Let’s get the facts right: we know that the war in Ukraine is accelerating food price inflation (the food price index is at the highest level ever recorded). We also know that such increases are possibly having, as pointed out by Barrett, adverse effects on about half of the world’s population. What we don’t know is how governments are responding with social protection… until now! Our brand-new tracker helps fill such gap by documenting how governments are using social protection to mitigate price shocks. The tracker provides key information on 84 countries and 221 social protection schemes. Headline message? Not what many would like to hear: almost 80% of the response comes in the form of subsidies, with cash (mostly unconditional) and food transfers accounting for less than one-fifth of responses. Among subsidies, we distinguish between 4 types (food, energy, fertilizers, and fees) and 17 subcategories. Guess which type of subsidy is most widely used? Will let you discover it… see table 2, p.5. As for Covid and Ukraine displacement trackers, expect this “living paper” to be updated regularly!
More on the global implications of the war: Blanchard and Pisani-Ferry offer a rich analysis around the economic ramifications for the EU, including various considerations on fiscal and monetary policy (with interesting discussion on tax and transfers, see p.13) (h/t Giuseppe Zampaglione)
Let’s stay in the region: Crossley et al have a fascinating paper on transfers in Covid times in the UK. Based on a survey two findings stand out: first, people tend to provide informal transfers to each other; but during 2020, the share of individuals making transfers “rose and fell” with lockdowns and restrictions (see figure 1, p.5). The paper then poses a hypothetical question on how respondents would use a £500 transfer. Caveat: a random subset of individuals was told that all households would receive the same payments (a ‘public windfall’ scenario). Results? The marginal propensity to consume was 11% higher in the public windfall case! Information and psychology matter…
Zooming into South Asia, new analysis by Bhalla et al found that India’s food assistance helped mitigate the pandemic: “… [e]xtreme poverty was as low as 0.8% in 2019, and food transfers [ensured] that it remained at that low level in 2020. Post-food subsidy inequality at .294 is now very close to its lowest level 0.284 in 1993/94”. On the same country, but based on pre-pandemic data (2011-14), Kundu and Cabrera show that programs like public works, cash and inkind transfers “… play a significant role in reshaping income distribution by reducing poverty and inequality”. Bonus: Ravallion has a blog on new estimates of poverty in India since 2011.
Speaking of food assistance, a new paper by Raju and Younger on the cost-benefits of public schooling in Ghana shows that, when ranked according to measures of schooling and learning, school feeding has a benefit-cost ratio of 3.3, which is quite high in principle, but not in the first tier of interventions (see table 6, p.35).
But that’s not all for Ghana: an article by Otieno et al investigates the relationship between cash transfers, the uptake of health insurance, and supply-side readiness: in areas “… with the highest service availability and readiness are 18 percentage points more likely to enroll in NHIS because of LEAP 1000, compared to program effects of only 9 percentage points in low service availability and readiness areas”.
Moving to LAC, Madeira tackles a difficult question: what’s the impact of the Chilean (social) pension withdrawals during the pandemic? He finds that such practice may decrease future savings rate by 1.7%.
From one health crisis to another: what are the effects of conditional cash transfers on the so-called “neglected tropical diseases”? A systematic review (but only including 11 studies) by Ahmed et al finds positive effects in reducing leprosy, schistosomiasis, and soil-transmitted helminthiasis, especially among the poorest. Bonus on health: a lit review by Kruk et al examined the evidence for structural reforms in health and education. Among the ways to address various deficiencies, the authors call for empowerment of beneficiaries to “… demand quality care from health and social systems”.
More on cash transfers, but on a key design choices: do larger transfers improve longer-run outcomes more cost-effectively than smaller cash transfers? A blog by Kondylis et al distills key findings from their previous paper and argues that “… the average complementary intervention was 5-43% less cost-effective at increasing consumption than the average unconditional cash transfer at the average evaluated time horizon (1.5 years for UCT and 2.6 years for TUP)”.
From complementarities to partnerships: a new paper by the ILO, FAO and UNICEF provides a nice collection of practices to device “the what” (p.40) and “the how” (p.62) of collaborations. And I really liked box 11 on open debates, box 16 on Malawi, and box 20 on Vietnam (tho I suspect that it’s more debatable that IFIs “… have a stronger focus on the short term and are less engaged in long-term planning and support to countries”, p.69).
Kiosk announcements! Yesterday was my 20th work anniversary, prompting 20 reflections on the journey so far; Stefan Dercon, a living legend, blogs about his new book, “Gambling on Development”; and on May 10 (10am ET), a CGD-Georgetown event will host Blattman and Cronin-Furman discussing the former’s book, “Why We Fight”.