Assessing the Incidence of Public Works Programmes: Using Propensity Score Matching Techniques to Assess the Poverty Targeting of Employment in Two Public Works Programmes in South Africa

This paper explores the socio-economic identity of Public Works Programme (PWP) participants in two programmes in South Africa, in order to establish the incidence of PWP participation, a question which is central to assessing the social protection impact of PWPs, but which is frequently omitted from programme analysis, particularly in sub-Saharan Africa. The paper focuses on an analysis of the demographic and socio-economic characteristics of PWP participants. As in many PWPs, no baseline data on participants in these programme were collected. Therefore, it is not possible to ascertain a priori who the beneficiaries of the programmes are, a situation which fundamentally challenges any attempt to or to assess incidence or the social protection impact of such an intervention. The research interrogates the assumption that the 'less eligibility criteria' central to the design of PWPs (the work requirement and low wages) will lead to participation of the poorest, thereby reducing the likelihood of inclusion errors, attempting first to ascertain who the participants in the programmes are. The question is explored using survey data gathered in 2003 on two case study PWPs implemented simultaneously in South Africa, which adopt different design and targeting approaches. Programme incidence is then considered in relationship to targeting and programme objectives, and the conclusion drawn that in order for PWPs to reach the poorest in a given community, reliance on self targeting through the work requirement and a low wage is not adequate, and explicit targeting measures are needed during participant selection.

Financing Social Protection in the Light of International Spending Targets: A Public Sector Spending Review

This study explores the ‘affordability’ of development targets in six key sectors (health, education, water and sanitation, agriculture and infrastructure), by means of an empirical study examining sectoral expenditure in five low income case study countries in sub-Saharan Africa (Ethiopia, Kenya, Malawi, Mozambique and Uganda) and comparing them with target levels of expenditure set out in recent international agreements to which sub-Saharan governments are signatories. The study has a particular focus on social protection in response to growing government and donor interest in the affordability of provision in this sector. This approach is taken in order to assess the limitations of the current ‘silo’ approach to sector financing which characterises much of the development financing discourse, and which results in the abstraction of one sector from the broader fiscal whole, to the detriment of overall fiscal coherence and realism. While this study looks at total expenditure per sector, it does not look at efficiency or outcomes of this spending. The report examines expenditure in 2006/ 2007 in relation to sector-specific international targets, assesses the shortfall, and then explores the fiscal feasibility of financing all six sectoral targets. The paper finds that meeting all the six targets simultaneously would require more than 100% of total government expenditure in four of the five case study countries, and 98% in the fifth, and that to meet these targets while retaining current levels of expenditure in other sectors would imply doubling current levels of government expenditure. Often it is claimed that developing country governments lack the political will to allocate resources to some sectors. However, this study suggests that the inadequacy of public expenditure in key sectors is also informed by the inherent impossibility of simultaneously meeting the range of international commitments to which developing counties are signatories. Current funding for basic social protection provision is between 0.1% and 0.7% of GDP in the case study countries, compared to target expenditure levels of 4.5% to achieve the goals of the basic social protection component of the AU Social Policy Framework. This study concludes that the social protection sector is in competition with the five other key development sectors and that not all goals can be met from available resources. While there may be potential to increase financing to this sector through the conventional range of instruments (efficiency savings, reallocation, increased borrowing, increased revenue generation, increased ODA or private sector financing) the social protection sector is in effect in competition with each of the other key development sectors in pursuit of any additional resources, and when considered in aggregate as part of the wider fiscal context, it is clear that meeting all targets is not realistic, and consequently that the development vision which underlies them, is challenged, even compromised by the fiscal reality. Input targets have a role to play in i) motivating greater effort in revenue generation (within the boundaries of sound macroeconomic policy) and ii) encourage governments and donors to prioritise spending by reallocating from low to high-priority sectors within existing budgets. While such targets can serve as useful lobbying mechanisms, spending targets should be taken ‘seriously but not literally’ (Wood, 2004): that is primarily as a guide and motivation for raising and spending public finance. This report does not conclude that such targets should be dropped, but it does caution against the argument that particular sectoral targets are ‘affordable’ in any objective sense. The report highlights the tension faced by governments between the need for good public financial management on the one hand, and the challenge of meeting international commitments on the other, raising the impossibility of meeting the key development spending targets simultaneously. Given the unavoidable overall financing shortfall, the key question becomes prioritisation of the use of existing resources, the opportunity cost of programming outside these sectors and non priority or ineffective use of resources within the sectors.social protection; affordability; development targets; government budgets; Sub-Saharan Africa

The economy-wide impacts of the labour intensification of infrastructure expenditure in South Africa

This paper examines the performance of public works in addressing both micro and macroeconomic policy objectives relating to growth, employment and poverty reduction in South Africa. The microeconomic analysis suggests that while participation in a public works programme may contribute to a reduction in the depth of poverty, with improvements in participation in education and nutrition, and have positive psychosocial benefits, the impact of a short-term programme may not be significant in terms of a reduction in headcount poverty or improvements in asset ownership (material or financial). In this case the public works programme income may function essentially as a temporary wage shock, since the insurance function of the transfer is limited by the short duration of the employment period. From a macroeconomic perspective, a social accounting matrix (SAM) is used to estimate the impact of shifting R3 billion expenditure from machine to labour based infrastructure provision over a one year period. The SAM indicates that the impact would be to increase employment by 1%, the income of the poorest quintile by 2% (if employment were exclusively targeted to this group) and GDP by 0.1%. While these are positive outcomes, they are not significant in terms of South Africa's overall economic and employment performance. The conclusion is drawn that from both a macro and microeconomic perspective, there is reason to be cautious about the potential of a national public works programme based on shifting the labour intensity of infrastructure provision, and offering short-term employment opportunities, to have a significant impact on poverty, employment or growth.

The anatomy of public works : an exploration of the social protection function of public works programmes in contexts of chronic poverty

Includes abstract.Includes bibliographical references (leaves 352-374).This thesis critically explores the concept of the Public Works Programme (PWP) and interrogates the social protection performance of public works programmes (PWPs) in the context of chronic poverty, with a particular focus on the fundamental questions of programme incidence and impact. It reviews PWPs from both theoretical and empirical perspectives, using original qualitative and quantitative data drawn from a range of sources, including extensive field analysis and evaluations of PWPs in four countries in sub-Saharan Africa, interviews with the major multilaterals implementing PWPs and original survey work, designed, implemented and analysed by the author in South Africa to address the empirical issues arising from the current literature regarding PWP incidence and impact, as well as a literature review of over 200 PWPs implemented in east and southern Africa, detailed case studies of six international PWPs, and a review of both the social protection and public works literature

Public Works as a Response to Labour Market Failure in South Africa

Unemployment has been rising in South Africa for the last three decades, leading to official unemployment rates of 26.4% (37% if the broad definition is used). This implies a jobless total of 7 million, with more than 40% of the rural population unemployed, and the development of a growing pool of workers who are excluded from the labour market. The South African economy is facing labour market failure, with labour supply increasingly outstripping demand. If the economy continues on its current growth path this problem of labour market failure will intensify and the employment situation will continue to deteriorate. The severe levels of unemployment resulting from this market failure are a particular problem in South Africa given the role unemployment plays in exacerbating poverty and inequality in an already highly unequal and segmented society, and the uneven incidence of unemployment among racial groups. Public works programming offers a response to both poverty and unemployment, while also addressing the linked national priority issue of asset creation. This paper discusses the option of state intervention through public works, reviewing the South African response in the context of global public works experience. The paper examines both project based public works programming, which forms the dominant policy response in South Africa, and the option of large-scale labour intensification of state expenditure, and examines the employment creation and cost implications of each, drawing on a case study from KwaZulu Natal. The paper concludes that public works interventions in South Africa to date have been relatively limited in scope and impact, and that the potential exists for far greater job creation and poverty alleviation through both the labour intensification of public spending, and the rationalization of the project based approach.

Public works as a response to labour market failure in South Africa

Bibliography : leaves 112-120.Unemployment has been rising in South Africa for the last three decades, leading to official unemployment rates of 26.4% (37% if the broad definition is used). This implies a jobless total of 7 million, with more than 40% of the rural population unemployed, and the development of a growing pool of workers who are excluded from the labour market. The South African economy is facing labour market failure, with labour supply increasingly outstripping demand. If the economy continues on its current growth path this problem of labour market failure will intensify and the employment situation will continue to deteriorate. The severe levels of unemployment resulting from this market failure are a particular problem in South Africa given the role unemployment plays in exacerbating poverty and inequality in an already highly unequal and segmented society, and the uneven incidence of unemployment among racial groups. Public works programming offers a response to both poverty and unemployment, while also addressing the linked national priority issue of asset creation. This paper discusses the option of state intervention through public works, reviewing the South African response in the context of global public works experience. The paper examines both project based public works programming, which forms the dominant policy response in South Africa, and the option of large-scale labour intensification of state expenditure, and examines the employment creation and cost implications of each, drawing on a case study from KwaZulu Natal. The paper concludes that public works interventions in South Africa to date have been relatively limited in scope and impact, and that the potential exists for far greater job creation and poverty alleviation through both the labour intensification of public spending, and the rationalization of the project based approach

Recognising Heterogeneity: A Proposed Typology for Public Works Programmes

This paper highlights the diversity of the Public Works concept and the implications of this diversity for effective social protection programming. The paper outlines the heterogeneity of programmes currently implemented under the broad terminology of Public Works and the conceptual confusion that arises as a result of the use of the generic term Public Works Programme (PWP) to describe a range of highly diverse programmes without making adequate distinction between the different forms, together with the programming errors which ensue from this conceptual confusion. One particularly egregious result of this lack of clarity is the repeated implementation of PWPs offering only a single short term episode of employment in low and middle income countries where unemployment is principally structural, an intervention which is unlikely to offer significant or sustained social protection benefits for participants. In an attempt to address to this problem, a typology of PWPs is presented to provide a framework for a more systematic and insightful engagement with PWPs, which links PWP form to likely social protection outcomes in differing labour market contexts.

An Overview of the Performance and Potential of Public Works Programmes in South Africa

In this paper simple models are used to estimate the impact and fiscal feasibility of 'expanded' public works programmes using the limited data available. The employment creation potential of a R1.2 billion investment in labour intensive construction over three-years is found to represent a maximum of 0.5% of unemployed workdays per annum. The cost to the fiscus of an expanded public works programme able to offer part time employment to a significant number of workers (3.2 million) is found to be between R17 and R28 billion per annum.

Public works: Policy expectations and programme realities

This paper explores the ability of public works programmes (PWPs) to promote employment and reduce poverty. Public works are a key component of the current social protection framework in South Africa, constituting the only significant form of social support for the able-bodied working age unemployed, and are ascribed considerable potential in terms of addressing the central challenges of unemployment and poverty. Despite this policy prominence, the targeting of public works programmes and their micro-economic and labour market impacts have not been studied systematically in South Africa, rendering evidence-based policy development in this area problematic. This paper attempts to provide some initial responses to these questions in order to establish an evidence base for future policy development, and to identify some of the key policy lessons arising, drawing evidence from two case studies, the Gundo Lashu programme in Limpopo, and the Zibambele programme in KwaZulu Natal. The paper also reviews the policy context, and the characterisation of the unemployment problem in the policy discourse. The paper concludes that while PWPs can offer a partial response to the problems of poverty and unemployment if appropriately designed, the gap between policy expectation and programme reality is significant, and that PWPs cannot offer an adequate social protection response to the growing problem of the working age poor. The paper asserts that there is a need to recognise that PWPs can have only a limited role in the context of entrenched and structural unemployment, and that supply-side interventions are of limited value in response to poverty and unemployment among the low-skilled, given ongoing structural shifts in the South African economy and the delinking of economic growth and employment.

An overview of the performance and potential of public works programmes in South Africa

In this paper simple models are used to estimate the impact and fiscal feasibility of 'expanded' public works programmes using the limited data available. The employment creation potential of a R1.2 billion investment in labour intensive construction over three-years is found to represent a maximum of 0.5% of unemployed workdays per annum. The cost to the fiscus of an expanded public works programme able to offer part time employment to a significant number of workers (3.2 million) is found to be between R17 and R28 billion per annum