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Social Safety Nets and Social Protection: An International Perspective

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Marie Ruel, Director Poverty, Health and Nutrition Division (PHND)
International Food Policy Research Institute

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Social Safety Nets and Social Protection: An International Perspective

  1. 1. Social Safety Nets and Social Protection: An international Perspective<br />Marie Ruel,<br />Director, Poverty, Health and Nutrition Division<br />International Food Policy Research Institute <br />June 2, 2010<br /> Brasilia<br />
  2. 2. Why Social Protection?<br />Economicgrowthaloneis not enough to cutpoverty/hungerrapidly and withequity<br />Particularlytruewhere:<br /><ul><li>High inequality
  3. 3. Bad governance</li></ul>Whatisneeded: Pro-poorgrowth + <br /><ul><li>More investment in social protection
  4. 4. Implementedearlier
  5. 5. Implementedatlargerscale</li></li></ul><li>Overview<br />Whatis the role of social protection? <br />What are the lessonslearnedfrom international experiencewithconditional cash transfer (CCT) programs?<br />Whatis the evidence for growthenhancingeffects of social safety nets?<br />
  6. 6. What is Social Protection?<br />Protective Preventative Promotional Transformational<br />Enable people to save, invest, and accumulate through<br />reduction in risk and income variation<br />Secure basic consumption<br />Reduce fluctuations in consumption and avert asset reduction<br />Build, diversify, and enhance use of assets<br /><ul><li> Reduce access constraints
  7. 7. Directly provide or loan assets
  8. 8. Build linkages with institutions</li></ul>Transform institutions and relationships<br /><ul><li> Economic
  9. 9. Political
  10. 10. Social
  11. 11. Public works
  12. 12. Insurance (health, asset)
  13. 13. Food or cash transfers
  14. 14. Direct feeding
  15. 15. Subsidies
  16. 16. Livelihoods programs
  17. 17. Credit and savings</li></ul>Conditional cash transfers<br /><ul><li>Maternal and Child Health and Nutrition
  18. 18. Home-based care </li></ul>for the ill<br /><ul><li>Child and adult education/skills
  19. 19. Early childhood development</li></ul>Adato & Hoddinott 2008<br />
  20. 20. Social Protection & the Life Cycle<br />Pension<br />Public Works<br />Income generation<br />School fee waivers & vouchers<br />Food/Cash for schooling<br />Early Childhood Development<br />Matl & Child Health & Nutrition<br />Food, Cash Transfers<br />Elderly<br />Adults<br />SP<br />Programs<br />& Policies<br />School age<br />Pre-school<br />0-2 y old<br />Prenatal<br />
  21. 21. Conditional Cash Transfer Programs (CCTs)<br />Target cash transfers to poor households, often to woman within HH <br />Conditional on: <br /><ul><li> Enrolling children in school
  22. 22. Attending health & nutrition services </li></ul>Some also fund supply side strengthening<br />
  23. 23. Popular Policy Instrument<br /><ul><li>NY and DC</li></li></ul><li>Examples from LA<br />Brazil: 11 million households (46 million people)<br />Mexico: 5 million households (25 million people)<br />
  24. 24. Whatissospecial about CCTs?<br /><ul><li>Attractive design(health-nutrition-education; and short+ long-term benefits)
  25. 25. Targeted, gender sensitive, participatory, multi-sectoral
  26. 26. They work: impacts on wide range of outcomes
  27. 27. Have been scaled up successfully</li></li></ul><li>Impacts on PovertyReduction<br />In Brazil, BF reduced:<br /><ul><li>Poverty: 12%; severe poverty: 19%
  28. 28. Inequality: 21% of the 4.7% ↓ in Gini index (1995-2004)</li></ul>In Mexico, PROGRESA reduced:<br /><ul><li>Poverty: 8.2%; severe poverty: 34.5%
  29. 29. Inequality: 21% of the 5% ↓ in Giniindex</li></ul>(Source: Soares et al. 2006-07)<br />
  30. 30. Impacts on Education (Enrollment)<br />(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) <br />
  31. 31. Impacts on Health and Nutrition<br />(Sources: Skoufias 2005; Gertler 2000; Hoddinott forthcoming; IFPRI 2003; Maluccio and Flores 2005)<br />
  32. 32. Evidence of negative effects? <br /><ul><li>Labor force participation:
  33. 33. No effect (Nicaragua, Mexico, Ecuador, Cambodia)
  34. 34. Positive effects in Brazil (4.3 pp in women)
  35. 35. Positive effects on reducing child labor
  36. 36. Crowding out private transfers:
  37. 37. South Africa and Philippines (pension scheme ↓ children transfers)
  38. 38. No effect in China, Vietnam, Indonesia, Honduras, Nicaragua
  39. 39. Fertility:
  40. 40. Mexico: no effect</li></li></ul><li>The Verdict<br /><ul><li>CCTs have played important role in:
  41. 41. Reducing poverty, inequality, food security
  42. 42. Improving use of health, education services
  43. 43. Empowering women
  44. 44. Much smaller impact on outcomes (school achievement, health, nutrition)
  45. 45. Effectiveness depends on:
  46. 46. Design, implementation, supply side response
  47. 47. Contextual factors (institutional, political, sociocultural, inter-sectoral coordination)</li></li></ul><li>Social Safety Nets: Evidence of GrowthPromotingEffects? <br />
  48. 48. 1) CreatingAssets<br />Human assets<br /><ul><li>E.g.Conditional Cash Transfers (promoting education, health, nutrition of children)</li></ul>Physical assets:<br /><ul><li>E.g. Public Works in Asia ( improving infrastructure (e.g. roads, irrigation, schools, health clinics)</li></ul>Financial assets: <br /><ul><li>E.g. Bangladesh: compulsory savings imbedded in transfer program
  49. 49. E.g. Mexico: low income HH use 10% of transfers for small investments</li></li></ul><li>2) Protecting Assets<br />SSN can protect loss of assets following shocks (floods, drought, civil strife):<br /><ul><li>Destroy assets (e.g. loss of livestock)
  50. 50. Lead to asset sales
  51. 51. Lead to lower investment in human capital</li></ul>E.g. drought in Zimbabwe led to childhood stunting and reduced schooling (impact:14% loss of lifetime earnings)<br />
  52. 52. 3) Allowing more effective use of resources + risktaking<br />Threat of shocks reduces risk-taking, innovation:<br /><ul><li>E.g. India, Tanzania: risk aversion reduced farm profits by25-50%</li></ul>SSN act as form of insurance:<br /><ul><li>Motivates poor HH to take risks
  53. 53. Allows quicker recovery from shocks
  54. 54. Reduces permanent consequences</li></li></ul><li>4) Facilitating structural policyreforms<br />Economic reforms that promote overall growth often incur costs of adjustment for some population segments<br />SSN nets can promote political acceptance of new policies by offsetting some of these costs (compensation)<br />E.g. Mexico introduced transfers to small farms when adopting freer trade (providing cash for inputs and a form of insurance)<br />
  55. 55. 5) Reducing Inequality<br />Effective targeting helps get the transfers to the poor:<br /><ul><li>Community targeting
  56. 56. Household targeting using income proxies or other targeting approaches</li></ul> By reducing inequality, SSN can create conditions for growth to occur<br />
  57. 57. What have we learned? <br />Major paradigm shift in past 10-20 years– Brazil leading the way:<br /><ul><li>Economic growth alone cannot generate sustainable poverty reduction
  58. 58. SPP can improve livelihoods of the poor, lead to asset building, savings and participation in economy</li></ul>Innovation in design, targeting, implementation of SSN – new generation of programs<br />Critical learning from rigorous evaluations<br />
  59. 59. Still a lot to do<br />Careful selection of programs based on:<br /><ul><li>Nature, severity of problem, context
  60. 60. Capacity (administrative, operational); supply side
  61. 61. Financial resources
  62. 62. Ability and incentives for multi-sectoral work
  63. 63. Political support</li></ul>Need to improve on outcomes <br />Need exit strategy – programs not made to be permanent (Levy: if permanent you have failed)<br />Need to analyze & evaluate social strategies<br />

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