It’s finally out: Lustig’s monumental, 902-page edited handbook on the Commitment to Equity project is now available (the individual chapters and 81 working papers were already posted online). A pioneering project on the impact of tax-transfers systems in developing countries, CEQ has helped to bring the effects of financing and taxation more firmly into social protection debates – the latter often heavily focused on the benefit side of the equation. The work brings rigor and perspective, including unbundling the income concept (see p.17 for market, pre-fiscal, disposable, consumable, and final income) and providing a nuanced set of tools for determining the fiscal incidence and distributional impacts of alternative reform options. One of the most iconic graphs, showed above, reminds us that in many cases, the poorest can be net-payers – they pay more than they receive from the state. Effective redistribution is not just about cash transfers, but also (and mostly) about the underlying structural forces that shape income distributions.
Not one, but three great papers on humanitarian assistance and social protection. A discussion paper by Alawi Al-Ahmadi and Da Silva provides a detailed set of lessons on what it takes to operationalize social protection in fragile, war-torn Yemen. It is not just a great collection of practical issues (on institutions, reporting, targeting, etc.), but a thoughtful account from first-hand experience of the author’s engagement in Yemen over the years. For the Bank, such engagement has also be pivotal for re-examining procedures in contexts with limited state capabilities: “… for the first time in the World Bank’s history, the proposed grants were to be made out of the country’s IDA resources (…) without government acquiescence”. An IDS working paper by Ulrichs and Sabates-Wheeler has a nice discussion on the rationale for connecting humanitarian and social protection spheres (see p.10-11), as well as on key strategic areas for the future (I particularly enjoyed the ‘political economy of multi-stakeholder collaboration’). In another IDS paper, Roelen et al provide an overview of the use of cash transfers along three different lines, namely as long-term support within social protection systems; as immediate and short-term support as part of humanitarian assistance; and as a key component in scaling up social protection provision and coverage in the event of large-scale emergencies, or smaller-scale, micro-level shocks.
Some juicy cash materials from UNICEF and the Transfer Project. A presentation by Kajula investigates the impact of cash transfers (PSSN) on violence against children and youth in Tanzania. Emerging findings seem to indicate that the PSSN, including both CCTs and “cash plus” graduation components, have increased formal help-seeking against violence, but not reduced its level. What about cash transfers and child nutrition? Another presentation by De Groot and Yablonski evaluates the impact of Ghana’s LEAP on several nutritional dimensions: results are in line with existing evidence, indicating positive impacts on household food consumption, and modest impacts on women care practices, and no impact on health environment (see also slide 23 for a cross country comparison).
A couple of new materials on targeting. A working paper by Sebastian et al develops a proxy means test for Sri Lanka based on 2016 household survey data and evaluates its performance for targeting benefits of the national Samurdhi program. The latter has a long history of limited performance and is based on self-reported income. Results indicate that switching to a PMT could considerably improve the targeting performance of Samurdhi in terms of undercoverage, leakage, eligibility, and poverty impact. However, the PMT suffers when the coefficients are estimated from samples smaller than 1,000 households, see figure 3 p.15 (the analysis does not find a similar loss when the model, with adequate sample, is estimated from seasonal data). Valli has a new paper on targeting in the Ethiopia PSNP (see also brief here). Although based on slightly old data (i.e., last two rounds, 2004 and 2009, of the Ethiopian Rural Household Survey), findings suggest an overall improvement in targeting, especially for public works. For example, higher wealth (proxied by livestock holdings) in 2009 has a strong negative association with participation in public works. In addition, political connections correlate positively with public works participation in 2004, but no longer appear to play a role by 2009.
More fireworks on cash transfers! A JPM article by Profti et al on cash and labor supply in Africa is now online. The authors estimate how effects on labor change in relation to transfers of different size. They find switches from wage to self-employment (own farm labor) occurs at lower levels of transfers for labor-constrained households, and at higher levels for non-labor constrained ones. (See also the earlier article on Labor shared last Summer). Peachey reflects on gender and cash transfers. She notes that targeting women as cash recipients may or may not exacerbate intra-household tensions, increase the risk of gender-based violence, reinforce gender stereotypes, or increase the workloads of women.
Rich bonus: have great question to test on a large dataset? The Transfer Project has made available the core data files on the Kenya OVC and Lesotho’s CHP. The Red Cross released here a summary report and video recordings from the Cash Conference (September 13, London); also, check out the Cash Hub platform which includes an evaluation of cash responses in the British Virgin Islands; and mark the upcoming CaLP Cash Week, 15-19 October.
Shanta Devarajan is optimistic about the future of inclusive growth and social protection. His FD blog on two new flagships on jobs and technology – namely the Pathways for Prosperity Commission report on inclusive growth and the Bank’s WDR2019 – vividly captures the spirit of the publications. He notes that “… while they don’t emphasize the heightened concern about inequality as the main backdrop, both reports are in fact addressing the consequences of technology for inequality”. Some select quotes on WDR in particular: “… the WDR says that the changes brought by technology require governments to reform their social protection programs towards one that is more universal, and better adapted to the modern world”. Also, “… the WDR calls for a new approach to social protection: start with a guaranteed minimum level of social assistance that prioritizes the poorest, but progressively expand toward universal coverage, regardless of employment status. This program would then be complemented with a social insurance program that, too, would be independent of employment status, and would be progressive (premiums for the poor would be subsidized). These programs would facilitate the adoption of productivity-enhancing technologies while protecting citizens from the risks associated with these transitions. They would also bring previously excluded groups into social assistance.”
The UN-DESA unveils its thinking on social protection – and it does so with a comprehensive report. This not only looks at social protection with a life cycle lens, but integrates it with insightful considerations around migration, urbanization, and disability, among other themes. It also seamlessly covers high and low-income countries, and discusses the full spectrum of social protection instruments. Importantly, the report underscores that, in line with the above-mentioned WDR, universality and targeting can be complementary concepts: “… even in a policy framework grounded in universalism, certain segments of the population face greater challenges than others in overcoming poverty and social exclusion. (…) Complementary special or differentiated measures may be necessary—even if only temporarily—to help those groups to overcome the challenges they face and achieve universal coverage” (p.114).
Since I mentioned disability, Schojedt has compiled a very useful annotated bibliography on social protection and disability including, if I counted correctly, 137 titles on the subject presented with handy links and summaries.
A short piece by Razin and Sadka discusses the welfare state and globalization (see full NBER paper). They argue that aging tilts the political power balance in the direction of boosting a capital-income financed welfare state, and that immigration is crucial for the welfare state survival given demographic-driven pressures on the workforce. Speaking of power and politics, an ESID working paper by Golooba-Mutebi and Habiyonizeye explores how Rwanda’s political system shapes service delivery and outcomes in the health sector. They argue that given Rwanda’s dominant political settlement, the short- to medium-term prospects of the current government losing power to opposition rivals are slim. Consequently, there is no pressure on the government to deliver on popular expectations or suffer electoral defeat.
Finally, news from the news: it has been argued that digital IDs in Africa could boost growth “… as much as Chinese-built roads”. Roughly 20,000 low-income DC residents are not taking advantage of the EITC. Why? Lack of awareness (low-income people not filing taxes may be unaware that filing can get them money in return), people who believe they owe back taxes might steer clear of tax forms, and some tax-preparation services charge fees based on the number of tax credits a filer receives (those charges can add up to hundreds of dollars, discouraging low-income residents from filing).