Transcript Emerging global evidence on developmental social protection

Emerging global evidence on developmental social protection:
implications for basic income in developing countries
Developmental Evidence
Cash Transfers and Basic Income
Ingrid van Niekerk (EPRI)
BIEN Congress, Brazil 2010
Friday July 1 2010
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Overview
 1. Evidence on food security, nutrition and
health
 2. Evidence on pro-poor and inclusive growth
 3. Cash transfers and social protection are
developmental
 4. Implications for Basic Income in developing
countries
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Cash transfers yield impacts on food security,
nutrition and health
HH receiving cash
transfers spend
more on food
Ben. receiving cash
transfers experience
less hunger
Children receiving
social transfers
tend to be better
nourished
Some results on
nutrition and
health impacts are
perplexing
• study of African pilots (IFPRI 2008)
• South Africa (Samson et al. 2010)
• Colombia (Ayala et al. 2005)
• Mozambique (EPRI 2010)
• South Africa (Samson et al. 2004, 2010)
• Zambia (MCDSS/GTZ 2007)
• study of Latin American programmes (IFPRI
2008)
• South Africa (Duflo 2003)
• Bangladesh (Devereux et al. 2006)
• Mexico (Szekely 2001 and Britto 2005)
• social transfers alone are often not sufficient
to tackle severe malnutrition, which has
multiple causes
• many studies fail to demonstrate improved
health outcomes, in part due to
methodological challenges
Most cash transfers buy predominantly food
Use of Cash Transfer by Program
80%
70%
60%
50%
40%
30%
20%
10%
0%
Food
SOURCE:
IFPRI
Education
Health
South Africa OAP
Kenya Cash Transfer for OVC
Namibia Old-Age Pension (urban)
Malaw i FACT
Other
Zambia SCTS
Mozambique INAS (urban)
Malaw i DECT
Savings &
Investment
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cumulative proportion of benefits
The distribution of social benefits
in South Africa
100%
80%
Pre-transfer income
School education
60%
Tertiary education
Health
Social assistance
40%
Housing
Line of equality
20%
0%
0%
20%
40%
60%
80%
100%
cumulative proportion of sample
SOURCE: South African National Treasury and Statistics South Africa
Lesotho demonstrates how social pensions
build human capital for children
 The world’s newest
universal social
pension,
implemented in 2004
 Formal
evaluations still in
progress
 Costs 1.4% of GDP
 Supports children
increasingly living
with older people
(OVC)
 Qualifying age 70
Lesotho
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Cash Transfers yield impacts on pro-poor and
inclusive economic growth
Strong evidence for
middle-income
countries
Anecdotal and
emerging evidence
for low-income
countries
Stronger evidence
on investment and
risk management
effects
Bigger questions on
social cohesion
impacts
• South Africa (EPRI)
• Mexico (IDS/ODI)
• Brazil (IPC-IG)
• Mozambique (EPRI 2010)
• Kenya
• Zambia (MCDSS/GTZ 2007)
• Social protection facilitates labour market
engagement
• …and helps to manage social risk
• social protection provides the poor and
excluded with an economic stake in society
• facilitating pro-poor economic reforms
• and increasing the demand for better
governance
Social protection promotes better risk
management and encourages investment
Social
protectio
n
Risk
Manage
-ment
Higher
investment
and growth
Social Transfers in South Africa support
economic growth along multiple dimensions
 Sub-Saharan Africa’s oldest
social transfer programme
 Costs 3% of GDP
 Substantial impact on
poverty reduction
 Extensive studies of growth
outcomes
– Human capital
– Labour markets
– Macroeconomics
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Cash transfers improve labour
market participation and employment rates
70%
60%

50%
40%
30%
20%
10%
0%
Out of LF
Unemp., no
search
Unemp.,
searching
Employed
Labor force status, March 2005
CSG households
Non-CSG households
n=3462
n=1795
Social pensions support local
economies
 A transformed
pension system since
democracy in 1990
 Near-universal takeup (85%)
 Costs 0.7% of GDP
 Supports labour
market participation,
particularly for
women
Namibia
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Cash transfers in Zambia:
entrepreneurial and livelihoods investment
 Pilot initiated in 2003
 Targets the poorest and
most vulnerable 10% of
households
 Approximately 30% of the
value of cash transfers
invested, with high returns
multiplying the value of the
transfer and promoting
growth
 Similar to Brazil’s
experience
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Propensity score matching techniques provide ex
post evidence on agricultural resilience
Propensity
score
13% agricultural
attrition
8% agricultural
attrition
Social protection is about more than
reducing poverty
Social
protection
-
it is developmental
Poverty and
inequality
Poverty gaps /
headcounts and Gini
Human
capital
Nutrition, education,
health
Risk
management
Ex post and ex ante
Social
cohesion
Nation-building,
inclusion, equity, peace
Macroeconomics
Crisis response,
economic restructuring
Social protection reinforces social cohesion,
facilitating economic reforms that promote
pro-poor growth
EXAMPLES
 Mauritius
 Botswana
 Nepal
 Papua New Guinea
Mauritius
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Cash transfers reduce inequality in Botswana,
supporting social stability and growth




A social pension since 1996
Universal take-up
Costs 0.4% of GDP
Social transfers reduce
inequality in one of the
world’s most unequal
societies— helping to
stabilise conditions
that promote
economic growth.
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SOUTH AFRICA
 South Africa- progressive realisation of






“Comprehensive Social Security System”. Taylor
Committee Report in 2002
BIG Campaign – Donation?
Move slowly toward a universal approach
State Old Age Pension-remove means test?
CSG-extension to age 18
Working age adults between 19 and 59?
Soft Conditionalities on the CSG
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Technological Improvements
 Secure cash machines that hold the cash and use
biometric data to determine beneficiary
 Smart card system-savings card, credit card
 Bank by phone (popular in Kenya) – Empesa-
remittance payment
 More secure, easier and cheaper
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What do we need for BI to be
successful implemented?
 Political Will
 Rights-based approaches
 State led –political support
 Taxable capacity – middle income country
 Institutional capacity on both delivery and
administration
 Integrated provision- cash + complementary
services
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Obrigado
Thank you
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Namibia: BIG Pilot Project
 Shows that BI has the desired effects of poverty
reduction and economic development
 Project started in January 2008
 Grant administered to 1000 people in town of
Omitara- scheduled to run for two years
 (Large country with small population and very high
income inequality)
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Namibian Basic Income Pilot:
First Universal Cash Pilot
 In January 2008, a Basic Income Grant (BIG) pilot project
began in the Otjivero-Omitara area 100 kilometres east of
Windhoek.
 All residents below the age of 60 years receive a Basic
Income . Grant of N$100 per person per month, without
any conditions being attached.
 The grant is being given to every person registered as living
there in July 2007, whatever their social and economic
status.
 This BIG pilot project is designed and implemented by the
Namibian Basic Income Grant Coalition (established in
2004)
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Main Findings
 Weight-for-age has improved significantly in just six
months from 42% of underweight children to only
17%.
 There is strong evidence that more people are now
able to engage in more productive activities.
 the BIG fosters local economic growth and
development. Several small enterprises started in
Otjivero, making use of the BIG money being spent in
the community.
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 More than double the number of parents paid school
fees. Parents prioritized buying of school uniforms
 More children are attending school and the stronger
financial situation of the school (school fees) has
helped the school to buy more school materials
 Drop out rates at school were 30-40% before the
introduction of a BIG, by July 2008 these rates were
reduced to a mere 5%.
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 Increased use of the settlement's health clinic since the
introduction of the BIG. Residents now pay the N$4
payment for each visit and the income of the clinic has
increased fivefold.
 Several cases document that young women have
been freed from having to engage in transactional sex.
 Economic and poverty-related crime (illegal hunting, theft
and trespassing) has fallen by over 20%.
 The BIG has helped to achieve progress towards all eight
Millenium Development Goals.
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