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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  • Africa – large non conditional; Asia a bit of both; LA: widespread CCTs
  • End of a widespread belief that economic growth would generate sustainable poverty reduction in the short term
  • End of a widespread belief that economic growth would generate sustainable poverty reduction in the short term
  • 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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