Marie Ruel, IFPRI 14th May 2008, Royal museum for Central Africa in Tervuren, Belgium

1. INTERNATIONAL FOOD
POLICY RESEARCH INSTITUTE
sustainable solutions for ending hunger and poverty
Social Protection
for Inclusive Growth
Marie Ruel
International Food Policy Research Institute
May 15, 2008
Brussels

2. Economic Growth vs. Social
Protection
Economic growth alone is not enough to cut
poverty/hunger rapidly and with equity
Particularly true where:
High inequality
Bad governance
What is needed: Pro-poor growth +
More investment in social protection
M i t ti i l t ti
Implemented earlier
Implemented at larger scale

3. What is the Role of Social Protection?
Protective Preventative Promotional Transformational
Secure basic Reduce Enable people to Build, diversify, and Transform
consumption fluctuations in save, invest, and enhance use of institutions and
consumption accumulate assets relationships
and avert through • Reduce access • Economic
asset reduction in risk constraints • Political
reduction and income • Directly provide or
• Social
variation
i ti loan assets
• Build linkages with
institutions
• P bli works
Public k
•Food or cash • Insurance (health, asset)
transfers
• Direct feeding Conditional cash • Livelihoods programs
• Subsidies transfers • Credit and savings
• Home-based care
for the ill • Maternal and Child Health and Nutrition
• Child and adult education/skills
• Early childhood development

4. Social Protection & the Life Cycle
Pension
Elderly
Public Works
Adults Income generation
School fee waivers & vouchers
SP
School age Food/Cash for schooling
Programs
& Policies
Early Childhood Development
Pre-school
Matl & Child Health & Nutrition
0-2 y old
Food,
Food Cash Transfers
Prenatal

5. Conditional Cash Transfer Programs
g
(CCTs)
Target cash transfers to poor households,
often to woman within HH
f i hi
Conditional on:
Enrolling children in school
Attending health services
g
Some also fund supply side strengthening

6. Examples of Programs
Progresa/Oportunidades (Mexico)
Bolsa Alimentação (Brazil)
PRAF (Honduras)
Red de Protección S i l (Nicaragua)
R dd P tProtecció Social (Ni
ió
i )
Familias en Acción (Colombia)
Acció
Red Solidaria (El Salvador)
Bono Solidario (Equator)
Turkey

7. Mexico (PROGRESA/Oportunidades)
As of 2004, 5 million families, 25 million
individuals
Budget of US$ 2.5 billion or 0.3% of GDP
Average benefit received by beneficiary
households: 20% of the value of
consumption expenditure before program

8. Impacts on Poverty Reduction
In Mexico, PROGRESA reduced:
Poverty by 8.2%
y y
Poverty gap by 23.6%
Se e ty o po e ty
Severity of poverty by 3 5%
34.5%.
In Nicaragua, the Red increased:
Average per capita expenditures by 18% and
Average per capita expenditures of the
poorest households by 30%

9. Impacts on Education (Enrollment)
30
ollment
25
ercentage points)
20
0
nge in enro
p
Primary School
15
Secondary School
10
Chan
(pe
5
0
ey
rls
ua
ys
as
a
h
di
s
bo
rk
r
de
gi
ag
bo
du
Tu
la
ar
co
o
m
on
ng
ic
ic
i
Ca
ex
H
ex
N
Ba
M
M
(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)

10. Impacts on Health and Nutrition
p
70
60
nge (percentage
50
Honduras
40
points
Mexico
30 Nicaragua
Colombia
20
Chan
10
0
-10
-20
Health visits Illness Growth monitoring Stunting
(Sources: Skoufias 2005; Gertler 2000; Hoddinott forthcoming; IFPRI 2003; Maluccio and Flores
2005)

11. Conclusions on CCTs
C l i CCT
Programs have played important role in:
Reducing poverty, improving quality of diets
Improving health and education outcomes
Empowering women
Human capital formation
Effectiveness depends on:
Design, implementation, supply side response
Contextual factors (institutional, political,
sociocultural
i l l

12. Social Safety Nets
Can Promote G
C P t Growthth

13. 1) Creating Assets
Conditional Cash Transfers: human assets
By promoting schooling and health of children
Public Works: physical assets
By improving infrastructure (e.g. roads, irrigation,
schools, health clinics, etc )
schools clinics etc.)
Private Savings: financial assets
E.g. Mexico: l
E M i low i
income HH use 10% of tf transfers
f
for small investments, which leads to sustained ↑ in
consumption/capita in following 5 years
E.g. Bangladesh: compulsory savings imbedded in
program

14. 2) Protecting Assets
Prevent loss of assets following shocks
P tl f t f ll i h k
(floods, drought, civil strife):
Shocks can directly destroy assets (e g loss of
(e.g.
livestock)
Shocks may lead to asset sales to smooth
y
consumption
Income shocks can lead to lower investment in
schooling or health of children with long-lasting
children, ith long-
consequences
E.g.
E g drought in Zimbabwe led to childhood
stunting and reduced schooling
(impact:14% loss of lifetime earnings)

15. 3) Allowing more effective use of
) g
resources + risk taking
Threat of shocks leads to:
Low risk livelihood strategies
o s e ood st ateg es
Avoidance of new technologies or credit
Resulting in lower productivity (e.g. India and
(e g
Tanzania, this ↓ farm profits by 25-50%)
25-
SSN act as form of insurance:
Motivates poor HH to take risks
Allows q icker reco er from shocks
Allo s quicker recovery
Reduces permanent consequences

16. 4) Facilitating structural policy
) g y
reforms
Economic reforms that promote overall growth
often incur costs of adjustment for some
population segments
Safety nets can promote political acceptance of
new policies by offsetting some of these costs
p y g
(compensation)
E.g. Mexico introduced transfers to small
farms when adopting freer trade. The
program also led to increased production by
l l dt i d d ti b
serving as a source of cash for inputs and
as a form of insurance

17. 5) Reducing Inequality
Effective targeting helps get the transfers to
the poor:
Community targeting
Household targeting using income proxies or other
targeting approaches
This helps reduce inequality. By reducing
inequality social protection policies can
y
create conditions for growth to occur

18. Key Issues i Program Choice
K I in P Ch i
Levels of specific human capital disadvantage
Desired outcomes, where, for whom?
Reasons for these deficiencies
Administrative capacities
Capacity of supply side to deliver with quality
Capacity to monitor compliance
Costs and resources available over time
Political support
pp

19. Conclusions
C l i
SPP can improve livelihoods of the poor, allow
i li lih d f th ll
their productive participation in economy
Other components of development strategies:
good governance, functional infrastructure,
schools & health, etc.
Effective SSN programs have:
Clear objective and sound design
Feasible and effective targeting mechanism
Effective and reliable implementation
Strong M&E
Transparency in operations good communication
operations,
Strong political commitment

20. Role of SP during Current Food
g
Price “Crisis”
Real
R l need f i
d for increasing attention and
i tt ti d
investment in social protection:
Protective approaches (short-term mitigation)
(short-
Preventative approaches (long-term prevention)
(long-
In countries with no SP:
Introduce food or cash transfers
In countries with existing programs:
Scale up
Focus on: CCT, pension schemes, employment,
microfinance
Continue to invest in human capital creation