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April 6, 2018 (links edition #51)

The State of Social Safety Nets 2018 report is out! Drawing from the World Bank’s ASPIRE database, the third edition of flagship provides a rich quantitative description of the social assistance landscape. Among the highlights, it finds that safety nets are now ubiquitous – about 80% of the countries provide school feeding programs, 70% have unconditional cash transfers, 67% implement public works, and 43% introduced conditional cash transfers. The impact of social assistance programs is also sizable – that is, they reduce the poverty gap by about 45%, and 36% of people escape absolute poverty because of safety nets. Global spending averages about 1.5% of GDP, while coverage in the poorest countries is limited: in low-income countries, 82% of households in the poorest quintile receive no transfer, while more than half of the bottom 20% is uncovered in lower middle income countries. Transfers as a share of the poor’s income/consumption are low, i.e. 13% and 18% in LICs and LMICs, respectively. The report comes with two nice special chapters devoted to aging and adaptive social protection. Video of this week’s report launch is available here.

Since I mentioned public works, a new review by McCord takes stock of the evidence on social protection and employment (h/t Fazley Mahmud). In particular, it sets out an array of lessons drawing from thematic case studies, namely social protection and graduation (Bangladesh, Philippines and Peru), intersectoral approaches (Chile and Mexico), activation (Colombia), and public works (India, South Africa). It somewhat ends on a cautionary note (“need for realism”) on the role of social protection in addressing labor market challenges, while calling for wider-scale social protection provision to form a basis for complementary interventions (see webinar here). A working paper by Cho and Ruthbah find that in Bangladesh, public works (Employment Generation Program for the Poorest) have contributed to increasing overall household consumption, investments in heath, and reducing outstanding loans. However, they also call for more research on the value of infrastructure built, implementation efficiency of the work projects, and the impact on human capital and future employment. Given these gaps, the authors conclude that the paper “… is therefore inconclusive whether the workfare would achieve the same objectives as efficiently as unconditional cash transfer”.

Speaking of efficiency, Calderon et al examine the evolution of fiscal space in Sub-Saharan Africa, including in terms of 8 indicators covering countries’ fiscal sustainability, balance sheet vulnerability, and external and private debt position. They found that, breaking with history, countries had countercyclical fiscal measures thanks to fiscal space built in the run-up to the 2008-09 global financial crisis. However, these efforts reversed as commodity prices plunged in 2014-16, which resulted in narrower fiscal space for most countries in the region.

From Africa to LAC, where the developmental effects of medium-size cities can be significant. To explore the issue, Berdegue and Soloaga study how proximity to cities affect population growth and welfare in rural Mexico. Using data for 2000 and 2010, they show that 75% of rural people live within 90 min of an urban area, and proximity to a city increases rural population growth and welfare. Adverse effects on rural areas are very small, and cities with populations in the 350,000–500,000 range appear to have more positive effects on rural areas than smaller or larger cities.

A couple of analytical papers on resilience. A Disaster piece by Mochizuki et al presents an integrated framework connecting risk drivers and coping, adaptive, and transformative capacities. In a WD article, Quandt proposes a new measure of resilience, the Household Livelihood Resilience Approach (HLRA). Drawing from the sustainable livelihoods approach and it’s five capital assets (an approach also utilized by Zurich Insurance Group and IFRC), the HLRA helps visualize results and identify specific actions to build resilience. These are illustrated in an empirical case study on Isiolo County, Kenya. Bonus on crises: in a VoxDev video, La Ferrara outlines four ways to improve state functionality in fragile environments.

Has global inequality increased or decreased? The answer is somewhat ‘both’. Hammar and Waldenstrom summarize it in few words: since 1970, inequality has fallen between countries, but grown within countries. The latter rose by 5 Gini points, while between-country inequality fell by 15 points, leading to the combined effect of a 10-point fall in total inequality. The largest contributing factor to such decline is the earnings growth in Asia. These results are generally consistent with new research by Kharas and Seidel pointing out signs of convergence, i.e., poorer countries, and the lower income groups within those countries, have grown most rapidly in the past 20 years. They don’t find evidence that the poorest people are being left behind, nor that the richest are taking all the income gains.

A final jump, one from inequality to mobility: can regular migration channels reduce irregular migration? In a CGD brief, Clemens and Gough provide evidence that lawful channels for migration between Mexico and the United States have suppressed unlawful migration, but only when combined with robust enforcement efforts.


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