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Month: April 2018

April 27, 2018 (links edition #54)

What are the multiple effects of public works? There is new exciting evidence from India’s NREGA. A working paper by Imbert and Papp, and additional ungated draft manuscript by Imbert, point to 4 main findings (see also a blog). First, NREGA reduced rural to urban mobility. Migrants who stay back in the village to do NREGA work choose to incur an income loss (better paying private sector jobs in cities) to avoid the utility cost of migration. Second, rural employment programs can also impact urban areas. NREGA has increased wages in both rural and urban India. The rural wage effects challenge the traditional view of rural India as a surplus labor economy. Third, the indirect effects of the program are significant. NREGA increased rural and urban wages, and the benefits from higher wages may be as high as 50% of total benefits for the rural poor. Finally, would the rural poor be better off with an unconditional cash transfers instead of public works? Poverty would decrease more under a cash transfer model, but the poverty gap would not.

From Asia to Africa. A great paper by Premand and Schnitzer presents results from a targeting experiment in Niger. Eligible villages for cash transfers were randomly assigned to have beneficiary households selected through community-based targeting, a proxy-means test, or a formula designed to identify the food-insecure. Proxy-means testing was found to outperform other methods in identifying households with lower consumption per capita. The methods perform similarly against other welfare benchmarks. Legitimacy is high across all methods, but local populations have a slight preference for formula-based approaches. Manipulation and information imperfections are found to affect community-based targeting, although triangulation across multiple selection committees mitigates the related risks. Finally, short-term program impacts on food security are largest among households selected by proxy-means testing. An evaluation of public works program in Kenya found that community-based targeting is relatively successful in selecting households (based on food insecurity, income, and education levels). While the overall targeting process was deemed “fair and transparent”, there were cases where community leaders not invite all community members to the public ‘baraza’, but rather pre-select potential households based on subjective criteria.

Speaking of experiments, I recently bumped into an interesting article by Bedecarrats et al on the political economy of RCT (it is from last December). It argues that the success of RCTs is driven mainly by their mix of simplicity and mathematical rigor, media and donor appeal, and academic and financial returns. This in turn meets current interests and preferences in the academic world and the donor community.

More on cash transfers, but in humanitarian contexts. The Greece Cash Alliance (GCA) was launched in April 2017 with funding from ECHO to harmonize multiple cash programs for refugees under a single platform (including a single contract, financial service provider, card and registry of beneficiaries). An evaluation of the GCA by Nataf shows promising results. A similar assessment was undertaken by Smart in Nigeria. There, the global Enhanced Response Capacity (ERC) consortium had the objective is to facilitate the uptake of harmonized cash interventions. The findings are generally negative: “… [the ERC] was unable to account for contextual factors – including a lack of donor interest [in cash] – within the design of the package of activities led by the consortium member agencies, or to build the necessary ownership of the tools and processes developed. These factors were compounded by the context of the response in Nigeria, whereby many basic preconditions for cash were not in place”. BTW, since I mentioned refugees, Bernstein has a handy summary of the state of the refugee ‘debate vs empirical reality’ in the US.

From social assistance to insurance: how did Rwanda manage to achieve the highest health insurance coverage in the region? Coverage in the country is at a staggering 87% of the population. An article by Chemonuni argues that pursuing universal health coverage is an eminently political process, that is, the commitment to expanding coverage was made possible by a dominant political settlement. He concludes with a recipe for donors: “… when deciding to allocate funds to social protection, political economy analysis is key to assess pattern of decision-making, potential spoilers, clientelist pressure, and ultimately the regime’s commitment to provide sustainable solutions. (…) Careful analysis of ideas underpinning ruling coalition is essential. Programme design incompatible with ideas of the regime may undermine countries’ commitment to the programme or simply create political push-back, as showed spectacularly in Rwanda when the government directly opposed donors.”. Bonus: Woolcock has a working paper applying the principles of problem-driven iterative adaptation (PDIA) in the health sector.

A couple of measurement papers. Cuesta et al look at the distributional effects of tax and transfers on children in Uganda. Adopting CEQ as a basis, they show that the Ugandan ‘child budget’ is 4.2% of GDP, at the lower end of comparable countries. The modest impact of such spending level is the result both the limited amount and of its composition. Primary education spending is clearly progressive (it increases with the number of child deprivations), secondary education is regressive (it decreases with the number of deprivations affecting a child), while health services are either progressive (clinic visits) or regressive (hospital services). An article by Arndt et al compares the multidimensional poverty index (MPI) and first-order dominance approach (FOD) in 26 African countries. Results across the two measures are broadly similar but not the same. For example, while the MPI suggests that all countries are advancing, FOD indicates that 14 countries experience broad-based progress across various dimensions, two countries show more moderate likelihoods of progress, and the remaining 10 countries neither improve nor deteriorate in terms of attainment of rights for the dimensions considered. They conclude that the MPI is inconsistent with the Universal Declaration of Human Rights principles of indivisibility, inalienability, and equality, while FOD’s methodology maintains basic consistency with these principles.

Finally, in a CGD blog, Jaluka discusses the new Findex Database and other technology-related issues. Couple of nuggets: since 2011, formal bank account ownership is up 18 percentage points (69% globally), and 21% of adults in sub-Saharan Africa now have a mobile money account (which is nearly double the 2014 level).