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

Social safety nets in World Bank lending and analytical work : FY2002 - 2007

This paper summarizes the state of the portfolio of World Bank lending activities and analytic work on social safety nets between FY2002-2007. It presents a description of the methodology used for compiling the inventories and analyses by region, type of intervention involved, sector board, and instrument. The World Bank has engaged with 118 countries on safety nets issues over the six years under review, providing lending in 68, analytic products in 86, training in 87, and a combined package of all three services in 42, demonstrating the increased sophistication and the important role of safety nets in social policy. There is noticeable variability over time as the portfolio and analytic effort expand when large or multiple countries face economic crises. The regional distribution of safety net activities shows the dominance of Latin America. The analysis also shows the diversity within the portfolio, with respect to both the type of intervention supported and the range of sectors involved in safety net work. Finally, the report delineates the implications and outlook for the future.Safety Nets and Transfers,Banks&Banking Reform,,Labor Policies,Debt Markets

Levels and patterns of safety net spending in developing and transition countries

This paper offers a new set of data compiled from individual World Bank country reports. The authors give a brief textual description of patterns and trends in spending, and provide the raw data and documentation of its sources in the appendix. The data are also provided in an excel spreadsheet on the safety nets website www.worldbank.org/safetynets so that others may use them. Mean spending on safety nets is 1.9 percent of gross domestic product (GDP) and median spending is 1.4 percent of GDP. For about half of the countries, spending falls between 1 and 2 percent of GDP. Some variation is apparent. Bosnia and Herzegovina, Pakistan, and Tajikistan, for example, spend considerably less than 1 percent of GDP, while spending on social safety nets in Ethiopia and Malawi is nearly 4.5 percent of GDP because international aid is counted, but will be more like 0.5 percent if only domestically financed spending were counted. Other high-spending countries Mauritius, South Africa, and the Slovak Republic finance their safety nets domestically. Spending on safety nets is less variable than spending on social protection or the social sectors.Safety Nets and Transfers,,Public Sector Expenditure Policy,Population Policies,Health Monitoring&Evaluation

Targeting outcomes redux

"...There are sharply divergent views as to how much narrowly targeted interventions actually benefit the poor. These result from differing assessments of three issues: whether better targeting outcomes are likely to be achieved, whether such methods are cost-effective, and whether the living standards of the poor are improved by such targeted interventions. This paper focuses on the first issue. Using a newly constructed database of targeted interventions, it addresses three questions: (1) What targeting outcomes are observed? (2) Are there systematic differences in targeting performance by targeting methods and other factors? (3) What are the implications for such systematic differences for the design and implementation of targeted interventions?" from Authors' Abstract.Developing countries ,Poverty ,

An observation on the bias in clinic-based estimates of malnutrition rates

Clinic-based data on malnutrition are the most readily available for following malnutrition levels and trends in most countries, but there is a bias inherent in clinic-based estimates of malnutrition rates. The authors compare annual clinic-based malnutrition data and those from four household surveys in Jamaica. The clinic data give lower estimates of malnutrition than the survey data in all four cases - significantly so in three. The size of the bias was variable over time, so the clinic data were not a good indicator of either levels of trends in nutrition status.Health Monitoring&Evaluation,Early Child and Children's Health,Early Childhood Development,Health Systems Development&Reform,Regional Rural Development

Targeting outcomes redux

"...There are sharply divergent views as to how much narrowly targeted interventions actually benefit the poor. These result from differing assessments of three issues: whether better targeting outcomes are likely to be achieved, whether such methods are cost-effective, and whether the living standards of the poor are improved by such targeted interventions. This paper focuses on the first issue. Using a newly constructed database of targeted interventions, it addresses three questions: (1) What targeting outcomes are observed? (2) Are there systematic differences in targeting performance by targeting methods and other factors? (3) What are the implications for such systematic differences for the design and implementation of targeted interventions?" from Authors' Abstract.Developing countries ,Poverty ,

Assessing safety net readiness in response to food price volatility

In 2008, when food prices rose precipitously to record highs, international attention and local policy in many countries focused on safety nets as part of the response. Now that food prices are high again, the issue of appropriate responses is again on the policy agenda. This note sets out a framework for making quick, qualitative assessments of how well countries'safety nets prepare them for a rapid policy response to rising food prices should the situation warrant. The framework is applied using data from spring 2011, presenting a snap?shot analysis of what is a dynamically changing situation. Based on this data safety net readiness is assessed in 13 vulnerable countries based on the following criteria: the presence of safety net programs, program coverage, administrative capacity, and to a lesser degree, targeting effectiveness. It is argued that these criteria will remain the same throughout time, even if the sample countries affected will be expected to vary. Based on thisanalysis the note highlights that though a number of countries are more prepared than they were in 2008, there is still a significant medium term agenda on safety net preparedness in the face of crisis. In this context, strategic lessons from the 2008 food crisis response are presented to better understand the response options and challenges facing governments and policy makers. The note concludes by calling for continued investment and scale up of safety nets to mitigate poverty impacts and help prevent long term setbacks in nutrition and poverty.Food&Beverage Industry,Safety Nets and Transfers,Emerging Markets,Rural Poverty Reduction,Regional Economic Development

Pay and grade differentials at the World Bank

Large international organizations such as the World Bank pursue many objectives in hiring policies, including reduced costs, cultural diversity, and the avoidance of discrimination. There can be sharp tradeoffs between these objectives. Diversity is enhanced by recruiting from an international labor market, for example, but international organizations face unusually large differences in reservation wages for staff capable of doing the same work. One way to reduce costs would be to pay employees their reservation wages, which implies unequal pay for equal work, or discrimination. The authors show how these tradeoffs are resolved in the World Bank's hiring processes. They estimate disparities in salary and grades between men and women and by country of origin that cannot be attributed to differences in the productive characteristics of workers. The results indicate that about half the salary and grade differentials between men and women and staff from high- and low-income countries are attributable to differences in worker characteristics. They explore a number of alternative explanations for the rest of the salary and grade differentials, including omitted-variable bias, quotas imposed to ensure diversity, and discrimination in hiring and promoting. They argue that neither omitted-variable bias nor quotas are compelling explanations for disparities, and that discrimination probably exists, although certainly less than would be implied by a cost-minimizing hiring policy. A shift seems to be occurring in the hiring process of the Bank, possibly because 1) the application pool, including women and Part II nationals (from developing countries) has significantly improved in quality; 2) information gathering during hiring has intensified, decreasing guesswork; 3) there is more incentive to staff from minority groups; and 4) the Bank's increasing diversity in terms of gender and nationality groups is more conducive to high performance by the people against whom there may previously have been bias.Public Health Promotion,Health Monitoring&Evaluation,Population&Development,Labor Management and Relations,Gender and Development,Primary Education,Health Monitoring&Evaluation,Labor Management and Relations,Population&Development,Agricultural Knowledge&Information Systems

Orphans and other vulnerable children : what role for social protection ?

Recent estimates have provided unprecedented numbers of orphans, and vulnerable children, either brought about because of the HIV/AIDS epidemic, or carriers themselves of HIV infections, a relentless growth which has precipitated a multifaceted care burden, that will too, grow for the next twenty years. This report records the proceedings of the Conference"Orphans and Other Vulnerable Children", which sought to promote awareness of the extent of this crisis, and, to probe the role of social protection in implementing a balanced response. The social protection framework for working with orphans, and vulnerable children shaped the conference agenda. Provision of appropriate risk management instruments is crucial for lasting poverty reduction, while programs to reduce the vulnerability of orphans, and other children, should play an integral role in any national development strategy, in the context of the HIV/AIDS epidemic. Building community capacity will constitute the centerpiece of any feasible response. Within a realistic framework, programs must spread, and scale up, to address the vast, and growing need.Street Children,Youth and Governance,Health Monitoring&Evaluation,Children and Youth,Primary Education