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Social Protection & Safety Nets

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Social Protection & Safety Nets

  1. 1. Social Protection & Safety Nets: Global Experience June 28, 2007 E. Allyn Moushey USAID/EGAT Office of Poverty Reduction
  2. 2. What is Social Protection supposed to achieve? <ul><li>Goals include: </li></ul><ul><li>-increase school attendance </li></ul><ul><li>-improve health status </li></ul><ul><li>-increase human capacity for both learning and economic activity </li></ul><ul><li>-encourage higher risk economic choices, leading to greater income </li></ul><ul><li>-improve social stability </li></ul><ul><li>-smooth consumption during economic downturns </li></ul><ul><li>-invest in future human capital </li></ul><ul><li>-prevent destitution </li></ul><ul><li>-better management of idiosyncratic and covariant risks/shocks </li></ul><ul><li>-improve care for OVCs </li></ul><ul><li>-improve adult work opportunities </li></ul><ul><li>-decrease losses from natural disaster </li></ul><ul><li>-educate citizens re: their rights & options </li></ul><ul><li>-empowerment of women </li></ul><ul><li>-decrease income inequality </li></ul><ul><li>-build household assets </li></ul>EVERYTHING UNDER THE SUN
  3. 3. What is Social Protection? <ul><li>A system of public interventions that seeks to enable poor and vulnerable households to increase their ability to manage risk; thereby allowing them to contribute to, participate in, and benefit from economic growth. </li></ul>
  4. 4. What about Informal SP? <ul><li>Wide range of informal methods exist to manage risk (ex. Funeral societies, etc) </li></ul><ul><li>Most, but not all are positive (ex. Pulling children out of school) </li></ul><ul><li>Some entail merely poor-to-poor transfers </li></ul><ul><li>May not stand up to a major shock </li></ul><ul><li>Policy should seek to enhance and not replace informal interventions </li></ul>
  5. 5. Evolution of Social Protection <ul><li>Post-colonial era – Countries left with social sectors (health, ed, pensions, etc) designed by others </li></ul><ul><li>Structural Adjustment – Reorganization & diversion of funds away from public sector and programs </li></ul><ul><ul><li>WB piloted social funds, intended to temporary alleviate shocks from adjustment – mixed results </li></ul></ul><ul><li>Rapid Economic Growth – Particularly in Asia & a few Latin American countries </li></ul><ul><ul><li>Poor households benefited disproportionately (or not at all) </li></ul></ul><ul><ul><li>Asian financial crisis – overwhelmed informal methods of support </li></ul></ul><ul><li>Since late 90’s – Resurgence of interest, political support, and donor funding for new models of SP appropriate for developing countries </li></ul>
  6. 6. Risk & Vulnerability <ul><li>Risk – Type, frequency, severity, and populations affected vary greatly </li></ul><ul><li>Vulnerability – The level of susceptibility that a HH has to a particular risk (i.e. their ability to handle shocks) </li></ul><ul><li>Social Risk Management – World Bank </li></ul><ul><li>If we can increase HH ability to manage risk, and reduce their vulnerability to shocks they will: </li></ul><ul><ul><ul><li>Pursue riskier, & more profitable economic choices </li></ul></ul></ul><ul><ul><ul><li>Experience fewer negative and long-term consequences from each respective shock </li></ul></ul></ul><ul><ul><ul><li>Future oriented perspective (ex-poste & ex-ante) </li></ul></ul></ul>
  7. 7. SP Taxonomy Social Insurance Social Assistance -Unemployment -Weather/Livestock Index-based -Health -Old Age Pensions -Unconditional Cash Transfers -Conditional Cash Transfers -School Feeding -Matched Savings -Child Benefits -Other in-kind transfers Labor-based Interventions -Public Works -Minimum Wage legislation -Assets/Livelihood training and transfers All these interventions can be simultaneously protective, preventative, & promotive; depending on how they assist households to manage risk
  8. 8. Regional Trends <ul><li>Africa – trending towards social insurance interventions to deal with OVC challenge, some cash transfers </li></ul><ul><ul><li>Ex. Pensions in Namibia, Lesotho, S.Africa </li></ul></ul><ul><li>Latin America & Caribbean – widespread use of conditional cash transfers (13 countries) </li></ul><ul><li>Asia – Widely varied but many labor-based </li></ul><ul><li>Europe & Eurasia – Focus has been on building down large, universal programs into targeted, means-tested ones. </li></ul>
  9. 9. Mexico - Oportunidades <ul><li>Began in 1997 as “Progresa” – renamed in 2002 & expanded to urban areas </li></ul><ul><li>Funded by IADB, World Bank, & GOM, currently $2.8B annually </li></ul><ul><li>Reached 4.5 Million families in 2006 </li></ul><ul><li>Method: After families are identified through a process of geographical & community targeting, households receive conditional cash transfers (also school materials) from the government. </li></ul><ul><ul><li>Families must guarantee that children attend school 85% and receive basic health care attention </li></ul></ul><ul><li>Results: 70% of households show improved nutrition </li></ul><ul><ul><li>12% reduction in incidence of illness among children below 5 </li></ul></ul><ul><ul><li>increase in child weight </li></ul></ul><ul><ul><li>improved adult health status, 16% fewer days with difficulty from illness </li></ul></ul><ul><ul><li>Improved girls’ school enrollment </li></ul></ul>
  10. 10. Zambia – Unconditional Cash Transfers <ul><li>Pilot began in 2004 in small district, Kalomo, with roughly 1,000 beneficiaries </li></ul><ul><li>Method: Government-run implementation </li></ul><ul><ul><li>Poorest 10% of families receive small cash benefit worth around $13 US per month, unconditional </li></ul></ul><ul><li>Results: </li></ul><ul><ul><li>Increased food consumption, asset investment, savings. </li></ul></ul><ul><ul><li>Also showed improved child nutrition and decreased school absenteeism </li></ul></ul><ul><li>Current plans are to continue expanding the program nationwide (estimated cost $20M) </li></ul><ul><ul><li>– similar models are now planned for Malawi & Kenya. </li></ul></ul>
  11. 11. Uganda – Child Development Accounts <ul><li>Pilot study funded by the National Institutes of Health, USG in 2004. The program is small pilot, roughly 300 Beneficiaries. The goal is to improve children’s educational outcomes </li></ul><ul><li>Method: OVCs receive care plus access to a savings account </li></ul><ul><ul><li>Savings from OVC & their families are matched 2:1 if they are used to either pay for a child’s post-primary education or invest in a family income generating activity (microenterprise) </li></ul></ul><ul><li>Results: US$50.52 saved per participant in a 6-months period or US$8.42 per family in average monthly deposit. With a match this = US$25.26 per month </li></ul><ul><li>-Initial results show improvements in future plans for education, </li></ul><ul><li>household well-being (less concern for children’s future), improved attendance </li></ul><ul><li>Also renewed evidence that poor HH can & do save if given access </li></ul><ul><li>Program still VERY new, long term results unclear </li></ul><ul><li>Contact Dr. Ssewamala [email_address] for more information </li></ul>
  12. 12. Chile – Solidario/Puente <ul><li>Solidario is the basket of social assistance programs available – Puente began in 2002 as a pilot within Solidario </li></ul><ul><li>Program targets the remaining “hard core” poor </li></ul><ul><li>Method: Qualified families get 2 years of intensive assistance (Puente) & planning from a social worker, as well as a cash transfer </li></ul><ul><ul><li>Families sign a family contract, jointly designed by worker & the household </li></ul></ul><ul><ul><li>Graduation defined by meeting 53 “social rights” or criteria </li></ul></ul><ul><ul><li>Families then receive 3 more years of assistance via Solidario </li></ul></ul><ul><ul><li>-Regular community meetings held for families to provide feedback to administrators on the quality of services they receive, proceedings made public </li></ul></ul><ul><li>Results: Families report feeling more confident, having improved well-being, income, etc. </li></ul><ul><ul><li>70% average graduation rate (some communities reached 90+% </li></ul></ul><ul><ul><li>Cost per family for the 2 years of Puente = $436.00 </li></ul></ul>
  13. 13. Ethiopia – PSNP <ul><li>National Productive Safety Net Programme – joint effort by 6 donors & GOE, began 2004 </li></ul><ul><li>USAID contributes $150M of the total $380M program cost annually </li></ul><ul><ul><li>Program reaches 7.2M beneficiaries, plans to expand into pastoralist areas in 2007 </li></ul></ul><ul><ul><li>Implementation done jointly by GOE and NGOs, including WFP </li></ul></ul><ul><ul><li>Mainly public works – community chooses to receive cash or food as payment (predictable transfers) </li></ul></ul><ul><ul><li>USAID famine funds supported livelihoods activities, funds expiring </li></ul></ul><ul><li>PSNP has proven its ability to stabilize household assets </li></ul><ul><li>Strong pressure to fully “graduate” beneficiaries & demonstrate results </li></ul>
  14. 14. Bangladesh - IGVGD <ul><li>Joint effort by GOB, BRAC, WFP – began as small pilot </li></ul><ul><li>Method: Identified group of women who were too poor for traditional microfinance </li></ul><ul><ul><li>Free grain for 18 months in addition to training, followed by access to small savings and gradual participation in credit </li></ul></ul><ul><ul><li>Participants select the type of training they want from a list of options </li></ul></ul><ul><li>Results: Over 1M beneficiaries since 1985 </li></ul><ul><ul><li>2/3 graduated into permanent food security </li></ul></ul><ul><ul><li>Demonstrates the importance of sequencing assistance and using a value chain approach in small business development </li></ul></ul><ul><ul><li>Not a panacea, & significant risks still remain for graduates </li></ul></ul><ul><li>Cost: $135 per client (majority food costs) </li></ul>
  15. 15. Lesotho <ul><li>Launched in 2004 - National social pension for the elderly, above the age of 70 (60,000 beneficiaries) </li></ul><ul><li>Method: Simple universal transfer at post offices </li></ul><ul><ul><li>Photo ID, simple age indicator, no means testing </li></ul></ul><ul><ul><li>$21 USD per month </li></ul></ul><ul><ul><li>State financed, 2.4% of government budget </li></ul></ul><ul><li>Results: </li></ul><ul><ul><li>Families report greater autonomy for elderly </li></ul></ul><ul><ul><li>Most beneficiaries spent the transfer on children’s school expenses and investment in household economic pursuits </li></ul></ul>
  16. 16. Affordability & Cost <ul><li>Modelling exercise by ILO (2005): </li></ul><ul><ul><li>National unconditional cash transfer for poorest 10% = </li></ul></ul><ul><ul><ul><li>between 0.15 and 0.30% of GDP for Burkina, Cameroon, Guinea, & Senegal </li></ul></ul></ul><ul><ul><ul><li>0.7% in Ethiopia and Tanzania, & 0.5% in Kenya </li></ul></ul></ul><ul><ul><ul><li>Would cost under 3% of government expenditures from national budget in all countries except Tanzania </li></ul></ul></ul><ul><ul><ul><li>Equals less than 5% of aid that these countries already receive. </li></ul></ul></ul><ul><li>Universal pension programs shown to cost between 0.2 and 2% of GDP </li></ul><ul><li>Increased targeting, conditionality, & means testing = increased administrative costs </li></ul><ul><li>Long term sustainability linked to effective fiscal policy </li></ul><ul><ul><li>Proposed fuel levy in Malawi to fund national SP </li></ul></ul>
  17. 17. Lessons Learned <ul><li>Administrative capacity in government ministries remains low and projects are often uncoordinated </li></ul><ul><li>NGOs play an important implementation role </li></ul><ul><li>Political interests must be taken into account </li></ul><ul><li>Transfers CAN be effectively & safely delivered in distant rural areas </li></ul><ul><li>Even unconditional transfers are re-invested in families and households, and if guaranteed & predictable can help HH manage risk </li></ul><ul><li>SP policymakers need to first analyze and identify the problem they wish to address, and then design the intervention </li></ul><ul><li>Front-line service delivery professionals require meaningful support & respect </li></ul><ul><li>Effective public information campaigns are essential </li></ul>
  18. 18. Challenges ahead <ul><li>Continued education on the economic and other benefits of SP </li></ul><ul><ul><li>Public expenditures on SP can be seen as INVESTMENTS rather than lost funds </li></ul></ul><ul><li>More impact evaluation data needed </li></ul><ul><li>Donors must work harder to keep funding predictable and coordinated </li></ul><ul><li>Improved focus on building assets rather than just consumption replacement </li></ul><ul><li>Informational needs of ministries/agencies </li></ul><ul><li>Graduation – what do we mean, and how do we achieve it? </li></ul><ul><li>Improved sharing of promising practices </li></ul>
  19. 19. Future Resources <ul><li>www.povertyfrontiers.org </li></ul><ul><li>www.microlinks.org </li></ul><ul><li>World Bank – Social Risk Management </li></ul><ul><li>Asia Development Bank – SP Index </li></ul><ul><li>www.wahenga.net – SP Inventories </li></ul><ul><li>www.undp-povertycentre.org – International Poverty Centre, UN </li></ul><ul><li>Social Assistance in Low-income Countries Database </li></ul><ul><ul><li>http://www.chronicpoverty.org/pdfs/SocialAssistanceDatabase2006%20Version2%20310306.pdf </li></ul></ul>
  20. 20. Questions/Comments? <ul><li>THANK YOU! </li></ul>

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