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Olena nizalova ppt
1. 1
Social Assistance System Modernization
and Participation of the Poor
Hanna Vakhitova, Olena Nizalova, Denys Nizalov
Kyiv School of Economics
GDN conference
June 2013, Manila
2. 2
Motivation: Post-communist countries and
poverty
1989, Communist regimes in Europe
9% of the World population
14% of the World land area
Poverty (less than $4 a day)
1989: 14 million people (out of 360)
1998: > 140 million people.
3. 3
Motivation: Importance of welfare system
“The last public policy instrument to prevent
extreme poverty” (Cerami, 2009)
Ukraine: 19% of all families; 13000 employees
Low effectiveness of poverty reduction programs
in transition countries (Verme, 2008, Moldova;
Van de Walle, 2004, Vietnam; Milanovic, 2000,
Latvia)
Amount of assistance (too high, too low)
Poor take-up (best performers - 36%)
Lack of capacity (Lokshin and Ravallion, 2000, Russia)
4. 4
Our question
Impact of the welfare system re-engineering on
three outcomes:
Share of applicants among the poor;
Share of recipients among the poor;
Share of recipients among the poor who
receive multiple types of assistance.
5. 5
Our contribution
Focus on the poor-oriented system
intervention
Look at particular activities
Include large set of controls
Account for non-randomness of Project
implementation
6. 6
Literature
Academic literature:
poverty spell (Okrasa, 1999a, 1999b, Poland)
probability of exit from poverty (Okrasa, 1999a, 1999b,
Poland; Ravallion et al., 1995, Hungary; Van de Walle,
2004, Vietnam)
protecting from poverty (Van de Walle, 2004, Vietnam;
Lokshin and Ravallion, 2000, Russian crisis)
Policy papers (WB, 2005, 2009):
Poor targeting, complicated application procedure, poor
employee motivation, inadequate service quality, clients’
dissatisfaction – factors that prevent take-up.
7. 77
2.5 mln families by the end of 2009 (19%)
Total annual expenditures = 17 bln UAH (310 mln USD) -
6.3% of the State Budget
MLSP, 27 regional and 754 local departments, 13,000
employees
15 national and a number of local social assistance
programs
6 major programs cover 97% of recipients
Brief description of the system
8. 88
Modernization of the System
System re-engineering started in 2005:
program based ►process based
Functional divisions (separation of the application admission, case
processing, and money transfer procedures)
Single Window/ ”one-stop shop”
Other administrative changes (appointments by phone, control over
transfer of cases , archive)
Renovation of offices
Modernization and improvement of the analytical
capacity of the local and regional departments
Computerization
Employee training
Unified software
Unified data-base
Information campaign
9. 9Project Impact on Household/ Population Behavior 9
Increase in productivity of
employees
Population awareness
about various types of
assistance
Population attitude towards
system of social assistance
Number of processed
applications
Activity:
Information
campaign
Poverty reduction
Number of
applications
Activity:
New computer
equipment
Activity:
Facilities
renovation
Activity:
Single application
Social assistance
system targeting
Application timeOpportunity to submit
single application for
several types of
assistance
Psychological discomfort
during the application
process
Readiness of applicants
for application process
Number of mistakes in
the assistance
assignment
Program Impact Model
10. 10
Project activities implementation
Treatment indicators
Year
Difference
2008 2009
Renovation of premises and office
equipmentA
0.0 0.287 0.287***
Computer hardware was purchased
during the last year B
0.111 0.006 -0.095***
Single application procedure B 0.761 0.851 0.09***
Informational campaignA 0.0 0.544 0.544***
Data: A – Administrative data; B – Employees Survey.
11. 11
Poverty-related outcomes
Project
outcomes
Year
Among
non-poor
Among
poor
Overall in the
population
Applied for social
assistance
2008 19.4% 30.6% 23.6%
2009 18.0% 33.3% 23.4%
Both years 18.7% 31.9% 23.5%
Receive any
social assistance
2008 18.6% 29.3% 22.5%
2009 17.0% 28.8% 21.1%
Both years 17.8% 29.1% 21.8%
Receive multiple
assistance
2008 6.0% 9.8% 7.4%
2009 4.6% 9.9% 6.5%
Both years 5.3% 9.8% 7.0%
12. 12
Methodology
Y – Project outcome (application or participation);
Z – Project activities vector;
P – Poverty indicator
Х – Household controls;
V – selection factors (district and office characteristics )
Т – time
i – individual
j – district
District-level clustering
jitjjtittititjtjtjit DVXTPPZZY 76543210
13. 13
Surveys: (Wave 1 - Fall 2008; Wave 2 - Fall 2009)
Households
Employees
Administrative data of MOL
Program implementation log (2005-2009)
Census of Social Assistance Departments (2005-2009)
General Statistics by State Statistics Committee
Data
18. 18
Adding controls: household + district
Applied for
social
assistance
Receive any
social
assistance
Receive
multiple
assistance
Renovation of premises and office equipment 0.248** 0.283*** 0.02
Modernization of computer networks -0.190* -0.181** -0.035
Single application procedure 0.084 0.117** 0.034
Informational campaign 0.054 0.045 0
Poor * Renovation -0.004 0.019 -0.023
Poor * Computer 0.501*** 0.537*** 0.279***
Poor * Single application 0.122** 0.123** 0.009
Poor * Informational campaign 0.022 0.003 -0.013
Poor -0.051 -0.071* 0.007
Pseudo R2 0.205 0.213 0.359
Observations 1,998 1,993 1,377
Probit marginal effect reported. *** p<0.01, ** p<0.05, * p<0.1.
19. 19
Final specification
(with household, district and office controls)
Applied for
social
assistance
Receive any
social
assistance
Receive
multiple
assistance
Renovation of premises and office equipment 0.262** 0.314** -0.028
Modernization of computer networks -0.208 -0.193* -0.01
Single application procedure 0.104* 0.146** 0.041*
Informational campaign 0.05 0.055 -0.031
Poor * Renovation -0.045 -0.022 -0.023*
Poor * Computer 0.430*** 0.470*** 0.205**
Poor * Single application 0.151** 0.147*** 0.014
Poor * Informational campaign -0.03 -0.047 -0.020*
Poor -0.043 -0.064 0.013
Pseudo R2 0.2 0.21 0.357
Observations 1,665 1,660 1,099
Probit marginal effect reported. *** p<0.01, ** p<0.05, * p<0.1.
20. 20
Social Assistance System re-engineering does
improve targeting of the system towards poor
and simplifies the application process:
Renovation of premises and purchase of new
office equipment increases both the
application rate and the participation rate of
the population in the system.
Conclusions
21. 21
Single Window Application Procedure
increases the participation rate of both non-
poor and poor, with the latter effect being
twice larger.
Single Window Application Procedure also
encourages application among the poor,
without increasing the system load among
non-target group.
Conclusions
22. 22
Purchase of Computers and Modernization of
Computer Networks discourages the
application and participation in the system
among the non-poor, while having the
opposite, and quite large in magnitude, effect
on the poor.
Informational campaign has no significant
impact on any of the studied outcomes.
Conclusions
