social safety nets and social protection: an international perspective
DESCRIPTION
Marie Ruel, Director Poverty, Health and Nutrition Division (PHND) International Food Policy Research InstituteTRANSCRIPT
INTERNATIONAL FOODPOLICY RESEARCH INSTITUTEsustainable solutions for ending hunger and poverty
Social Safety Nets and Social Protection:
An international Perspective
Marie Ruel,Director, Poverty, Health and Nutrition Division
International Food Policy Research Institute
June 2, 2010 Brasilia
Why Social Protection?
Economic growth alone is not enough to cut poverty/hunger rapidly and with equity
Particularly true where: High inequality Bad governance
What is needed: Pro-poor growth + More investment in social protection Implemented earlier Implemented at larger scale
Overview
What is the role of social protection? What are the lessons learned from international
experience with conditional cash transfer (CCT) programs?
What is the evidence for growth enhancing effects of social safety nets?
What is Social Protection?
Secure basic consumption
Reduce fluctuations in consumption and avert asset reduction
Enable people to save, invest, and accumulate throughreduction in risk and income variation
Build, diversify, and enhance use of assets• Reduce access
constraints• Directly provide
or loan assets
• Build linkages with institutions
•Direct feeding•Subsidies
•Public works•Insurance (health,
asset)•Livelihoods programs•Credit and savings
•Maternal and Child Health and Nutrition•Child and adult
education/skills•Early childhood development
• Home-based care for the ill
Transform institutions and relationships• Economic• Political• Social
Protective Preventative Promotional Transformational
Conditional cash transfers
• Food or cash transfers
Adato & Hoddinott 2008
Social Protection & the Life Cycle
Pension
Public WorksIncome generation
School fee waivers & vouchersFood/Cash for schooling
Early Childhood Development
Matl & Child Health & Nutrition
Food, Cash Transfers
Elderly
Adults
School age
Pre-school
0-2 y old
Prenatal
SPPrograms& Policies
Conditional Cash Transfer Programs (CCTs)
Target cash transfers to poor households, often to woman within HH
Conditional on: Enrolling children in school Attending health & nutrition services
Some also fund supply side strengthening
Popular Policy Instrument
NY and DC
Examples from LA
Country % total population
% extreme poor
% GDP % social spending
Brazil (06) 22.7 >100 0.43 2.0
Mexico (06) 23.8 >100 0.44 4.3
Guatemala (08)
13.6 46.7 0.06 0.8
Honduras (06)
6.8 14.9 0.02 0.2
Nicaragua (06)
2.5 7.8 0.04 0.4
Brazil: 11 million households (46 million people)Mexico: 5 million households (25 million people)
What is so special about CCTs?
Attractive design (health-nutrition-education; and short+ long-term benefits)
Targeted, gender sensitive, participatory, multi-sectoral
They work: impacts on wide range of outcomes
Have been scaled up successfully
Impacts on Poverty Reduction
In Brazil, BF reduced: Poverty: 12%; severe poverty: 19% Inequality: 21% of the 4.7% ↓ in Gini index
(1995-2004)
In Mexico, PROGRESA reduced: Poverty: 8.2%; severe poverty: 34.5% Inequality: 21% of the 5% ↓ in Gini index
(Source: Soares et al. 2006-07)
Impacts on Education (Enrollment)
(Sources: Schultz 2001; Skoufias 2005; IFPRI 2003; Maluccio and Flores 2005; Filmer and Schady 2006; Ahmed 2006; Khandker, Pitt, and Fuwa 2003; Ahmed et al. 2007)
0
5
10
15
20
25
30
Change in e
nro
llm
ent
(perc
enta
ge p
oin
ts)
Primary School
Impacts on Health and Nutrition
(Sources: Skoufias 2005; Gertler 2000; Hoddinott forthcoming; IFPRI 2003; Maluccio
and Flores 2005)
-20
-10
0
10
20
30
40
50
60
70
Health visits Illness Growth monitoring Stunting
Ch
an
ge (
perc
en
tag
e
poin
ts Honduras
Mexico
Nicaragua
Colombia
Evidence of negative effects?
Labor force participation: No effect (Nicaragua, Mexico, Ecuador, Cambodia)
Positive effects in Brazil (4.3 pp in women)
Positive effects on reducing child labor Crowding out private transfers:
South Africa and Philippines (pension scheme ↓ children transfers)
No effect in China, Vietnam, Indonesia, Honduras, Nicaragua
Fertility: Mexico: no effect
The Verdict
CCTs have played important role in: Reducing poverty, inequality, food security Improving use of health, education services Empowering women
Much smaller impact on outcomes (school achievement, health, nutrition)
Effectiveness depends on: Design, implementation, supply side
response Contextual factors (institutional, political,
sociocultural, inter-sectoral coordination)
Social Safety Nets: Evidence of Growth Promoting Effects?
1) Creating Assets
Human assets E.g. Conditional Cash Transfers (promoting
education, health, nutrition of children) Physical assets:
E.g. Public Works in Asia ( improving infrastructure (e.g. roads, irrigation, schools, health clinics)
Financial assets: E.g. Bangladesh: compulsory savings imbedded in
transfer program E.g. Mexico: low income HH use 10% of transfers
for small investments
2) Protecting Assets
SSN can protect loss of assets following shocks (floods, drought, civil strife): Destroy assets (e.g. loss of livestock) Lead to asset sales Lead to lower investment in human capital
E.g. drought in Zimbabwe led to childhood stunting and reduced schooling
(impact:14% loss of lifetime earnings)
3) Allowing more effective use of resources + risk taking
Threat of shocks reduces risk-taking, innovation: E.g. India, Tanzania: risk aversion reduced
farm profits by 25-50%
SSN act as form of insurance: Motivates poor HH to take risks
Allows quicker recovery from shocks
Reduces permanent consequences
4) Facilitating structural policy reforms
Economic reforms that promote overall growth often incur costs of adjustment for some population segments
SSN nets can promote political acceptance of new policies by offsetting some of these costs (compensation)
E.g. Mexico introduced transfers to small farms when adopting freer trade (providing
cash for inputs and a form of insurance)
5) Reducing Inequality
Effective targeting helps get the transfers to the poor: Community targeting
Household targeting using income proxies or other targeting approaches
By reducing inequality, SSN can create conditions for growth to occur
What have we learned?
Major paradigm shift in past 10-20 years– Brazil leading the way: Economic growth alone cannot generate
sustainable poverty reduction SPP can improve livelihoods of the poor, lead to
asset building, savings and participation in economy Innovation in design, targeting, implementation
of SSN – new generation of programs Critical learning from rigorous evaluations
Still a lot to do
Careful selection of programs based on: Nature, severity of problem, context Capacity (administrative, operational); supply side Financial resources Ability and incentives for multi-sectoral work Political support
Need to improve on outcomes Need exit strategy – programs not made to be
permanent (Levy: if permanent you have failed) Need to analyze & evaluate social strategies