Testing Vietnam's public safety net

An effective public safety net can be important in a poor transition economy such as Vietnam. Yet we know very little about the performance of existing public transfers as a safety net. Using panel data, the paper investigates whether Vietnam's main social welfare transfers promoted poor people out of poverty and whether they protected the non-poor from becoming poor. It also explores the role transfer programs played in the country's dramatic reduction of poverty in the 1990s. Counterfactual consumption levels without transfers allow for behavioral responses. The findings suggest that transfer programs helped few people escape poverty and protected even fewer from falling into poverty. The public safety net appears to have been largely irrelevant to the country's recent poverty reduction record.Services&Transfers to Poor,Rural Poverty Reduction,Safety Nets and Transfers,Poverty Assessment,Environmental Economics&Policies

Protecting the poor in Vietnam's emerging market economy

Poverty Assessment,Environmental Economics&Policies,Rural Poverty Reduction,Safety Nets and Transfers,Services&Transfers to Poor

Assessing the welfare impacts of public spending

An important objective of public spending is to raise household living standards, particularly for the poor. But how can final impacts on this objective best be assessed? Evaluating a policy's impact requires assessing how different things would have been in its absence. But the counterfactual of no intervention is tricky to quantify. The author surveys the methods most often used to assess the welfare effects of public spending. Limitations of current practices are studied and implications for future best practices are drawn. The methods used to assess welfare impacts broadly fall into two groups: benefit incidence studies and behavioral approaches. Benefit incidence studies ignore behavioral responses and second-round effects, using the provision cost as a proxy for benefits received. Behavioral approaches present quite different drawbacks, in attempting to represent individual benefits correctly. A number of recent studies usefully combine both approaches. It is still uncertain whether behaviorally consistent methods actually point to fundamentally different policy recommendations. What can be concluded is that we need to diversify and compare results from our evaluation methods and broaden our definition of well-being, to see how various facets of living standard are affected by public spending.Public Health Promotion,Environmental Economics&Policies,Health Economics&Finance,Economic Theory&Research,Decentralization,Poverty and Social Impact Analysis,Health Economics&Finance,Poverty Monitoring&Analysis,Environmental Economics&Policies,Economic Theory&Research

Fungibility and the flypaper effect of project aid : micro-evidence for Vietnam

While most economists assume that aid is fungible, most aid donors behave as if it is not. The authors study recipient government responses to development project aid in the context of a specific World Bank-financed project. They estimate the impact of a rural road rehabilitation project in Vietnam on the kilometers of roads actually rehabilitated and built. Using local-level survey data collected for this purpose, the authors test whether the evidence supports the standard economic argument that there will be little or no impact on rural roads rehabilitated, given fungibility. They find evidence that, although project aid impacts on rehabilitated road kilometers were less than intended, more roads were built in project areas. The results suggest that there was fungibility within the sector, but that aid largely stuck to that sector.Transport Economics Policy&Planning,Rural Roads&Transport,Rural Transport,Roads&Highways,Housing&Human Habitats

Do donors get what they paid for? micro evidence on the fungibility of development project aid

Recipient government responses to development project aid have typically been studied at high levels of aggregation, using cross-country comparisons and/or aggregate time series data. Yet increasingly the relevant decisions are being made at the local level, in response to specific community-level projects. The authors use local-level data to test for fungibility of World Bank financing of rural road rehabilitation targeted to specific geographic areas of Vietnam. A simple double difference estimate suggests that the project's net contribution to rehabilitated road increments is close to zero, suggesting complete displacement of funding. However, with better controls for the endogeneity of project placement the authors find much less evidence of fungibility, with displacement accounting for around one-third of the aid. The results point to the importance ofdealing with selection bias in assessing project aid fungibility.Housing&Human Habitats,Roads&Highways,ICT Policy and Strategies,Health Economics&Finance,Poverty Monitoring&Analysis

Does rising landlessness signal success or failure for Vietnam's agrarian transition?

In the wake of reforms to establish a free market in land-use rights, Vietnam is experiencing a pronounced rise in rural landlessness. To some observers this is a harmless by-product of a more efficient economy, while to others it signals the return of the pre-socialist class-structure, with the rural landless at the bottom of the economic ladder. The authors'theoretical model suggests that removing restrictions on land markets will increase landlessness among the poor, but that there will be both gainers and losers, with uncertain impacts on aggregate poverty. Empirically, they find that landlessness is less likely for the poor and that the observedrise in landlessness is poverty reducing on balance. However, there are marked regional differences, notably between the north and the south.Land Use and Policies,Rural Land Policies for Poverty Reduction,Rural Poverty Reduction,Rural Development Knowledge&Information Systems

Cost of living differences between urban and rural areas in Indonesia

It is commonly assumed that the cost of living is much higher in cities than in the country because housing rents are higher in urban areas and food staples cost more. This assumption has important implications for sectoral comparisons of welfare levels and distributions. The authors suspect that comparisons of housing rent and food prices overstate the cost-of-living differential. For one thing, the quality of dwelling stock is better on the whole in urban areas, reflecting income differences. For another, the urban consumer is able to substitute in favor of other goods and services which do not cost any more in urban areas. This paper finds that the true cost of living in cities is substantially overestimated by conventional methods. This is more pronounced at low incomes, since the marginal cost of utility is larger (relative to expenditures) in urban areas - implying that the relative cost of urban living increases with income. In a neighborhood on the poverty line, the results suggest that an urban-rural cost-of-living difference of about 10 percent is closer to the truth than the values (as high as 66 percent) used in past work on Indonesia.Economic Theory&Research,Environmental Economics&Policies,Housing&Human Habitats,Poverty Lines,National Urban Development Policies&Strategies

Rural roads and poor area development in Vietnam

The authors assess impacts of rural road rehabilitation on market development at the commune level in rural Vietnam and examine the variance of those impacts and the geographic, community, and household factors that explains it. Double difference and matching methods are used to address sources of selection bias in identifying impacts. The results point to significant average impacts on the development of local markets. They also uncover evidence of considerable impact heterogeneity, with a tendency for poorer communes to have higher impacts due to lower levels of initial market development. Yet, poor areas are also saddled with other attributes that reduce those impacts.Transport Economics Policy&Planning,Housing&Human Habitats,Debt Markets,Markets and Market Access,Economic Theory&Research

Left behind to farm ? women's labor re-allocation in rural China

The transformation of work during China’s rapid economic development is associated with a substantial but little noticed re-allocation of traditional farm labor among women, with some doing much less and some much more. This paper studies how the work, time allocation, and health of non-migrant women are affected by the out-migration of others in their household. The analysis finds that the women left behind are doing more farm work than would have otherwise been the case. There is also evidence that this is a persistent effect, and not just temporary re-allocation. For some types of women (notably older women), the labor re-allocation response comes out of their leisure.Population Policies,Health Monitoring&Evaluation,Gender and Development,Anthropology,Population&Development

Access to water, women's work and child outcomes

Poor rural women in the developing world spend considerable time collecting water. How then do they respond to improved access to water infrastructure? Does it increase their participation in income earning market-based activities? Does it improve the health and education outcomes of their children? To help address these questions, a new approach for dealing with the endogeneity of infrastructure placement in cross-sectional surveysis proposed and implemented using data for nine developing countries. The paper does not find that access to water comes with greater off-farm work for women, although in countries where substantial gender gaps in schooling exist, both boys'and girls'enrollments improve with better access to water. There are also some signs of impacts on child health as measured by anthropometric z-scores.Gender, Water Supply and Sanitation,Rural Labor Markets,Rural Water Supply and Sanitation,Access&Equity in Basic Education,Early Child and Children's Health