Antipoverty transfers and the post-2015 development agenda

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Antipoverty transfers and the post-2015 development agenda
Armando Barrientos, Brooks World Poverty Institute, the University of Manchester, UK
a.barrientos@manchester.ac.uk
Post-Graduate Conference 2014, School of Social and International Studies, University of Bradford, October 31st 2014

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http://www.post2015hlp.org/the-report/
Is a zero extreme poverty rate target for 2030 achievable? What is the potential contribution of antipoverty transfers?

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198119841987199019931996199920022005200820102015202020252030Global P0 Exc. China40.539.138.137.236.634.333.631.527.825.501020304050 Poverty headcount rate (%) Global Poverty at US$1.25 (%) WB data-0.4 pps per year-1.0 pps per yearambitiouspessimisticoptimistic

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Reasons to be cautious….
Stronger performance will be
required precisely in those regions
which have underperformed so far
Reaching zero targets will require unprecedented growth with redistribution
Table 2. Global poverty headcount projections for selected regions (millions)
Ravallion (2012)
Optimistic Scenario
Hillebrand (2012)
Market First Scenario
2015
2015
2050
Sub-Saharan Africa
397
395
205
South Asia
418
249
14
East Asia and Pacific
159
126
15
Latin America and the Caribbean
33
35
7.8
Data Source: (Hillebrand, 2011, Ravallion, 2012)

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The presentation:
The growth of antipoverty transfers in developing countries
Reach and diversity
Current practice
Programme focus: design, implementation, and impact
Sustainability
Institutionalisation
Financing and Politics

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Growth of large scale programmes providing income transfers to households in poverty in the South
Social assistance: tax-financed programmes addressing poverty
Globally ~ 0.75 to 1 billion people reached by transfers
Diversity in design
In middle income countries transfers programmes reach a significant fraction of the population
In low income countries progress has been slower
0.50.250.250.1South AfricaBrazilMexicoEthiopiaFraction of households reached by social assistanceFraction of households reached by social assistance

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What explains the growth in antipoverty transfers?
Crises and adjustment in the 1980s and 1990s led to structural deficits in wellbeing and protection in developing countries
Democratisation and an expanding fiscal space have created favourable conditions in which governments can address these structural deficits
Poverty research has developed knowledge and tools for innovative and effective antipoverty transfer programmes

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Programme focus: Diversity in design and objectives
 pure income transfers
Social pensions, child grant, family allowances [South Africa’s Child Support Grant and Older Person Grant]
 income transfers and asset accumulation
Human development [Mexico’s Oportunidades, Brazil’ Bolsa Família]
Infrastructure and asset protection [India’s National Rural Employment Guarantee, Ethiopia’s Productive Safety Net Programme]
 integrated poverty eradication programmes
[Chile’s Chile Solidario, BRAC’s CFPR-Targeting the Ultra Poor]
Resource: Social Assistance in Developing Countries Database version 5 – available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1672090

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02040608010012014016018019901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012 cumulative programme starts Cumulative series of flagship transfer programme starts by typeIn KindHD-CCTEmploymentCategorical-pensionCategorical-Other

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The contribution of poverty research
Programme design and implementation informed by developments in poverty research:
Depth and severity of poverty, not just headcount
...ranking of the poor (extreme - moderate poverty)
Poverty is multidimensional,
...duration matters (intergenerational persistence)
Focus on households (agency and productive capacity)
Information and incentives (conditions and co-responsibility)

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Implementation capacity varies across low and middle income countries
Village committee in Kalomo District in Zambia responsible for the implementation of the Social Transfer Pilot Programme

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Pension day in Lesotho
Katherine Vincent/2007

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Ensuring services provision for low income households in Uruguay

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Short run effect on poverty
17.3636.1345.6305101520253035404550Poverty headcountPoverty gap Poverty gap squaredDifference in difference estimates of the poverty reduction effectiveness of Progresa/Oportunidades in Mexico two years after its introduction Poverty reduction (%) 1997-1999Data source: Skoufias, E. 2005. Progresa and Its Impacts on the Welfare of Rural Households in Mexico, Washington: International Food Policy Research Institute

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Child labour outcomes from selected child-focused programmes
Bono desarrollo Humano (Ecuador) CSG (S. Africa) RPS (Nicaragua) PRAF (Honduras) Familias Accion (Colombia) Oportunidades (Mexico) PATH (Jamaica) SCT (Malawi) Tekopora (Paraguay) 0246810121416180%5%10%15%20%25%30%35%40%45% Reduction in child labour (percentage points) Value of transfers as percentage of total household income

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Transition from ‘development projects’ to ‘institution building’
Transition involves:
Legal status – budget, operations, entitlements
Strengthening implementation capacity
Institutional coordination within government
Domestic financing
Ministries of Social Development – social protection networks

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Financing
Most countries spend between 1% and 2 % of GDP in social assistance
0.01.02.03.04.05.06.07.0 Australia(OECD) Djibouti(SSN) Malawi(SSN) New Zealand(OECD) Ukraine(SSN) United Kingdom(OECD) Botswana(SSN) Ireland(OECD) Kosovo(SSN) St. Vincent and the Grenadines(SSN) Armenia(SSN) St. Lucia(SSN) Uzbekistan(SSN) Morocco(SSN) Croatia(SSN) Namibia(SSI) Dominican Republic(SSN) Moldova(SSN) Czech Republic(OECD) Grenada(SSN) Burkina Faso(SSI) Germany(OECD) Argentina(SSN) Georgia(SSN) Brazil(SSN) Serbia(SSN) Latvia(SSN) Greece(OECD) United States(OECD) Bulgaria(SSN) Tanzania(SSI) Bangladesh(ADB) Netherlands(OECD) Poland(OECD) Ecuador(SSN) Nicaragua(SSN) Vietnam(SSN) Denmark(OECD) El Salvador(SSN) St. Kitts and Nevis(SSN) Benin(SSI) Belgium(OECD) Côte d'Ivoire(SSI) Mauritania(SSI) Jamaica(SSN) Peru(SSN) Korea(OECD) Kyrgyz Republic(SSN) Venezuela, RB(SSN) Hungary(OECD) Sweden(OECD) Cook Islands(ADB) Luxembourg(OECD) Uruguay(SSN) Niger(SSI) Paraguay(SSN) Indonesia(ADB) Maldives(ADB) Zimbabwe(SSI) Philippines(SSN) Cambodia(ADB) Lao(ADB) Malaysia(ADB) Vanuatu(ADB) Chad(SSI) Tonga(ADB) Bhutan(ADB)

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For many middle income countries, the issue is not larger budgets but fewer and more effective programmes (Bangladesh has over 95 social protection programmes; while Chile had 143 in 2002)
For low income countries, financing social assistance is a challenge because of their low revenue collection capacity
International assistance has a limited role in supporting antipoverty transfers, mainly to help overcome the large initial costs of new programmes
In low and middle income countries, consumption taxes and natural resource revenues provide the fiscal space for the expansion of social assistance

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‘Narratives’ of social assistance financing in the South: Legitimacy
 Chile’s return to democracy after seventeen years of dictatorship in 1990 was led by a centre-left coalition of parties. The coalition was committed to expanding social expenditure, especially poverty reduction. This was financed by a rise of two percent in the tax burden, distributed across rises in corporate taxes, personal income taxation, and VAT.
 In 1994, Bolivia was poised to privatise state-owned enterprises, especially in the energy sector. To facilitate public consent, the government proposed to maintain one-half of the shares in the privatised enterprises in a Special Fund. The returns from this Fund were to be used to finance a regular transfer to the adult cohort (aged twenty-one or over in 1995). After further debate, the transfer became a non- contributory pension, the Bono de Solidaridad, payable from the age of sixty-five. The government of Evo Morales extended entitlement to the transfer to all Bolivians on reaching sixty years of age.
 Non-contributory pension programmes introduced in Lesotho (2004) and Swaziland (2006) are linked to revenues from the Southern African Customs Union (SACU).
 Antipoverty transfer programmes in Zambia, Uganda and Ethiopia are financed by bilateral aid, through a Memorandum of Understanding between donors and the government. In Ghana, the initial financing of the LEAP (Livelihood Empowerment Against Poverty) Programme was linked to HIPC debt cancellation, but bilateral donors also contributed.

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Conclusions
Rapid growth of social assistance in low and middle income countries
Diversity in programme design – path dependence and poverty perspectives
Programme design and objectives of transfer programmes informed by poverty research
Programmes show variation in effectiveness, but well designed and implemented antipoverty programmes have the potential to reduce poverty and inequality
Sustainability depends on:
Shift to domestic financing
Antipoverty transfers, together with growth and service provision, will make an important contribution to a zero extreme poverty target;
…this will require strengthening domestic political processes, financing, and capacity

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Social Assistance in Developing Countries
Cambridge University Press
September 2013
ISBN 9781107039025

Antipoverty transfers and the post-2015 development agenda

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