Being poor often means being hurt twice: Kenny and Sandefur have a CGD commentary replicating CEQ analysis and showing that tax-transfer systems reduce inequality in the rich world, but often exacerbate poverty in the poorest countries. In 4 of the 5 Sub-Saharan African countries where CEQ data is available, the net effect of taxes and transfers was an increase the number of people living below the absolute poverty line. In Tanzania, poverty is nearly 20 percent higher due to taxes and transfers.
But what types of transfers work better? There is lots of hype around job-guarantee schemes – or “public works for anyone who wants to work”. In a new CGD paper, Ravallion examines the pros and cons of guaranteed jobs vs guaranteed income. He points out that it cannot be presumed that switching to a universal basic income would reduce poverty more than workfare or finely-targeted transfers: “… the final outcome for poverty will of course depend on many factors, including the information available for identifying poor people and the feasible means of financing, including the scope for identifying and taxing rich people. (…) [It] is very hard to come out unconditionally on either side”.
On the same topic, Lowrey has a news article on the growing momentum behind proposals for a jobs guarantee program in the US. Glaeser et al advocate for a wage subsidy scheme geographically-targeted to depressed areas. And Kelton’s view that financing is not a big issue has raised curiosity about her branch of ‘modern monetary theory’.
Speaking of public works, there is new and exciting evidence from India’s NREGA program. A working paper by Imbert and Papp, and an additional ungated draft manuscript by Imbert, point to 4 main findings (see also a blog). They find that NREGA reduced rural to urban mobility, that rural employment programs can also impact urban areas, that the indirect effects of the program are significant, and that poverty would decrease more under an equivalent cash transfer model, but the poverty gap would not.
A more micro-analysis of targeting: a paper by Premand and Schnitzer presents results from comparing three targeting methods – community-based targeting, a proxy-means test, or a formula designed to identify the food-insecure –in Niger. Proxy-means testing was found to outperform other methods in identifying households with lower consumption per capita. Yet the methods perform similarly against other welfare benchmarks. An evaluation of a public works program in Kenya found that community-based targeting is relatively successful in selecting households (based on food insecurity, income, and education levels). However, there were cases where community leaders did not invite all community members to the public ‘baraza’, but rather pre-select potential households based on subjective criteria.
What’s new in social protection and human development? A new NBER paper by Hoynes and Schanzenbach finds that in the US, access to safety net programs during childhood leads to long-run benefits for children and society overall. Wheaton et al describe the possible effects of expanded work requirements in SNAP food vouchers: the changes would affect how families’ incomes are counted and how program eligibility is determined. A new experiment will soon take place in four American cities: the ‘Baby’s First Years’ project involves 1,000 low-income mothers, half of whom will be receiving $333 a month. The hypothesis is that regular cash payments will enhance the cognitive and emotional development of children. An NBER paper by Meyer and Wu shows that single-parent families are relatively underserved by the safety net (six core programs reduce their poverty rate by only 38%). A new JDE article by Ham and Michelson on the Honduras PRAF CCT program shows that demand-side cash incentives alone have limited lasting impacts; but when combined with enhancements on the supply side (clinics and schools), the joint provision results in greater human capital gains and labor market participation.
What about informal social protection arrangements? In a new working paper, Machado et al assess the role of zakat in the provision of social protection in Sudan, Palestine and Jordan. Although underpinned by the same principles, they show that institutionalization of zakat ranges from obligatory (e.g., Sudan) to voluntary contributions, as well as displaying differentiated benefit provision.
More from the MENA region: check out three handy IPC one-pagers providing an overview of social assistance for children in Djibouti, Bahrain, and Algeria. These are part of a larger review of social assistance in region. Bonus: the new Policy in Focus is dedicated to “women at work” – a nice collection of 15 short articles, many of which highly compelling to social protection (e.g. on Peru).
Let’s end this edition with crisis-related materials. An evaluation of the Greece Cash Alliance, which was meant to harmonize multiple cash programs for refugees under a single platform, shows promising results. On the contrary, a similar assessment in Nigeria found that it “… was unable to account for contextual factors (…) or to build the necessary ownership of the tools and processes developed”. Campbell and Knox Clarke produced an ALNAP literature review of humanitarian decision making processes, including in terms of response options, targeting, data collection, coordination, scale of programs, and staffing. A handy synopsis of shock-responsive cash transfers in Madagascar can be found here. In a HPG a briefing paper, Wake and Yu make the case to a switch in developmental approach in the Rohingya crisis. Finally, a WIDER working paper by Carbonnier traces the origins of ‘humanitarian economics’ as a new field of inquiry.
This monthly column draws from a weekly newsletter – to join send me an email: (ugentilini@worldbank.org). The previous edition of the column can be accessed here”
Join the Conversation