BWPI Executive Director David Hulme keynote address, 'Can social protection contribute to growth in sub-Saharan Africa?’, to Ministry of Foreign Affairs of the Netherlands and the Knowledge Platform (Development Policies) Scoping Conference on Social Inclusion and Sustainable Growth in Africa, The Hague

1. Can Social Protection Contribute to Growth in Sub-Saharan Africa?
David Hulme
Brooks World Poverty Institute (BWPI) and
Effective States and Inclusive Development Research Centre (ESID)
University of Manchester
www.manchester.ac.uk/bwpi
www.effective-states.org

2. Outline
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Introduction and diversity of SP programmes
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Rise of social assistance/transfers in SSA
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Why ST and Why Growth? A Framework
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Social transfers and growth-mediating processes
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Social transfers and productive capacity outcomes
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Conclusions…and concerns about donors

3. Introduction
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Social Protection covers social assistance, social insurance and labour market regulation
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Focus here is on social assistance and growth – call these social transfers
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Do not neglect the poverty reduction impacts nor needs of labour-scarce households!
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Unfortunately a key finding is that data and evidence are very limited on SSA-Barrientos 2012
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But, we live in an era of exaggerated belief in availability of evidence – SP and growth in UK?

4. Diversity of ST Programmes
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Many different designs – national ‘histories’
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Pure income transfers eg South Africa OAG
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Income transfers with basic services or work – eg Mexico Oportunidades, Ethiopia PSNP
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Integrated poverty reduction programmes – eg Chile Solidario (transfers and capabilities), Bangladesh’s CFPR-TUP (asset transfers plus)

5. Social Transfers in SSA 1
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SP expanding in SSA (‘123 programmes’) but not on the scale of Asia and Latin America
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As in rest of world MICs have been where take-off has occurred (especially South Africa)
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Three original roots
1.
Indigenous/informal social protection
2.
Apartheid South Africa
3.
Emergency/relief/food aid programmes

6. Social Transfers in SSA 2
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Recent expansion based on:
1.
Donor recognition of lack of impact of ‘relief’ programmes and interest in transferring Latin American experience to SSA
2.
Expansion of ST in South Africa (OAGs and CSGs) and policy transfers to neighbours
3.
Ethiopian government's attempt to create a developmental state

7. Why SP and Why Growth?
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STs have a long history – Elizabethan Poor Laws – and recent policy focus for MICs, LICs and donors
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Evidence that STs and improvements in basic services can rapidly reduce poverty headcounts
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Permanent exit from poverty needs sustained household income growth – so, ‘growth’, ‘graduation’ and ‘socio-economic mobility’
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Increasing numbers of vulnerable non-poor (US$2-10 per day) in MICs

8. A Framework for Examining the Impacts of SP on Growth
(Barrientos, 2012)

9. STs and Credit Constraints
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Theoretical and empirical evidence – poor people cannot access loans so productivity constrained. STs permit savings, investment and as collateral
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Evidence - Bono Dignidad (Bolivia), BRAC’s CFPR- TUP (Bangladesh). Works best when credit constraint is targeted
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SSA – PSNP increased borrowing for agriculture, and qualitative evidence for South Africa’s OAGs and CSGs

10. Improving Consumption and Asset Security (quasi-insurance)
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Insecurity limits investment by poor households so (i) low risk/low return crops etc (ii) need for liquid assets not most productive
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STs improve capacity to deal with shocks
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A substitute for insurance markets
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STs rarely directly target this – exception of India’s NREGS…mixed evidence of impact
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Expansion of STs in 2008 crisis – a policy belief

11. Improving Household Resource Allocation
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Possibility of STs changing intra-household decisions – especially on gender relations
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Especially if payments go to women
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Evidence from Oportunidades of greater spending on children – human development impacts (later)
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Could there be effects on migration?
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But, such limited empirical evidence

12. Asset Protection and Accumulation
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Evidence of positive impacts more detailed
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Productive investment – Oportunidades, 12% transfers invested in productive assets; PSNP, more credit and increased use fertilizer
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Human development – HD-focussed STs large improvements in school attendance(LA and B’desh) and use of health services (LA). Also pure STs positive impacts (OAGs SA and Brazil)
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Housing – neglected but some evidence

13. Labour Supply Effects
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Orthodox economics/welfare dependency predicts negative impacts
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Scant evidence of STs reducing labour effort - SA studies flawed by neglect of migration
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Positive experiences of graduation programmes
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Programmes can be designed to target labour market – reduced child labour (Bangladesh), positive results (complex). Reduced OAP labour?

14. Local Economy Effects
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Infrastructure - Public works programmes (PWPs) mixed results – Maharashtra positive, NREGS mixed, SSA limited and depends on programme design (McCord 2012)
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Stronger Demand/Economic Vibrancy – Oportunidades and SA OAG/CSG reports
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Demonstration Effects – health care practices (Oportunidades)…needs research

15. Summary
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Limited evidence base especially for SSA
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Suggests that effects of STs on growth of:
1.
Household income - most likely to be positive and very unlikely to be negative
2.
Local economy – positive but weak
3.
National economy – minor, as you would expect (but if you had a real ‘pro-poor growth’ measure it would be positive)

16. Policy Findings and Issues 1
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Given strong evidence of poverty reduction effects of well-designed ST programmes - STs should be promoted
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The available evidence suggests small but positive impact of STs on household income growth (and total lack of negative evidence)
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So , key issue about STs and growth are about effective design – not ‘is it good or bad’!

17. Policy Findings and Issues 2
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Key policy issues are:
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Design – regular and reliable; duration (not just emergency but with planned exit/graduation); level of transfer; CTs or CCTs; for SSA prioritise human development package; getting education/health services working; employment - pro-poor growth/macroeconomics, asset transfers/skills
2.
Implementation – institutional strengthening
3.
Urbanisation and STs – not ignoring urban poor
4.
National ownership and role of donors – supporting evolution of national welfare regime not meeting aid targets. Right technics and right politics

18. Key Sources
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Barrientos, Armando (2012) ‘Social Transfers and Growth: What Do We Know? What Do We Need to Know?’, World Development 40(1), 11-20
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Garcia, Marito and Moore, Charity (2012) The Cash Dividend: The Rise of Cash Transfer Programs in Sub-Saharan Africa, World Bank, Washington DC
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Hanlon, Joe, Barrientos, Armando and Hulme, David (2010) Just Give Money to the Poor: The Development Revolution from the Global South, Kumarian Press, Hartford, CT.
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McCord, Anna (2012) Public Works and Social protection in sub- Saharan Africa, Cape Town, UCT Press
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Nino-Zarazua, Miguel, Barrientos, A, Hulme, D and S Hickey(2012) ‘Social Protection in sub-Saharan Africa: getting the politics right’, World Development, 40(1), 163-176