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Month: June 2018

June 1, 2018 (links edition #59)

A new paper by Kagin et al documents the synergies between social protection and agriculture in Malawi (h/t Luca Pellerano). In particular, it outlines the complementary nature for the sectors and estimates their income and production multipliers: for example, each MK transferred through the Social Cash Transfer program increases total real income by 1.88 MK, while multipliers of public works are between 2.9-3.24 MK. See also a policy brief here.

More on social protection in Africa: in Niger, Annan and Sanoh show that non-poverty status declines remarkably when exposed to extreme shocks (with reductions between 31 and 48 percentage points). In response, engaging in migration as a coping mechanism leads to worse household outcomes. This result can be explained by theories of asymmetric information between migrants and their families, and unfavorable labor market conditions at migrants’ destination. Importantly, social assistance provided seasonally significantly reduce the impact of shocks on households’ consumption and vulnerability. Since I mentioned migration, a note by Clemens et al distill 7 circumstances where migration challenges were turned into opportunities, such as when migrants created jobs and raised incomes, filled labor market needs, improved service delivery, reduced irregular migration flows, and sparked economic multipliers.

A couple of resources on basic income. Political Quarterly has just published a series of papers devoted to Tony Atkinson’s Participation Income — see Stirton’s introductory article. Behrendt and Nguyen have an interesting review of approaches to adapt social protection to changing labor markets, including through a combination of contributory and non-contributory mechanisms (h/t Will Wiseman). The paper’s section 4.2 is rather critical of UBI, especially when set at modest levels. Apparently anything in the news that is unconditional is equated with UBI: California’s latest pilot in Stockton adds to the string of experiments dubbed as UBI, but which are not really so (h/t Marco Shaefer). Bonus on the US: Ravallion is co-authoring a forthcoming NBER paper, “Social Protection and Economic Development: Are the Poorest Being Lifted-Up or Left-Behind”, coming out on June 4. The sneak preview shows that the US floor provided by SNAP has been steadily declining over time.

Having a bank account doesn’t mean using it. Goldstein blogs about an experiment by Dupas et al showing that the poor would open bank accounts when offered to do so, but don’t necessarily use them. Two explanations emerge.  First, people are too poor. For example, in Malawi individuals are reporting expenditures of $15 per month, with Uganda coming in at $32. The second explanation is the need for liquidity and easy access to cash: for instance, 97 percent of people in Uganda report keeping cash at home. BTW, Harvard’s PDIA has the first of its practice note series out (on budget reform in Mozambique).

Arezki et al have an interesting working paper on another relevant trend in Africa, that is, farmland globalization (sometimes less elegantly referred to as ‘land-grabbing’). Under the practice, international investors directly acquire large tracts of agricultural land in other countries. As of June 2016, there were 2,152 such deals, with a cumulative size of 58.4 million hectares in 88 host countries worldwide. This roughly corresponds to an area the size of France. The authors show that international farmland investments are on the aggregate likely motivated by re-exports to investor countries rather than to world markets. In other words, they increasingly emerge as a domestic food security strategy in investors’ home countries. Talking of food security, check out the illuminating graph on p.76 of a new DIME report visualizing the messy household pathways in and out of different food security categories over time.

Let’s move to social protection in humanitarian contexts. An insightful CDG brief by Knoyndyk argues that humanitarian reform efforts have focused too much on enhancing coordination without realigning funding incentives. Also, those same incentives are now disrupted by wider use of unconditional cash programming, impartial and comprehensive needs assessments, and country-based pooled funds. At the same time, the paper acknowledges that disrupting the traditional humanitarian business model holds risks that must be managed carefully. A report by Bennett similarly calls for ‘constructive deconstruction’ of the system (see also a new collection of ODI papers on the matter). As part of the “Improving the Uptake of Humanitarian Market Analysis” project, a group of NGOs – IRC, CRS and Mercy Corps – teamed up to better use market information in programming: a synthesis paper with lessons from Niger, Nigeria, and Uganda is now available. A CaLP paper by Gordon explores key issues constraining progress in measurement and reporting of humanitarian cash transfers – see p.42-43 for short and medium term recommendations.

Finally, an assortment of pieces on finance and behaviors (h/t Jonathan Morduch): Brynjolfsson interviews Kahnemann about algorithmic decision-making and AI; the new US Survey of Household Economic Decision Making reports that 40% of Americans can’t cover a $400 emergency expense; a piece on Gugerty and Karlan on collecting and using data rather than stories; and Basu’s views on the value of Findex data.