Transcript Contextual information for targeting presentation in Iraq

:
Safety Nets and Effective Targeting
Ruslan Yemtsov
Lead Economist, World Bank
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Outline
1.
2.
3.
Economic growth, poverty and inequality: new context
Shared prosperity
How shared prosperity can be achieved? Role of investment in
the human capital and social protection.
Evidence on contribution of social protection to shared growth
4.
•
•
•
5.
6.
Patterns of social protection around the world: gap analysis
Political economy of social protection
•
•
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7.
Channels of impact
Strength of evidence and practice
Is evidence making an impact?
What is political economy?
Social protection through the prism of political economy
Pathways to social protection: real and false dilemmas
Role of donors and partners
2
Poverty: is growth enough?
Sub-Saharan Africa can and should take a leading role
Population living on less than $1.25 a day, 2005 PPP (%)
70
59
60
58
51
49
50
40
48
43
35
30
29
20
Sub-Saharan
Africa
World
10
19
18
0
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2010*
* Preliminary
Inequality: why are we
concerned?
• Calculations for Asia show that if inequality had not risen,
then economic growth could have lifted almost a quarter of a
billion more people out of poverty over the last two decades.
• Similarly, for Brazil between 1998 and 2009, had inequality not
declined to the extent it did, annual growth would have had to
have been 4 percentage points higher to achieve the same
poverty reduction over this period.
• Asian Development Bank (2012), ibid.
• Lustig, Ortiz-Juarez and Lopez-Calva (2011), ibid
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Social contract needed to increase
opportunities for all
India - Immunization
Uganda - Underweight
25
71
70
60
65
63.8
50
Bottom 40%
Top 20%
40
30
24.75
28.8
20
19.4
10
0
1992-93
1998-99
2005-06
Percentage of children under five years classified as
underweight
Percentage of children 12-23 months fully immunized
80
22.2
20
18.1
15
16.2
Bottom 40%
Top 20%
10
8.9
8.4
8.4
5
0
2000-01
2006
2011
Income growth of the bottom 40%
(Annual household consumption rate, early 2000s - late 2000s)
First — Analyze performance by
income growth of the poor
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Annual Consumption Growth (%)
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Second — Analyze performance of
the poor compared to the average
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4
2
0
-2
Income growth of the bottom 40%
Average income growth
United States
50,000
Income Growth of the Bottom 40%
1967-2011: 0.55% p.a.
2000-2011: -1.41% p.a.
45,000
PPP constant 2005 international $
40,000
42,486
39,545
GDP per capita
35,000
31,899
30,000
25,000
25,510
20,000
19,585
Mean income
of bottom 40%
15,000
10,000
7,430
6,491
6,364
5,000
6,358
4,989
0
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Consumption Growth of the Bottom 40% (%)
Growth in incomes of the poor requires overall growth.
But the same level of growth might result in different outcomes.
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10
Consumption growth of the
bottom 40% is positive and faster
than the average
Russia
8
China
6
Mexico
Brazil
4
2
Egypt
0
Côte d'Ivoire
-2
0
-2
South Africa
Indonesia
Rwanda
Bangladesh
2
4
6
Consumption growth of the
bottom 40% is positive but
slower than the average
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Consumption Growth of the Total Population (%)
10
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Evidence shows social protection and labor policies
contribute to sustainable, inclusive growth
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Source: Alderman and Yemtsov (2012)
Scale of effects
Country/ Level
Program/Type
Method
Results
Study
Cross-country/ macro
All SP spending
Regression
Moving from 0 to 2% of GDP spending on SP increases growth
by 0.1-0.4 pp
Zaman and Tiwari (forthcoming)
South Africa/ macro
Gundo Lashu and EPWP/Workfare
SAM
Labor intensive PW on the scale of 0.2% of GDP increases GDP
by 0.34%
Mc Cord and Van Sventer (2004)
2009 Stimulus package
Modeling
Multiplier for expansion of the food stamp program is 1.7, larger
than for infrastructure spending (1.6)
Zandi (2009)
Fully Funded (FF) Pensions
Simulations
Moving from PAYG to FF pensions increases GDP by 3-5% in
110 years
Corsetti and Schmidt-Hebbel (1995)
BRAC/Rural develop-Microcredit
SAM
BRAC was boosting GDP by 1.15% in 1998 while its cost was
0.2% of GDP
Alamgir (1996); Mallick (2000)
Brazil/ meso
Bolsa familia/ CCT
Regressions
10% increase in the program increases municipal GDP by 0.6%,
B/C=3.5
Landim (2009)
India/ meso
NREGA/ Public Works
Simulations/ SAM
Public works in village has increased HH incomes with a
multiplier of 1.77
Hirway ey al (2009)
Malawi/meso
Dowa Emergency Cash Transfer
(DECT) /CT
Simplified SAM
Total multiplier effects of the DECT between 2.02 and 2.79
Davies and Davey, 2007
China/micro
Southwest China Poverty Reduction/CT
ERR
ERR = 8.6-9.8% (lower bound)
Ravallion and Chen (2005)
Food for Education (FFE)/ SF
ERR
ERR = 15-24%
Ryan and Meng (2004)
Colombia/ micr
Familias en Accion/CCT
B/C
Benefit-cost ratio = 1.59
IFS, Econometrica, SEI (2006)
Mexico/ micro
PROCAPMO/CT
Benefit-cost ratio
Benefit-cost ratio = 2.5
Sadoulet, De Janvry and Davis (2001)
Mexico/ micro
Oportunidades/CCT
ERR
ERR = 8%/year (lower bound); 17% (higher bound)
Coady and Parker (2004); Gertler et al (2006)
Child Support Grant/ CT
B/C
Benefit-cost ratio = 3.3-4.5
Agüero and others (2007)
Progressive Housing Program/Subsidy
ERR
ERR = 18%, much higher than country's official cut off rate of
12%
Marcano and Ruprah (2008)
US/macro
Representative econ./
macro
Bangladesh/ macro
Bangladesh/ micro
South Africa/ micro
Chile/ micro
Pre revolution view: be rich to be
protected
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The revolution is happening where
needs are greatest Rapidly
2000
2010
9 countries,
25 programs*
35 countries
123 programs
2012
41 countries,
245 programs
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* Counts CTs with clear start dates only; green countries have had or currently have a CT
Are we there yet? 11.2
1 billion
people
covered
855m extreme
poor not yet
covered
345m extreme
poor covered
1.2 billion
extreme poor
1 billion
people
covered
345m
488m
1.2 billion
173m
extreme poor
352m
74m
167m
Entire developing
world
Upper middle
income
countries
652m
178m
99m
398m
Lower middle Low income
income
countries
countries
Budget problem
PERCENT COUNTRIES ACHIEVING POVERTY REDUCTION TARGET WITH BCR SCENARIOS, BY
INCOME GROUPING
0%
LIC
LMIC
10%
20%
11%
30%
40%
33%
25%
60%
70%
80%
25%
100%
15%
69%
HIC
25%
100%
All Countries
90%
0%
10%
UMIC
50%
40%
19%
0%
0%
11%
6%
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Baseline
Mean BCR (0.082)
BCR top 25% (.217)
BCR max (.400)
Social Safety Net (SSN) Spending (% of GDP)
6
4
2
0
AFRICA
EAST ASIA AND
THE PACIFIC
EASTERN EUROPE
AND CENTRAL ASIA
LATIN AMERICA
AND THE
CARIBBEAN
MIDDLE SO.ASI
EAST AND
A
NORTH
AFRICA
Why political economy?
• Development and poverty reduction are
intrinsically political
• Reaching the poorest is a particular challenge
• Do they deserve it? Will richer & more powerful
groups support investments for the poorest?
• Research shows that politics has been central to
the success and failure of social protection
• Politics viewed here as an enabling as well as
constraining force
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What is political economy
analysis?
No single definition, but a good ‘in a nutshell’ by the OECD/DAC:
Political economy analysis is concerned with the interaction of political
and economic processes in a society: the distribution of power and
wealth between different groups and individuals, and the processes
that create, sustain and transform these relationships over time.
Cross-cutting and complementary to technical analysis, and analysis
aimed at identifying priorities
The fundamental purpose of PE analysis is to promote development
effectiveness
Different approaches have been and are being used – no one size fits
all, but there are emerging lessons of useful approaches, and about
various ‘how to’ issues
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•
Story of SP is political economy success in MICs
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large scale programmes
government buy-in
cross party support (reduce electorally vulnerable)
ongoing financing commitments
popular support giving mandate
rights based discourse
state responsibility to protect poorest
Less evidence of political economy success in LICs
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Reluctance to invest in SP (‘consumption’) and incur future liabilities
on part of governments
Success stories – eg Rwanda, Ethiopia and Nepal
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Political Stimulus
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Political factors
Electoral considerations
Security concerns
Instability
Address previous injustice
State building needs
Donor pressure/support
Popular national demand
• How resolve demands of competing priorities, persuade others and
build constituency for SP?
• How to ensure both political and popular support for major new
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initiative?
• Pre-requisites for building sustained social protection system;
• Political buy in (senior policy champions & cross party
endorsement)
• Secure medium term financing (donor/domestic)
• Legislative underpinning
Requires recognition;
Prior mechanisms for supporting the poor not viable
Market failure and ongoing exclusion from growth of significant
number of citizens
• Cost of failure to provide support (eg alienation, instability,
conflict, extremism)
• Provision of social protection is in interest of the state
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The links between politics and social protection:
a basic conceptual framework
From NGOs & policy spaces
to politics
• Few nationally-driven SP policies/programmes
have so far emerged from open policy spaces
(e.g. Sector Working Groups) or civil society
advocacy
• Closed, political spaces as more significant
• Parliament, cabinet discussions
• Civil society pressure may help, but this is more
important AFTER policies are established by
political actors
• Donors need to shift focus from civil to political
society
Three layers of problem-driven GPE analysis
Problem driven
Vulnerabilities
& concerns
Institutional/
governance
arrangements
& capacities
Political
economy
Evidence of poor
outcomes to which
GPE issues appear to
contribute
E.g. repeated failure to develop
solutions to lack of results in
sectors.
Infrastructure is constraint to
growth but is not being improved
What are the
institutional
arrangements & are
they capable, effective
& efficient?
Mapping of institutions: laws,
regulations; responsible public
bodies; formal and de facto rules
of the game; analysis of
integrity/corruption challenges
Why are things this
way? Why are policies
or inst. arrangements
not being improved?
Analysis of stakeholders,
incentives, rents/rent-distribution,
historical legacies & earlier reform
experiences; social trends & forces
and how they shape stakeholder
actions
False dilemma
• Targeting versus universalism
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False dilemma
• Wide variability across
countries about
• Extent of collective
responsibility for those
who are unable to
provide for themselves
• Attitudes about
distribution of
opportunities and
government’s role in
equalizing
opportunities and
outcomes
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Real Dilemma
• When and how fast to move?
• Constitutional changes: South Africa, Brazil (Rights-Based
SN) and paced implementation
• Consensus on goals and commitment: US 1996 welfare
reform, Colombia health insurance reform 1990s (with new
push with Right to Health)
• Crises
• Entrenched controversy: pilot, evaluate and scale-up if
successfull while building political support:
• Progresa 1997, Oportunidades 2000
• MENA 2013?
• Africa CTs (with remaining questions about domestic ownership)
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Real dilemma
• Empower local government vs central control.
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Summary (2)
How you implement matters !
• Lowering barriers to participation
• Effective dissemination of information about the program
• Minimize visits and waiting for application
• Minimize documentation required, free-of-charge provision of documents attesting
eligibility
• Introduction of one-stop or one-window system; Single application for multiple
benefits
• Lowering errors
• Use multiple targeting methods combined
• Cross-check the information provided by applicants against other public databases;
• Perform home-visits to assess the means of the households and Frequent recertification
• Improving program administration
• MIS, Staff training, Coordination,....
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Summary (3)
• Global experience shows that effective safety nets can
be designed as productive, growth promoting,
appropriate and sustainable
• It takes time and political will to build good safety nets
and targeting systems. Efficient safety nets require the
development of systems that allow the delivery of
social services quickly, in an integrated way and at low
costs.
• The World Bank can support these efforts as a global,
multi-sectoral, and knowledge-driven agency, which is
able to package global technical know-how, financing
and convening power – each critically important for
the safety nets agenda.
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More information
www.worldbank.org/safetynets
Enrollment in the Safety Net How-to
From Protection to Promotion, Chapter 4
Governance and service delivery in SSN working paper
The Transfer project website
http://www.cpc.unc.edu/projects/transfer
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