Five criteria for choosing among poverty programs

The author addresses the issue of how to choose among discreet poverty interventions such as food stamp programs, public works, or small enterprise credit schemes where little formal policy modeling is done prior to decisionmaking. The minimum criteria on which to judge the relative merits of poverty programs are the following. Administrative feasibility. This depends on the detailed designof the program, the level of resources available for administration, and the degree of imperfection that can be tolerated. Political feasibility. This depends on how the program is promoted to the public, how coalitions of supporters or detractors are built, and the relative power of beneficiaries, suppliers, and administrators. Collateral effects on the poverty strategy. How will a safety net program affect, for example, the participants'labor supply, participation in other programs, and receipt of private interhousehold transfers, and how will those changes affect markets and government finances? What will be the net effect on poverty reduction. Potential for targeting the poor. Will the program reach significant number of the poor? How much leakage of benefits will there be to the nonpoor? Tailoring the solution to the problem. The program choice should address the real problem. Where the poor have suffered a loss of real wages rather than a loss of jobs, for example, transfers to the working poor may be more relevant than creating jobs. This criterion may seem obvious, but many proposals seem to ignore it. The author illustrates her main points by applying these criteria to a range of poverty programs commonly used in Latin America. General subsidies of food prices, for example, are administratively and politically feasible and lower food costs to the consumer, but they may distort the economy, harming growth. Food stamps are easy to target to the poor, are fairly difficult to administer, depending on program design, but depending on program design, may encourage the use of schools and primary health care. But there is controversy about whether they encourage dependency and diminish the work ethic.Rural Poverty Reduction,Environmental Economics&Policies,Health Economics&Finance,Services&Transfers to Poor,Safety Nets and Transfers

Institutional dimensions of poverty reduction

The institutional focus of this paper, on the poor as necessary actors in development, is best seen in the context of the Bank's evolving approach to poverty reduction. During the first two decades of existence, the primary goal of Bank activities was to increase the aggregate growth rate of its borrowers. Benefits from growth were supposed to trickle down, however, by the 1970s it was apparent that this"trickle down"strategy was a failure. While the formulation of new policies to tackle poverty issues is under way at the Bank, implementation strategies are not as elaborate. One strong theme emerging is the need to make special efforts to reach the poor. In most instances poor people are not automatically included in public programs and services, nor in market and input delivery systems. This paper aims at helping bridge the gap between design and implementation of poverty alleviation strategies. It addresses specifically two issues that have plagued the implementation and sustainability of poverty-oriented projects: (a) inappropriate project design due to a lack of understanding of beneficiary populations which results in their disinterest or rejection of project components; and (b) difficulty of reaching poor people through traditional formal organizational arrangements. The paper concludes with a discussion of the operational implications of these two poverty-related issues.Health Monitoring&Evaluation,Poverty Assessment,Health Economics&Finance,Environmental Economics&Policies,Poverty Monitoring&Analysis

Decentralizing the provision of public services in Bolivia: institutions, political competition and the effectiveness of local government

This dissertation comprises a close analysis of decentralization in Bolivia, employing a methodology that marries qualitative and quantitative techniques. It first examines the effects of decentralization on public-sector investment and the provision of public services in Bolivia using a unique database that includes measures of municipalities' social and institutional characteristics and information on its policy-making processes. I find that decentralization changed both the sectoral uses of public resources and their geographic distribution significantly by increasing government sensitivity to local needs in human capital investment and the provision of basic services. I then investigate the determinants of central and local government investment respectively in order to investigate why the shift in regime produced such large changes in investment patterns. I then turn to a much deeper examination of local government via nine case studies, selected to broadly represent Bolivia's national diversity. I begin with an account of the workings of local government in the best and worst of these, analyzing the character and interactions of the major societal actors. I locate fundamental causes of good and bad government in the economic structure of a district as it relates to the political party system, and the cohesiveness and organizational capacity of its civil society. These ideas are used to build a conceptual model of the local government process in which the interactions of political, economic and civic actors reveal information and enforce accountability. I show how imbalances between them can cripple accountability and distort the policy-making process. Lastly, the dissertation tests the model by examining government performance in seven additional municipalities. I show that the framework can explain the emergence of good or bad government institutions, and thus the quality of government a district ultimately receives, through the interactions of key players —notably civic organizations — deep in the local political economy

Does decentralization increase responsiveness to local needs? - evidence from Bolivia

Significant changes in public investment patterns - in both the sectoral uses of funds, and their geographic distribution - emerged after Bolivia devolved substantial resources from central agencies, to municipalities in 1994. By far the most important determinant of these changes are objective indicators of social need (for example, education investment rises where illiteracy is higher). Indicators of institutional capacity, and social organization are less important. Empirical tests using a unique database show that investment changed significantly in education, agriculture, urban development, water management, water and sanitation, and possibly health. These results are robust, and insensitive to specification. As the smallest, poorest municipalities invested newly devolved public funds in their highest priority projects, investment showed a strong, positive relationship with need in agriculture, and the social sectors. In sectors where decentralization did not bring about changes, the central government had invested little before a994, and the local government continued to invest little afterward. These findings are consistent with a model of public investment, in which local government's superior knowledge of local needs, dominates the central government's technical, and organizational advantage in the provision of public services.National Governance,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies

Will a Women\u27s Manufacturing Clothing Operation Be Feasible in La Paz, Bolivia?

More and more foreign companies have been looking to Bolivia, located in the heart of South America, as the ideal offshore production location to reduce operating costs. Investors are impressed to find very competitive labor rates, high productivity, low turnover and low absenteeism. The average wage for a factory worker is about 100 dollars per month.\u27 Although the literacy rate is low, the work force has a tradition of manual dexterity, train ability and high work ethics. The country\u27s attractiveness as a manufacturing location is further increased because Bolivia does not have apparel quotas. In addition, special treaties and agreements are being developed to provide preferential access to the United States and European markets. Companies looking to source export quality garments can find an attractive existing manufacturing facilities in place from which to undertake draw-back or full package contracting. There are sources, like Bolivinvest which provides free technical assistance to help you develop suppliers to fulfill your specific needs

Public and Private Firms in Natural Resource Industry: Comparing the Development of the Lithium Industry in South America

Literature on public and private firms has traditionally focused on the efficiency effects of differing firm ownership, although the literature has been largely dormant since the 1980s. State-led development models in Asia and Latin America warrant continued analysis of this fundamental issue in International Political Economy. This paper attempts to frame debate on natural resource governance by identifying the factors that affect the mix of public and private firms in extractive industry. Historical institutionalism is used as a framework for analyzing policy change, and political economy theory of governance institutions is compared to the traditional economic theory of the firm. Analyzing the lithium industry in Chile and Bolivia as a case study, this paper suggests that temporal factors like historical stability of economic modeling and the sustained protection of property rights are critical in determining the optimum mix of public and private firms. This paper synthesizes existing scholarly contributions with original fieldwork gathered in the region

Microfinance as Business

We analyze microfinance institutions (MFIs) as businesses, asking how some succeed in covering costs, earning returns, attracting capital, and scaling up. We draw on existing literature and interviews with industry players and academics. Key microfinance business challenges include building volume, keeping loan repayment rates high, retaining customers, and minimizing scope for fraud. Since the 1970s, microfinance innovators have developed clever solutions to these problems. Some have built huge organizations that serve thousands or millions of clients and have demonstrated an impressive capacity for change—in countries, to boot, with weak infrastructure and human capital. The individual innovations have spread both through a Darwinian process of selection and through cultural diffu-sion. We examine three kinds of determinants of commercial success: product design, management, and environmental factors such as regulation. We conclude that much about how microfinance is de-livered can be understood as responses to business imperatives. Indeed, the discoveries of techniques for cost-effective microfinance delivery are the real genius of microfinance, rather than the "discovery" that the poor can repay that dominates its public image. But by Occam's razor (simpler explanations are more plausible), the power of commercial imperatives to explain so many product design choices weakens an alternative explanation for them, namely that they are made primarily to help clients. These doubts point up the need for more rigorous impact evaluations of microfinance.microfinance

Social services delivery through community-based projects

The World Bank is financing an increasing number of community-based social services projects. The objective of this paper is to review and categorize the extent, scope and mechanisms of these projects in the current Bank portfolio, and to identify good practices and potential pitfalls. The authors identify 99 projects that finance at least $1.6 billion in social services. While most of the projects surveyed deliver"traditional"services such as nutrition, maternal and child care, and literacy, the scope of many projects has expanded to include newer services such as counseling, home-based care for the elderly and disabled, and early childhood development.Health Economics&Finance,Banks&Banking Reform,Governance Indicators,Health Monitoring&Evaluation,Municipal Financial Management

Nourishing the SDGs: Global Nutrition Report 2017

A better nourished world is a better world. Yet despite the significant steps the world has taken towards improving nutrition and associated health burdens over recent decades, this year’s Global Nutrition Report shows what a large-scale and universal problem nutrition is. The global community is grappling with multiple burdens of malnutrition. Our analysis shows that 88% of countries for which we have data face a serious burden of either two or three forms of malnutrition (childhood stunting, anaemia in women of reproductive age and/or overweight in adult women)