs. HC approachE.g. microfinance vs. HC approach
Considerations 6: Considerations 6: GovernanceGovernance
Legal frameworkLegal framework Discretionary or entitlement?Discretionary or entitlement?
IntegrityIntegrity IncentivesIncentives ConflictConflict
Special needsSpecial needs Capacities and interest of private sector and Capacities and interest of private sector and
NGOs NGOs Potential for state partnershipsPotential for state partnerships
Considerations 7: OtherConsiderations 7: Other
Health and illnessHealth and illness HIV/AIDS, otherHIV/AIDS, other
Natural disastersNatural disasters Response and anticipationResponse and anticipation
Coordination and synergies between Coordination and synergies between programsprograms E.g. Geographical; seasonalityE.g. Geographical; seasonality
Complementarity of servicesComplementarity of services E.g. Food distribution with skills training (VLDP, E.g. Food distribution with skills training (VLDP,
Bangladesh); day care and Early Childhood Bangladesh); day care and Early Childhood Development (ICDS India); public works and home-Development (ICDS India); public works and home-based care of ECD (South Africa)based care of ECD (South Africa)
Considerations 7: EvaluationConsiderations 7: Evaluation
Why evaluate?Why evaluate?Effectiveness in achieving objectivesEffectiveness in achieving objectivesEfficiency of resource allocationEfficiency of resource allocation
How often?How often? How financed?How financed? Control groups?Control groups? What to evaluateWhat to evaluate
Changes in key indicators (quantitative)Changes in key indicators (quantitative)Changes in social dynamics (qualitative)Changes in social dynamics (qualitative)OperationsOperationsEffectiveness of behavior change Effectiveness of behavior change
componentscomponents
Food versus cash for schooling in Food versus cash for schooling in Bangladesh: Impact on school Bangladesh: Impact on school
enrollmentenrollment (A. Ahmed)(A. Ahmed)
Both FFE and PES Both FFE and PES encourage poor encourage poor families to enroll their families to enroll their children in primary children in primary school. school.
The rate of increase in The rate of increase in enrollment was greater enrollment was greater for (FFE (18.7%) than for (FFE (18.7%) than for PES (13.7%)for PES (13.7%)
18.7
13.7
0
2
4
6
8
10
12
14
16
18
20
FFE (food) PES (cash)
% C
ha
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e in
en
rollm
en
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Information gaps & areas for Information gaps & areas for researchresearch
Comparative research on programs: costs, Comparative research on programs: costs, impacts, growth linkages, trade-offsimpacts, growth linkages, trade-offs
How to better integrate social protection and How to better integrate social protection and livelihoods activitieslivelihoods activities– Where is the line? Where is the line? – Where is the transition? Where is the transition? – Innovations in integrationInnovations in integration
Types of activitiesTypes of activities Transitions to labor marketTransitions to labor market
– Are there trade-offs?Are there trade-offs?– What is the right mix? What is the right mix?
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