SPectrum 23879 S o c i a l P r o t e c t i o n T h e W o r l d B a n k W i n t e r 2 0 0 2 Protecting People with Social Safety Nets Social Protection is a collection of measures improve to or protect human capital, ranging from labor market interventions and publicly mandated unemployment or old-age insurance to targeted income support. Social Protection assist interventions individual, households, and communities manage to better the risks that leave people vulnerable. Cover Photo: Lotte Lund Contents When the Present is at Stake Governments and financial institutions can play an important role in helping households manage daily risks and cope with losses when they occur. 5 Quid Pro Quo 8 Responding to the Crisis in Korea with Public Works 9 Slimming Down Consumer Food Subsidies 10 Linking Micro-finance and Safety Net Programs to Include the Poorest 12 Safety Nets in Very Low Income Countries 13 Response to a Crisis ­ and Beyond Colombia's economic downturn sparked a social reform that looks to the future. 15 How Familias en Acción is Helping the Poor and Vulnerable 17 The AIDS Orphans Crisis: The Need for Collaborative Action A recent conference sought to promote awareness of the extent of this crisis and to probe the role of social protection in implementing a balanced response. 19 Protecting Investments in People: Social Safety Nets are Central to Poverty Reduction 23 About the World Institute 24 Globalization at Work 25 On Target in Armenia In a country where half the population lives below the poverty line, it has taken unusual political courage to replace a Soviet style social assistance system with a single family benefit strictly targeted at only the poorest of the poor. 27 IT Improves Social Safety Nets 31 SPectrum's Resource Guide 32 A New Safety Nets Primer from the World Bank 32 A Toolkit for Assessing Social Safety Nets 34 The Poverty Reduction Strategy Sourcebook 34 Poverty on the Map 35 Social Safety Nets on the Web 36 The Safety Nets Team 36 Human Development Under New Leadership As part of the World Bank's Human Development Network, the Social Protection Team welcomes the appoint- ment of Jozef Ritzen as Vice President of the Network as of July 1, 2001. As Vice President for Development Policy of the Bank's Development Economics Group for the past two years, Jo provided effective leadership in Notes bringing together our knowledge of the best development practices and in helping our operational vice presi- dencies apply this knowledge in support of our clients. Jo's pre-Bank experience, especially as Minister for Education, Culture and Science for the Government of the Netherlands, also makes him well qualified to lead our efforts in the overall area of human development. News 10 Things You Never Knew About The World Bank SP A new World Bank brochure makes it clear how dramatically the institution's priorities have changed over the last two decades. In 1980, investment in the power sector accounted for 21 percent of Bank lending. Today, that figure is down to 5 percent. In contrast, lending for health, nutrition, education and social protection has grown from 5 percent in 1980 to nearly 25 percent today. 10 things you never knew: 1. The World Bank is the world's largest external funder of education. 2. The World Bank is the world's largest external funder in the fight against HIV/AIDS. 3. The World Bank is the world's largest external funder of health programs. 4. The World Bank strongly supports debt relief. 5. The World Bank is one of the largest international funders of biodiversity projects. 6. The World Bank works in partnership more than ever before. 7. The World Bank is a leader in the fight against corruption worldwide. 8. Civil Society plays an ever larger role in the Bank's work. 9. The World Bank helps countries emerging from conflict. 10. The World Bank is listening to the voices of poor people. For more information or how to obtain a copy of the brochure, please write to The World Bank 1818 H Street, NW Washington, D.C. 20433 USA Or send an email to: feedback@worldbank.org 2 Welcome Dear Reader, In this issue, we focus on the ways in which the World Bank helps our client countries develop social safety net systems through both lending and technical support. We hope to illustrate the growing importance of social safety nets and introduce you to new tools the Bank is making avail- able to policymakers. Because many countries prefer not to borrow for safety nets, the World Bank's role as "knowledge Photo: Robert Radifera bank" is particularly important. The Bank now offers an annual core course in the design and implementation of social safety nets in Washington, D.C. And, as the World Bank is fast becom- ing a world leader in distance learning by using the latest communication technology, we are now also able to train people in their regions via satellite transmitted courses. It is fascinating to watch presenters in Washington interact with students in Argentina and Costa Rica to the benefit of both. Examples of social safety net reforms where the Bank provided both technical assistance and lending will give you an idea of the political vision and courage social safety net reforms require. In the case of Colombia, we show how the government responded when the country went through its worst economic downturn in 60 years. A team made up of representatives from the Government of Colombia, the World Bank and the Inter-American Development Bank combined a short-term response to meet the country's immediate needs with long-term strategic planning, crafting reform that will secure Colombia's social safety nets in the future. In Armenia, this former member of the Soviet Union and now one of the world's poorest countries has led the way in the Caucasus region in reforming its social assistance system into a single family benefit that targets the country's poorest people. The simple point we hope to make in this issue is that social safety nets should not be considered a luxury item only developed countries can afford. Well-designed and well-targeted safety nets are good investments that raise living standards and promote social cohesion. Social safety nets can also help prevent irreversible losses among poor people during hard times. It is in every country's best interest to support social safety nets because societies need educated, healthy, income-earning citizens in order to grow. Please enjoy your reading. Yours truly, Robert Holzmann Director Social Protection 3 4 When the Present is at Stake by Margaret Grosh, John Blomquist and Yisgedullish Amde "When the present is at stake, the future can be waivers for health care services or for heating in cold cli- sacrificed" from Voices of the Poor, from Indonesia mates. Informal (private) safety net arrangements are also important in protecting household income, and Risks are part of everyday life. But the impact on the must be considered in the design of formal mechanisms. poor and other vulnerable groups, such as the elderly Cash and food transfers between households are impor- and disabled, are often more immediate and threatening tant in many regions; labor exchange is common in sub- than those faced by others in society. These risks can be Saharan Africa; and zakat -- charitable giving expected either household (i.e. illness, disability or death and of every able Muslim adult -- is important in many unemployment), community or regionally based (i.e. Islamic countries. floods, famine) or nationwide (i.e. drought, global financial risks, shifts in terms of trade). The adverse Safety nets mostly transfer income in one way or anoth- effects of these risks will be far more damaging to the er to needy people. In contrast, social insurance pro- poor than those better-off in terms of income, physical grams, such as contributory pensions or unemployment and mental well-being, and long-term human develop- insurance, are largely related to earnings and need not ment. For poor people, lost income may force them to include any transfers (though many schemes do contain sell their land, their livestock or their tools, send their an element of cross-subsidization). Social insurance pro- children to work rather than to school, or eat less. grams help households manage risk, but before the fact. These drastic measures may help families survive from Safety nets take up the load where households cannot day-to-day, but they will make it that much harder for participate in social insurance schemes or when the ben- these families to escape poverty in the future. efits from those schemes are exhausted. Governments and international financial institutions can The Role of Safety Nets play an important role in helping households manage Safety net programs have two key functions in economic daily risks and cope with losses when they occur. The policy. Their traditional role is to redistribute income notion that safety nets should be a permanent feature of and resources to the needy in society, helping them to social policy and not simply a temporary response to cri- overcome short-term poverty. A more recently identified sis is increasingly being embraced by the international role for safety nets is to help households manage risk. development community. But, even when a country Safety nets can increase options for the poor. Knowing prospers, some households will face hard times. During that safety nets exist can allow households to take initia- economic downturns, such as the Asian financial crisis tives that incur some risks, but bring potentially higher and recent crises in Latin America, problems are much returns, such as growing higher yield varieties of crops more serious and immediate and the appeals for public and using modern farming methods; concentrating action undeniable. household labor on the highest return activities rather than working in many separate informal activities; hold- What are Safety Nets? ing assets in more productive, but less liquid ways than Safety nets are formal and informal measures that pro- cash under the mattress. When hard times do hit tect people from the worst effects of low income and households, safety nets reduce the need to make hasty poverty. The social policy aspect of safety nets is con- decisions that will diminish the chances of escaping cerned primarily with formal programs designed to pro- poverty in the long run. vide or substitute for income. These include cash and in-kind transfer programs, subsidies on basic goods (especially food and energy), labor-intensive public works programs to help poor people earn income, and targeted human development programs. Also included nush are means to ensure people's access to essential public Cher y services, such as school vouchers or scholarships, fee Ka Photo: 5 At the national level, away from household worries, increased open unemployment. This was the case in effective safety nets can also contribute to society's Mexico's devaluation or so-called "Tequila Crisis" which choice of effective policies in other areas. They can began in 1994 and, thus, both the short run safety net broaden support for sound fiscal and trade policy, as established then and several subsequent long term pro- well as allow the design of other social sector policies grams emphasized continuing or establishing access to and programs to concentrate on efficiency rather than the social services needed by the working poor. equity goals. For example, if sound safety nets are in place, the pension program can focus on improving the Countries will need a blend of safety net programs, efficiency of providing benefits to contributing workers because each option covers some risks and groups better rather than finding ways to provide cash transfers to than others, each requires different administration and those who have not made adequate contributions. factors into the political economy of social policy differ- ently. The safety net as a whole should provide coverage What is the Right Safety Net for a Country? to three rather different groups: There are no universally accepted recommendations for deciding which social safety net is best for a particular The chronic poor ­ even in "good times" these house- country. Considerations vary and countries will have to holds are poor. They have limited access to income and seek the right balance based on three factors: the instruments to manage risk, and even small reduc- tions in income can have dire consequences for them. Safety nets' place in social policy. Policymakers must consider what the main sources of risk are in the econo- my (especially those faced by the poor) and how public action can be most effective in helping households man- age them. Some actions will have nothing to do with safety nets -- sound economic management will reduce the risk of economy-wide crises, loss of assets and unemployment; irrigation and research, devel- opment and extension supporting drought resist- ant crops will reduce the risk of poor harvests; health, disability and old-age insurance will reduce the risk of loss of income. Broad and effective health and education systems will help the poor improve their skills and productivity and financial services for the poor will help them to build and safeguard financial assets. But these will not be enough to prevent all risks and their side effects so safety nets will be needed to help people cope with emer- gencies when they occur. The right mix of programs. Within the set of safety net measures, it is important to get the right mix of programs. This will depend on the mix of risks, vulnera- ble groups and institutions within a spe- cific context. In some countries, for example, recessions drastically raise unemployment rates and self-targeting labor-intensive public works programs, such as building or maintaining roads, can give unemployed people a way to earn income while creating useful infra- structure. (Argentina and Korea chose this policy in their responses to recent crises). In other countries, recessions result in falling wages rather than 6 The transient poor ­ this group lives near the poverty nent as well as transfers. The range of targeting out- line, and may fall into poverty when an individual comes associated with good programs observed in prac- household or the economy as a whole faces hard times. tice is that 60 to 80 percent of program benefits reach the poorest 40 percent of the population. A great deal Those with special circumstances ­ sub-groups of the more such information about "good practice" is avail- population for whom general stability and prosperity able covering many kinds of interventions and many alone will not be sufficient. Their vulnerability may aspects of them. stem from disability, discrimination due to ethnicity, displacement due to conflict, "social pathologies" of Safety Nets in World Bank Operations drug and alcohol abuse, domestic violence or crime. The World Bank helps to improve the safety net systems These groups may need special programs to help of developing countries through technical assistance, them attain a sufficient standard of well-being. knowledge dissemination and direct lending. About 100 active projects contain elements of a safety net cov- Effective programs. Regardless of the mix of programs ering many regions and types of interventions. Most of used, each should be cost-effective in its own right, with these support safety nets in a broader intervention for appropriate benefit levels, administrative systems and poverty alleviation, human development or reform pro- targeting mechanisms. Indeed, there is broad consensus gram. A much smaller number of operations each year about "good practice" with respect to these characteris- focus on safety nets alone. The size of this portfolio of tics, much more so than with respect to the appropriate safety nets projects varies markedly from year to year. For mix of programs. example, it quadrupled in number in the wake of the Asian crisis and then fell back to normal levels a year later. We know, for example, that effective design features of a labor-intensive public works program include setting The World Bank's role in knowledge management is a par- wages at or below the effective minimum wage for ticularly important contribution for safety net develop- unskilled heavy labor to ensure good self-targeting; that ment across a broad spectrum of countries and contexts. the works should be justified in their own right; and that Safety nets are a theme of dialogue in a score of coun- works that will benefit the poor in the long run will tries each year, often being one among many themes in improve the poverty reduction impact. poverty assessments or poverty reduction strategies. Or safety nets may get more focused attention. In the past For food subsidies, effective design requires choosing a year, the World Bank Latin American Region has sup- commodity that is more likely to be consumed by the ported several countries in a series of broadly comparable poor than the rich and which has a marketing chain that assessments of risks and safety nets programs. In other makes it easy to apply the subsidy. Even so, errors of countries, analytic work is customized and focused on a inclusion are likely to be relatively high, though errors of specific theme. In Thailand, program administration and exclusion may be low. coverage is the focus of current work; in Ukraine, a piece zeroed in on targeting just finished. The World General rules of thumb can be used to judge program Bank maintains ongoing research and training programs efficiency. Administrative costs above 10 to 15 percent on the subject as well, and actively participates in the are usually a sign of inefficiency of one sort or another international dialogue on safety nets, partnering with unless the program is a pilot not yet brought to scale, in other organizations working on the issue, and sharing its a start up phase, or includes a heavy counseling compo- knowledge with outside agencies. Types of Interventions with World Bank Projects* Projects with Safety Nets Related Activities nemark Cart *Note: Projects might have more than one type of intervention. Cur Photo: 7 Quid Pro Quo by Margaret Grosh Experience with Conditional Cash Transfers are a type of social safety net targeted to poor households who, in order Conditional Cash to get benefits, have to fulfill a set of conditions -- usually a standard number of preventive health Transfers in Latin care visits for children under five and enrollment in school and good attendance for school-aged chil- America gives hope dren. Large programs of this nature have been established and evaluated in Mexico and Brasilia for the future (school portion only) and new programs have been or are about to be launched in Honduras, Nicaragua, other parts of Brazil, Ecuador, Colombia, Jamaica and, most recently, Turkey. The programs are targeted to poor families, usually with a proxy means test, and, as in Mexico, Colombia, and Nicaragua, are sometimes restricted to poor districts identified with a poverty map (see p. 35). In order to deter- mine how well-off a household is, proxy means tests calculate a score using a handful of easily observable house- hold characteristics. Entry into various programs or the benefit levels are decided based on the household's score. The indicators and weights in the scoring formula are the result of a sophisticated statistical analysis of national Photo: Lotte Lund household survey data. The indicators include location and quality of housing, ownership of durable goods, features of household demographics, human capital and sometimes labor force activity. Experience in Latin America proves that conditional trans- fers can be highly effective social programs. Mexico's PRO- GRESA program increased primary enrollment rates by about one percentage point from a base of 90 percent for boys and 94 percent for girls. Secondary rates increased by eight percent for girls from a base of 67 percent and went up five percent for boys from a base of 73 percent. Prenatal A group of fathers in care in the first trimester rose eight percent, the incidence Brazil whose families of disease among children under five was reduced by 12 percent. Preliminary evidence shows that Brasilia's Bolsa receive cash benefits for Escola program participants have lower dropout rates than non-participants. The numbers declined from 5.6 per- sending their children to cent to only 0.4 percent. Higher promotion rates mean that 80 percent versus 70 percent in the past are more like- school. ly to enter school at the right age and have similar learning outcomes. Conditional Cash Transfers Pros: Cons: Bottom Lines: Tie together short run assistance Most poor children already get A new and increasingly popular and long run human capital for- primary education and many get element in safety nets programs. mation to help break the inter- health care and secondary edu- Best suited to settings where generational cycle of poverty. cation, so the cost per child of poverty is chronic and human Ensure families are proactive in bringing new children into the capital outcomes low despite seeking their own welfare. system is high. efforts to provide extensive and Add a demand side tool to help Usually exclude poor families good quality services. obtain desired health and educa- without children in the right age Require significant administrative tion sector outcomes. range. capacity for targeting, for verifying May address gender issues by Require good physical access that conditions are met, to get giving greater incentives to girls and quality of services to ensure transfers to individuals and to and/or by making mothers the human capital development. coordinate among the several recipients of the cash. agencies (ministries of welfare, health, education, planning, local government) and many local agents of each (clinics, schools, municipalities, banks). For more information on PROGRESA, please visit their website at: www.sedesol.gob.mx/progresa/progresa.htm For more information on Bolsa Escola, please visit their website at: www.mec.gov.br/home/bolsaesc 8 Responding to the Crisis in Korea with Public Works by John Blomquist Public works are government-financed programs that provide short-term cash transfers to the able-bodied poor while developing needed physical infrastructure. The programs typically provide low-wage temporary jobs in labor-intensive activities, and can be initiated or expanded into economically depressed areas in need of roads or other infrastructure. They can thus be well-suited to responding to short-term poverty resulting from crisis conditions. An example of public works in action can be drawn from Korea's experience following the recent financial crisis. The crisis had strong effects on Korean society, and they occurred quickly. Within the space of a year after the initial signs of the crisis became evident, Korea experienced a 4.3 percentage point increase in the unemployment rate trans- lating into 1.5 million jobless individuals. The headcount poverty ratio jumped from 3 percent in the last quarter of 1997 to 7.5 percent in the third quarter of 1998 among households headed by workers in urban areas. One of the most effective short-term poverty alleviation measures was the re-establishment of a temporary public works program. The program was launched in May 1998. It provided temporary jobs to the unemployed, typically for three months or less, who performed a variety of labor-intensive tasks to build or maintain roads, develop parks and natural areas and help create other public infrastructure. The program wage was set at a level slightly lower than the prevailing market wage for unskilled labor to ensure that only those most in need would participate in the program. During the crisis, the market wage rate fell, and the public works wage was adjusted downward several times to maintain self- targeting to the poorest. Because the receipt of transfers is conditional on performing work (and the wages received are low), public works programs avoid the labor market disincentive effects of other unconditional safety nets programs. However, public works are not a good way to reach the most vulnerable and disadvantaged in society because participants must be able- bodied and young enough to engage in strenuous work. To help the more vulnerable individuals, Korea expanded its cash transfer program. The employment response to the public works program in Korea was significant. By January 1999, the program was pro- viding 437,000 temporary jobs at annual cost of about 2.1 trillion Won (US$ 1.6 billion). About 70 percent of the total cost was devoted to labor, making the program quite cost-effective by international standards. By the first quarter of 1999, nearly 2.5 times more people benefited from the public works program than from unemployment insurance. As the country recovers from the effects of the crisis, the government envisages gradually reducing and eventually phasing out the major crisis-era public works programs, but a public works component remains integral to Korea's new welfare scheme legislated under the Minimum Living Standards Security Act. The Korean experience illustrates some of the pros and cons associated with public works interventions. Pros: Cons: Bottom Lines: Self-targeting to the poorest if Can distort the incentives to A politically palatable safety the wage rate is set properly, labor market participation if the net instrument emphasizing cash- requiring no administrative wage offered is too high. for-work. targeting mechanisms. Are relatively costly as a poverty Best suited to temporary shocks Targeted to geographic areas and alleviation measure because the affecting able-bodied workers, times of particular need. ratio of the net transfers to bene- including slack agricultural sea- Used to create needed ficiaries to the total program cost sons or those in the urban infor- infrastructure. is typically low. mal economy. Can be started quickly,and Can be difficult to administer. Require adequate administrative scaled back quickly when the There can be a tradeoff between capacity to design and monitor economic situation improves. infrastructure development and the program and balance the poverty alleviation objectives. transfer of benefits with effective Typically reach able-bodied males, infrastructure development. and are inappropriate for the poor- est of the poor. 9 Slimming Down Consumer Food Subsidies by Setareh Razmara, Elizabeth Ruppert and Harold Alderman Consumer Food Subsidies are difficult to change. In many developing countries, including those of the Middle East and North Africa, consumer food Experience from the subsidies are a major part of social safety nets programs. Designs vary from country to country, but Middle East and North the subsidies are generally applied to a few foodstuffs, usually basic commodities that are a greater Africa can provide some share of the diet of poor people than of the non-poor. The fact that the non-poor can afford to guidance. spend more on food than the poor leads to the central conundrum about food subsidies -- they reach most of the poor and so have low errors of exclusion. But they give most of their benefits to the non-poor, that is, have high errors of inclusion. Consumer food subsidies tend to moderate food prices, and depending on how they are financed, they can counter- balance inflationary wage pressure and improve nutritional status due to increased food consumption. Their wide coverage makes them expensive and often fiscally unsustainable. Moreover, the distortion in prices they cause can engender a range of unintended effects such as misallocation of agricultural production toward products without comparative advantage, and black marketing or rent seeking by producers and distributors. Because of their broad reach and effects on both consumers and producers, consumer food subsidies can be politically difficult to change. For many years, reforms in the Middle East and North Africa had difficulty addressing these inefficien- cies, making only marginal adjust- ments with a few exceptions. Overall, untargeted food policies were largely preserved to further social goals and because of opposi- tion -- or the anticipation of it -- from consumers. In addition, progress has often been impeded by institu- tional players with vested interests. Therefore, the political sensitivities surrounding consumer food policies imply that the success of subsidy reform depends critically on the abil- ity to manage political pressures. Recent experience is somewhat better and a World Bank study of food subsidies in the Middle East and North Africa Region identifies a number of strategies available to tin governments to reduce political dis- Mar content resulting from food subsidy Jaime reform. The principal lessons are Photo: the following: Provide a Rationale for Reforms through Publicity. The public is more likely to accept a policy change if it under- stands the rationale, which can be communicated through advance publicity indicating the potential savings or tradeoffs. The government of Egypt, which learned from its reform mistakes in 1977, prepared the public in the 1980s by linking the cost of subsidies with the overall revenues from the Suez canal, in order to impress its mag- nitude upon the population. Similarly in Tunisia, which also has a history of violent protests to subsidy cuts, reforms in the 1990s were preceded by a public relations campaign that stressed the cost of the system and the alternative services -- such as the number of hospital beds -- that could be purchased using the same resources. Introduce Credible Policies to Protect the Most Vulnerable Groups. Broad coalitions of the poor and ideologically motivated groups can be built by introducing credible policies targeted to protect the most vulnerable groups. This can be done with schemes such as cash transfers which have a similar, or greater, impact on poverty than the food subsidies. Public acceptance is likely to be enhanced if the government introduces safeguards for the poor which are perceived to be equitable as well as credible. Credibility is greatly enhanced if these safeguards are in place when inefficient, but familiar programs are eliminated. Set an Appropriate Pace of Reform which is a Long-term Undertaking and Transparent. Reforms are difficult to implement rapidly. A gradual approach is therefore useful for publicizing the reform's rationale and introducing (or at least piloting) new targeted poverty programs before terminating more universal subsidies. It is important to time the subsidy reductions strategically so that domestic markets first confront world prices when they are low or declining rather than rising. Small price changes, to which households can adjust with minor budget adjust- ments, are favored because they do not provide a flash point for protest. However, repeated price changes can give the impression that the government has no plan or lacks the capacity to maintain its strategy. Thus, transparency and predictability of price changes and other measures are important to build the government's credibility. Separate the Government's Financier Role from the Market's Provision Role. Food policy objectives may be achieved more effectively by delivering income support without direct or indirect ties to food commodities. Reforms could separate income support from the consumption of particular commodities or the use of particular market channels. Separation increases flexibility, which can improve targeting and enhance the likelihood that transfers will lift the poorest beneficiaries from poverty. Setareh Razmara is a Senior Human Resources Economist; Elizabeth Ruppert is a Senior Country Economist; and Harold Alderman is an Advisor for Food and Nutrition Policy for the World Bank. Linking Micro-finance and Safety Net Programs to Include the Poorest The Case of Bangladesh's IGVGD By linking micro-finance to a social safety nets program, the Income Generation for Vulnerable Groups Development (IGVGD) program has successfully opened up economic opportunities for the destitute which are normally so hard to reach. The IGVGD is a collaborative food security intervention jointly led by the Government of Bangladesh, the World Food Program (WFP) and the Bangladesh Rural Advancement Committee (BRAC), Bangladesh's largest NGO. The program is built on a Government safety net program that provides free food grain for an 18-month period to destitute, female- headed households that are at the highest risk of hunger. The poorest generally remain outside the net of conventional micro-finance programs for several reasons. On one hand, successful micro-credit operations are careful to screen out potentially risky clients. On the other hand, the poorest people often self-select themselves out. They may not consider themselves to be "credit worthy" or may not feel they have enough resources to generate sufficient incomes to pay back the loans. Through its experience, BRAC discovered that it was difficult to include the poorest in its conventional micro-finance operations and was looking for another entry point to involve the destitute in its development activities. In the IGVGD program, the poor receive food grain relief assistance from the World Food Program to meet their imme- diate consumption needs. BRAC then adds skills training and savings and credit services to improve the recipient's potential for earning more with smaller than usual loans. Hence, when the cycle of free food grain ends, participants are able to engage in income-generating activities and become clients of regular micro-finance programs, earning at least the money equivalent of the wheat they received as relief assistance. The IGVGD program started as a pilot activity in 1985 and has since become a national program covering close to a million women. The overwhelming majority (about 85 percent) of IGVGD members receive training and support in rais- ing poultry and livestock, agriculture, fishery production, or the restaurant and grocery business. The women often already have some skills in these activities, and there is a ready market for such products. Two-thirds of the program participants have "graduated" from absolute poverty to becoming micro-finance clients, and have not slipped back into requiring relief assistance. An evaluation study of the program reveals that women who participated have benefited greatly from the program by increasing their incomes and their asset ownership. Women said that the provision of food grain under the IGVGD pro- gram allowed them to save money that would have otherwise been spent on food. The initial money they received as loans or their savings permitted them to start income-earning ventures. Having access to both food grain and loans at the same time allowed them to reinvest earnings into their business and make repayments. Raising poultry was the most successful activity; some women reinvested their income from selling chickens (or eggs) to buy goats, there- by increasing their earning potential. A few branched out into other activities, such as rice husking, petty trading and shopkeeping. Survey data over a five-year period (1994-1999) following participants from one year before entering the program to three years after "graduation" indicates a clear decline in landlessness and an increase in ownership of homestead land between 1994 and 1996. It is also interesting to note that the percentage of women begging to maintain a livelihood declined from 18 percent in 1994 to 2 percent in 1996 to none in 1999. Ownership of blankets and beds also increased over the five-year period from 14 percent to 25 percent and from 58 percent to 64 percent, respectively. BRAC's subsidy for both credit and training services amounts to US$15 per client. If one were to add in the cost of the 18-month food grain supply (US$ 120 at current prices), the total subsidy provided for each woman would amount to about $135. Both the government and donors feel strongly that this represents a small subsidy, given the over- whelming majority of IGVGD women who graduate out of a need for continuous handouts. Though the IGVDG program is deemed highly successful, there are some limits to its ability to be replicated. BRAC screens out about 10 percent of food grain recipients, often the very old and disabled who do not have good earn- ings prospects. And the range and profitability of enterprises that can be started by recipients with very little capital will vary from country to country. Moreover, program organizers caution that it is important to keep the relief and credit activities separate, ideally by having separate agencies carry them out in a coordinated fashion. This allows the micro-finance institution to maintain its financial discipline. For more information on the IGVGD, please visit their website at: www.brac.net. 12 Safety Nets in Very Low Income Countries by W. James Smith and Kalanidhi Subbarao What role, if any, should safety net transfer programs play in very low income countries, like Ethiopia, Nepal, Mali, Chad, Malawi and Niger? These countries exhibit some common characteristics: very low average incomes, a high proportion of the population below an absolute poverty line, limited revenues with which to finance transfer programs, pervasive dependence on subsistence agriculture, and growth trajectories that are not adequate to make a signifi- cant dent on the number of poor in the near term. The fundamental contradiction is obvious: the countries that need safety nets most are the ones that can least afford them. But the answer is not obvious: is there a "right" safety net strategy in such countries? A forthcoming World Bank Safety Nets Primer paper analyzes the issues and provides guidance on ways governments can strike a balance between the difficult trade-offs involved. In all countries, three factors determine the choice and scale of safety net programs: fiscal affordability, information, and administrative capacity. In very poor countries, these are also the binding constraints. Moreover, the actual growth records in these countries are often well below the minimum growth rates required to prevent an increase in the number of the poor. Under these circumstances, policymakers are understandably reluctant to divert scarce resources (both financial and administrative) away from growth-promoting investments to finance transfer programs. The paper argues that even in the poorest countries exhibiting the above characteristics and trade-offs, there is room for safety net interventions. However, how much expenditure is justified? Who are the truly vulnerable groups that cannot make do without assistance? What type of programs are to be financed? What targeting approaches are to be adopted? The answers depend very much on three considerations: (a) the degree of uninsured risk faced by the poor, (b) the feasibility of identifying the individuals, households and groups that are subjected to high levels of unin- sured risk, and (c) the depth and severity of poverty. For example, in much of the African sub-continent, AIDS, con- flict and pervasive tropical diseases have contributed to the emergence of orphans as a high risk vulnerable group. While not all orphans need a publicly funded transfer, careful analysis can help identify sub-groups within the larger pool of orphans that run a high risk of dropping out of school and can aid in the design a safety net intervention to prevent adverse welfare outcomes. The challenge in very low income countries is to find ways in which the choice of target groups and programs limits the total safety net budgetary cost while complementing longer term growth and human capital development. Clearly, the needs and possibilities need to be worked out on a country-by-country basis. However, a number of general prin- ciples can help guide the decision-making process in most very poor countries: Choose safety net programs that help lift longer-term impediments to growth and human resource development (for example, carefully designed workfare programs in off-peak seasons help consumption-smoothing of very poor households while developing much-needed infrastructure; transfer programs, such as school fee waivers, to orphans and vulnerable children to help maintain or improve school enrollments). Identifysub-groupsofultra-poororgroupsthatexhibitdistinctcharacteristicspredisposingthemvulnerability(e.g., street children, some categories of orphans in Africa and widows in rural India). Choose and/or design programs that have potential multiplier effects (e.g.,cash or fertilizer voucher programs to very poor farmers that can enhance agricultural productivity, food-for-education transfers to very poor families that can help enhance girls' enrollment). Determine timing of programs carefully; they need not be year-long to accomplish consumption-smoothing or enhance productivity. Given the administrative and information constraints,choose programs that are self-targeting; limit the number of programs operating in a country; keep design simple; and sustain programs over a prolonged period. Evaluate programs periodically to discover what works in a given country environment. W. James Smith is a Senior Economist and Kalanidhi Subbarao is a Lead Economist for the Africa Regional Unit of the World Bank. To request a copy of the forthcoming paper, entitled "What Role for Safety Nets in Very Low Income Countries?", please contact the Social Protection Advisory Service by e-mail at socialprotection@worldbank.org. 13 These areas in Bogota are typical of the neighborhoods targeted by Colombia's Empleo en Acción Program. 14 Response to a Crisis ­ and Beyond by Laura B. Rawlings Colombia's economic downturn sparked a social reform that looks to the future Colombia and the World Bank have made use of the The Emergency Response old adage "in crisis lies opportunity." In the late 1990's, In order to address the pressing needs of two of the Colombia was hit by its worst economic downturn in Colombian population's most vulnerable groups -- the 60 years. To address the social dimensions of the crisis, young and the unemployed -- three new safety net pro- a team was put together from the Government of grams were developed: Colombia, the World Bank and the Inter-American Development Bank. The team carried out a two-track The Empleo en Acción (Employment in Action) commu- mission, combining short-term responsiveness with nity works program provides temporary employment to long-term strategic planning. poor, unemployed, low-skilled workers by providing jobs in projects such as school expansion and road The team first addressed the immediate needs of the repair. The program targets urban areas where post-cri- most vulnerable victims of the crisis by introducing an sis unemployment is concentrated and will be available innovative, emergency package of targeted social assis- in close to 100 of Colombia's largest municipalities, tance programs. Looking beyond the immediate including Colombia's seven principal cities. The small- response, the team has taken advantage of the crisis to scale public works projects are co-financed by munici- craft a longer-term reform to Colombia's social safety net. palities, with the program principally financing labor costs and municipalities financing material. Many The Crisis aspects of the program have been outsourced. For While Colombia's recession was not nearly as severe as example, the FINDETER Financing for Territorial the economic crises that ravaged Asia, it was still a pow- Development Bank will manage the selection of sub- erful jolt to a country that had historically been spared projects, while NGO's, workers' cooperatives and local from this type of economic turmoil. A few numbers governments sponsor projects and pay workers. indicate the severity of the crisis: GDP shrank by 4.5 percent in 1999 alone, the historical rate of unemploy- The Empleo en Acción program is expected to generate ment doubled during the late 1990's and gains in poverty several benefits. First, it would provide temporary wlings Ra.B reduction made over the past decade were reversed. employment for Colombia's poorest, unskilled workers The economic crisis was accompanied by an intensifica- and income to their families. Second, by employing Laura tion of Colombia's decades-long civil conflict resulting workers in socially productive activities, the program Photo: in the displacement of hundreds of thousands of people could help restore the self-esteem of unemployed work- and a general increase in violence and insecurity. These ers, reduce their frustration, and prevent violence. political and economic factors combined to worsen Finally, the public works financed by the program social indicators and prompted a response from would help improve basic services to poor communities Colombia and the international community. and offer the opportunity to build their social capital. Secondly, the Familias en Acción (Families in Action) program protects children's health, education, and nutri- tion by providing cash conditional on keeping children in school and providing them with basic preventive health care. The program targets extremely poor families with children under 18 years of age in urban and rural areas. The program finances two kinds of grants. The first is an education grant equivalent to the direct cost borne by low-income families to send their 7-17 year- old children to school. The second is a health and nutri- tion grant that transfers enough additional resources to 15 extremely poor families to allow them to provide their family members with adequate food. A key feature is the delivery of the grants to the mother of the family -- a mechanism designed to ensure that the money is invested in children and an incentive for empowering The Long-Term Reform Effort women within their communities. The next step is to look to the future. The reform process will seek to reduce the risk of future crises by Crucial to implementation is the involvement of addressing fiscal sustainability issues and to enhance Colombia's ICBF Colombian Institute for Family Colombia's readiness to address the social consequences Welfare that will administer the program through its of future crises. Recommendations for reform are being network of local and regional offices. Program staff informed by World Bank and Inter-American responsible for selecting beneficiaries and monitoring Development Bank analytical work, including a review their compliance with the program's requirements will of Colombia's existing national social assistance pro- work out of the ICBF offices throughout Colombia. grams, an analysis of poverty and vulnerability and an Municipal governments are responsible for ensuring ade- assessment of the labor market. quate coordination with schools and health centers and for working with the program to ensure its successful As part of its long-term strategy, Colombia is presently local implementation. Banks will deliver the grants to preparing a plan for reforming its social safety net in beneficiaries through local accounts set up for program conjunction with the World Bank and the Inter- beneficiaries and elected mothers will represent benefici- American Development Bank. Several key issues are on ary families and monitor program implementation with- the reform agenda. First, Colombia is seeking to bal- in communities. ance the functions of its structural safety net that addresses the needs of vulnerable groups during normal The program is expected to raise the future productivity times with a counter-cyclical strategy that would be and, hence, earnings of over a million beneficiary chil- implemented during times of crisis. The availability of dren due to increased years of education and improved counter-cyclical financing and programs would allow health and nutrition status. Colombia to be better prepared to meet future crises. Second, policymakers are evaluating how the three new Finally, a smaller program, Jovenes en Acción (Youth in emergency programs might fit into the broader social Action) provides practical training and financial support safety net over the long-term. Finally, reforms to exist- to poor, unemployed youth. The program mobilizes ing safety net programs are needed to improve their effi- private sector firms to provide training and employment ciency and effectiveness through efforts at improving through a combined teaching and internship program. targeting, program focus and flexibility. These latter The program is based in Colombia's seven largest cities reforms will be critical to meeting the needs of vulnera- and targets poor young people aged 18-25. ble groups in Colombia today -- particularly young children, youth and the internally displaced population The World Bank and the Inter-American Development -- as well as challenges posed by the future. Bank worked with the Government of Colombia to design these programs and secure financing in direct Laura B. Rawlings is a Senior Monitoring and Evaluation support of the Government of Colombia's emergency Specialist for the World Bank. safety net strategy. This strategy is aimed at relieving the social consequences of the economic crisis through For more information on these programs, please visit increasing public spending by an additional 0.3 percent www.mabonweb.com/fip/contenido/plan_english/intro_ of GDP per year (about US$250-$300 million annual- peace.html ly), over and above current public social expenditures, on targeted social safety net programs through 2004. Colombia's Office of the President has overall responsi- bility for the programs, but the implementation of the new programs is carried out through established institu- tions with experience in financing community projects and assisting families. To ensure that the programs are directed to poor beneficiaries, all three programs use Colombia's proxy means test to screen for eligibility. The National Planning Department (DNP) is responsi- ble for monitoring and evaluating the impact of each program, including a comparative review of their effec- tiveness as social safety net interventions. Photo: Laura B. Rawlings Some of the children benefitting from Colombia's new safety net programs. 16 How Familias en Acción is Helping the Poor and Vulnerable Gloria Pedraza is a 36-year-old mother of six, who lives in Tolima, a municipality near Bogotá. Like dozens of other single-family heads in her neighborhood, with tiny houses, dirty floors and no running water, Pedraza sleeps in one single bed with all her children. She belongs to the poorest of the poor in Colombia and is enrolled in the Familias en Acción (Families in Action), a public program that provides cash assistance in return for keeping children in school and bringing them to health clinics. "Even though my husband is away, I have money for food," Pedraza stated, referring to the US$52 dollar subsidy she receives from the government every month as a beneficiary of Familias en Acción. Thanks to these cash transfers, which are equivalent to US$6 a month for each child enrolled in elementary school and US$12 for secondary school (7th to 9th grade), close to a million children will be able to not only have an edu- cation, but also to eat properly. After her first cash transfer, Pedraza went directly to the store. With the 8-month-old baby in her arms, she bought rice, cheese, bread and milk. Now her children, like many others, are able to go to school and concentrate on their studies without the pain of hunger. "We have definitely seen a change," says Aracely Tafur, an elementary school teacher in Tolima. "The students pay more attention as they have had breakfast. It's not like before, when they were hungry and sleepy." Familias en Acción enjoys broad-based support from beneficiary families, participating neighborhoods and municipalities, and the Presidency of the Republic. Teachers, nurses, doctors and "The students pay others involved in service delivery have similarly expressed great more attention enthusiasm for this innovative social assistance program. Beyond its direct economic impact on the population, the pro- as they have had gram is providing much more than money. In many areas, ben- eficiaries report that the project represents the first time they have felt the helping hand of the State in their communities. The breakfast. project has given people new hope and trust in their future. "I can do any job. I can sell empanadas, do deliveries, also sell cakes and even seed rice," says José Eduardo Valencia, an ele- It's not like before, mentary school student in Tolima. "But I want to stay in school. I want to be somebody some day; someone important: the President, for instance." when they were hungry and sleepy." 17 The AIDS The Friends of Orphans Community Center (FOCCC) located outside the city of Blantyre in Malawi. Orphans Crisis The Need for Collaborative Action by Antony Levine I n 23 countries heavily affected by HIV/AIDS, 40 Orphans and other children in extremely difficult circum- million children are likely to lose one or both of stances are among the fastest-growing and most visible their parents, while orphans will represent nearly 10 high-risk group in parts of Africa. Participants discussed percent of all children in Sub-Saharan Africa by 2010. the many ways in which provision of appropriate risk These figures, from a recent update to the 1997 USAID management instruments--to communities, families, study, Children on the Brink, highlight an unprecedented and children themselves--can shore up hard-won gains global crisis in the care of orphans and other vulnerable and enhance new poverty reduction interventions in the children. face of the society-wide effects of HIV/AIDS. "We have never had to deal with the problem of figur- Sharing Best Practices ing out what do with a generation of children who are The conference heard formal presentations on 10 pro- being brought up without adults," said World Bank grams implemented throughout Sub-Saharan Africa, and Managing Director Dr. Mamphela Ramphele. "If you facilitated informal discussions of many others. These don't deal with it, it will put at risk everything that we are presentations reaffirmed the importance of developing trying to accomplish from a development perspective." innovative community-based responses to protect orphans and vulnerable children. They also highlighted Within the World Bank and in interactions with gov- the unmet task of significantly increasing the scale of ernments "we need to elevate the profile of this prob- these programs. lem," Ramphele told participants at a conference in early June 2001. "It is a global public problem so we Among existing programs are those that promote succes- have to come up with an approach that involves a global sion planning, community-based and institutional devel- solution," she said. opment, income generation and community self-reliance and psycho-social recovery. A Plan International pilot The "Orphans and Other Vulnerable Children: What program, for example, encourages community resilience Role for Social Protection?" conference was sponsored through succession planning--an intervention that tar- by the World Bank and World Vision and convened in gets parents living with AIDS and other community Washington, D.C., to promote understanding of the members in an effort to ensure continuity of care and role of social protection and the Bank's comparative community fostering of orphaned children. advantage in assisting countries to support orphans and vulnerable children. Over two days, 100 participants, In another example, the Eritrean Government has including Bank staff, representatives from international worked on reuniting orphans and developing small-scale and bilateral organizations, NGOs and community foster care facilities to accommodate the large popula- organizations shared best practice experience, examined tion of orphans following the cessation of armed conflict the importance of being able to scale up the reach of in 1993. programs, explored questions about cost efficiency and discussed a strategic framework for collaboration. The Centrality of a Community-based Response Given the long-term benefits of raising children in fami- The social protection risk management framework lies and the infeasibility of providing institutional care shaped the conference's agenda. This approach enables to the millions of affected children, participants agreed an understanding of how HIV/AIDS poses a systemic that interventions must focus on facilitating community risk to children and societies and of who are the most fostering. vulnerable groups. It offers insights into appropriate interventions to reduce risk for high-risk groups, and helps to explain household behavior. 19 Recognizing the constraints of community capacity, par- ticipants agreed that development practitioners must implement mechanisms to ensure that support reaches communities and improves the outcomes for its intend- ed recipients. Where programs include giving financial incentives to families of foster children, governments and others must assiduously monitor to prevent the commercialization and exploitation of orphaned and vulnerable children. Self portrait of an African AIDS Orphan. One Facet of a Comprehensive Response Shocking as the extent of the orphan population is-- especially in Sub-Saharan Africa, where it is estimated that orphans will total more than nine percent of all "We have never children younger than 15 by 2010, and where they already constitute 20 percent of all children in some countries--the numbers mask even broader ruptures in had to deal with the social fabric and the state's capacity to muster a response. Pervasive poverty remains the defining condi- tion both fueling the proliferation of AIDS and under- the problem mining plans to ameliorate its impact on children. Interventions to assist orphans and vulnerable children of figuring out will take place against the backdrop of failing health sys- tems, psycho-social distress and the reversal of gains in many other social indicators such as school enrollment rates. Regardless of the success of efforts to stem new what do with HIV infections, the current orphan crisis will cause social upheaval for at least 20 years, as the children of today's orphans will themselves be raised in the vulnera- a generation ble environment of a heavily denuded extended family, where they will not benefit from the security of living grandparents. ofchildren These harsh realities point to the need for a farsighted perspective. Conference participants agreed that inter- ventions for children must constitute only partial ele- who are being ments in comprehensive national plans to address both the broader AIDS epidemic and poverty reduction. brought up Considering the expense of targeted programs, many, including World Bank Social Protection Lead Economist Margaret Grosh, advocated a multi-faceted and balanced response incorporating programs dealing without adults." directly with orphans and vulnerable children's special needs into broader investments in social safety net provi- sion and social services, such as health and education. Save the Children's Namposya Serpell described the experiences of participants in a program to provide home visits and technical support to child-headed households in Uganda. While technical assistance could theoretically bridge the gap between childhood inexperi- ence and adult production responsibility, in many cases it fails to prevent the early death of many children. In the context of pervasive poverty, technical assistance is not enough. "You have to go with medication and with food," Serpell explained, describing one young girl in the program who "was going to die of not having food before AIDS kills her." 20 The Imperative to Scale Up Efficiently To organize an appropriate response will require a clear- Throughout the conference, participants reiterated the er enumeration of the problem and definition of importance of promulgating projects that can be scaled orphans and vulnerable children, and a better under- up to address the enormity of the problem and its pro- standing of the disaggregated household-level costs asso- jected growth. ciated with AIDS and caring for children. Serpell described the totality of current interventions as Ramphele also pointed to the importance of determin- "the equivalent to putting out a burning house fire with ing other impacts that AIDS has on children, beyond a glass of water," while the Population Council's Laelia the economic repercussions. "I don't think we've done Gilborn warned "we shouldn't bother doing any pro- enough work about the sociological impact of this mag- gram that cannot be scaled up." nitude of children and adolescents growing up without the cushion of generations," she said. The "main problem" in protecting vulnerable children and orphans is implementing programs that can accom- Strategic Framework modate the demand, argued Birger Frederiksen, director The conference concluded with a presentation and dis- of Human Development in the World Bank's Africa cussion of the joint Principles to Guide Programming Region. "Now is the time for the international commu- for Orphans and Other Vulnerable Children Affected by nity to wake up" and fulfill its "responsibility to bring HIV/AIDS. Developed through collaboration between successful pilots to scale," he said. UN agencies, bilateral donors, international NGOs and regional groups, these principles reflect an attempt to Trina Haque, World Bank senior economist, pointed to coordinate a response. the necessary collaboration that such an effort will entail. "We cannot ignore the role of government in "The only hope we've got is to collaborate," said going to scale," she warned. USAID's John Williamson. "If we're going to collabo- rate we've got to do so within the context of a strategic Beyond collaboration, the fundamental consideration in framework." The draft Principles were generally well- such scaling up will have to be the cost implications. received by conference participants though some, like Kalanidhi Subbarao, lead economist for social protection World Bank Social Policy Specialist Stephen Commins, in the World Bank's Africa Human Development unit, pointed to the disproportionate focus on young children explained that finding cost-effective solutions will be to the potentially dangerous exclusion of adolescents. crucial. While some degree of targeting is desirable, he Proposed interventions must account for the unique argued program designers must exercise extreme care to needs and challenges of orphaned and vulnerable adoles- avoid stigmatization of orphans, ensure accurate target- cents, he argued. ing, and be aware of adverse incentives that targeted approaches can create and the inappropriate and/or Responsibilities and Opportunities unforeseen responses these might precipitate from Chairing the conference's final session, Ramphele households currently fostering orphans. exhorted participants to acknowledge the extent of the challenge, but not to lose hope. Strengthening the Evidence Rigorous monitoring and evaluation will also be crucial "The AIDS epidemic has laid bare the fault lines of our to determine which programs to scale up and to ensure societies [and] poses the threat of enhancing these their continued efficacy. inequalities," she said. The crisis of children in a world of AIDS places "enormous responsibilities" on development Conference participants decried the current dearth of practitioners. However, rather than despairing in the face quantitative data on the extent and experience of of this challenge, we should instead embrace the "oppor- orphans and vulnerable children and on program costs tunity to make our children's future different now." and impacts. USAID's Peter McDermott explained that "AIDS is the most studied pandemic from a medical Antony Levine was a consultant for the World Bank when standpoint, but we are largely ignorant about its effects this article was produced. on children." For a copy of the Conference proceedings, please con- tact the Social Protection Advisory Service by e-mail at socialprotection@worldbank.org. 21 People receiving social assis- tance benefits in South Africa Protecting Investments in People: Social Safety Nets are Central to Poverty Reduction "Social safety nets should not be considered a luxury item only developed countries can afford," said World Bank Managing Director Mamphela Ramphele as she "My goal is to find out what the role of NGOs might be launched the Washington, DC-based course on in the poverty reduction programs of any country," said Protecting the Vulnerable: The Design and Implementation Ms. Saba Kidanamariam, from IPAS International in of Effective Safety Nets. "Well-designed and well-targeted Ethiopia. safety nets are good investments that help the poorest when hit by a shock, raise living standards, and promote According to Ms. Babalwa Ntsokolo, from the Nelson social cohesion." Mandela Children's Fund in South Africa, "I'm starting microfinance specifically targeting poor communities Social safety nets are an integral part of the Bank's that are suffering from AIDS and the international com- poverty reduction strategy. Protecting poor and vulnera- munity is reluctant to lend to such communities. So I ble groups from the risk of losing their incomes, and am hoping to learn about strategies that will help me." ensuring that they have adequate access to essential serv- ices such as health, education, and nutrition, is at the Among the issues that arose during the course were the heart of the development process. Not only do safety trade-offs between safety nets and non-safety nets inter- nets promote equity, they also insure against the loss of ventions, costs versus benefits of various interventions, human capital. the types of safety nets that make sense in different eco- nomic and social situations, the most at-risk groups and "The time to design safety nets is when a country is not how to target them, as well as effective ways to design in crisis. Rebuilding human assets out of abject poverty and implement the monitoring and evaluation of poli- is extremely difficult," added Robert Holzmann, the cies and interventions. Bank's Director for Social Protection. "The phrase `equitable economic development' sounds This learning event which ended on December 7, 2001, deceptively simple and straightforward," said Ramphele. after two weeks of lively interaction among 60 partici- "And yet we have come to understand that achieving pants from around the world, considered the role of this goal is elusive and exceedingly complex. It is very social safety nets within the broader context of equitable easy to draw lines that exclude and divide. It is very Amde economic development, public expenditure and budget hard to draw lines that embrace and encompass." edullish constraints, and institutional structure. isgY The 60 participants were extremely rich in their diversi- Photo: "Currently I'm involved in the comprehensive poverty ty of background and geographic dispersion: They came strategy for my country, and my objective is to learn from 20 countries; and nearly half were from Africa. about the experiences of other countries and how to Almost 50 percent were women; and a quarter were staff design effective social safety nets for the poor," said Ms. of multilateral and bilateral agencies, including Bank Huong Thi Lan Nguyen from Vietnam's Ministry of staff. The mix of disciplines was also rich: policymakers, Labor, Invalids, and Social Affairs. Bank staff also PRSP and country teams, NGO staff, researchers and found the course useful, as one that "helped me put into trainers from academic institutions, and the private sector. perspective many things related to my work," said Alexei Ionascu of the Bank's Moldova office. "You are the most valuable resource in this course," said World Bank Institute Director John Middleton in his The course takes into account potential implications welcome to participants. `You represent more than 500 from the perspective of political economy and gender years of development experience. I encourage you to tap equity, among other factors. Participants exchanged this expertise during and after the course through active experience and reviewed principal types of safety net networking." interventions and the mechanics of their delivery, including cash and in-kind transfers, income-generating schemes and public works, and social funds. 23 Safety Nets feature prominently in the Bank's war on "Courses like this one that include people from all over poverty. The World Development Report 2000/2001: the world not only help disseminate new ideas and Attacking Poverty proposes a strategy for attacking pover- building skills, they also generate new knowledge ty on three fronts: promoting opportunity, facilitating through the interaction and exchange of experience empowerment, and enhancing security. Social Safety among the course participants," said Middleton. "It is Nets are central to enhancing security and reducing the also an opportunity for Bank staff and their client coun- risks faced by poor people. The growing importance of tries to take part in this exchange of ideas which we this security dimension is reflected in the Bank's lending hope will result in a more informed policy dialogue for social protection which increased from US$240 mil- among key development stakeholders." lion in 1994 to US$1.7 billion in 2001. Courses on safety nets have also been offered in English, As lending has increased, so too has the demand for Spanish and French for a number of Latin American complementary services such as capacity building and and African countries through distance learning; and technical and policy advice. This demand has been met other offerings are planned for the Middle East and in part by the learning programs of the World Bank North Africa and Europe and Central Asia. Institute which designed this course jointly with the Human Development Anchor and in collaboration with This article originally appeared in the December 13, the Research Department and the various Operational 2001 issue of Bank's World Today. Regions of the Bank. Added expertise was brought to the table by many resource persons, including well-known For more information on the Social Safety researchers from universities and research institutions, and Nets Core Course, please visit from partner institutions in developing countries. http://www.worldbank.org/wbi/socialsafetynets/ Participants in the 2001 Safety Nets Core Course About the World Bank Institute WBI Facts: Active in 149 countries. The World Bank Institute supports the World Bank's learning Delivers nearly 500 learning programs for clients and knowledge agenda by providing learning programs and annually. policy advice in the areas of human development, econom- Reaches some 30,000 external clients annually. ic policy for poverty reduction, governance, regulation, and Delivers nearly 1,500 training activities for World Bank finance, and environment and natural resources. It also pro- staff annually. vides skills for development training for World Bank staff. Collaborates with more than 150 partner institutions. Country Offices: Beijing,Moscow,Kiev,Tashkent,and WBI draws on and disseminates the World Bank's global Bishek. knowledge and expertise. The Institute combines face-to- Joint Japan/World Bank Graduate Scholarship face and distance learning using new and traditional media, Program: 600 scholarships awarded in 2000. including the Internet and videoconferencing, to reach poli- Robert S. McNamara Fellowships Program: 15 post- cymakers as well as representatives from civil society. graduate fellowships awarded annually. For more information on the World Bank Institute, please 24 visit their website at: www.worldbank.org/wbi/ Globalization at Work by Lotte Lund In a vivid example of globalization at work, the World Bank's Margaret Grosh, Gillette Hall and Helena Ribe deliver an adaptation of the Social Safety Nets Core Course via satellite from Washington, DC, to an audience of 60 students in San Jose, Costa Rica, and Buenos Aires, Argentina. A taped version of the session will be aired later in Santa Fe, Argentina, and Cali, Colombia, at the Universidad del Valle through the Television Educativa Iberoamericana -- a Spanish network specializing in distance learning. The Bank has also offered the safety nets distance learning course to English- and French-speaking audiences in Africa from the Washington studio as well as from facilities in Europe with the help of a consortium of universities led by the University of Maastricht in the Netherlands. By working out of Europe using local experts, the course can overcome the challenge of language and time zones. At the receiving end in the client countries, the World Bank works with local universities where facilitators and content providers can assist the participants in applying a local context to the subject matter. For example, participants from Mozambique wanted to focus on design issues related to coping with catastrophic events such as the recent devastating floods. In South Africa, participants were especially interested in designing a social assistance pro- gram for children affected by HIV/AIDS. The course transmitted to sites in Latin America focused on the region's need to strengthen the instru- ments used to assist people in dealing with the income shocks associated with the economic crises of the 1980s and 1990s. Photo: Lotte Lund "I strongly believe that the course helps to empower government as well as civil society," says Dr. Victoria Kisyombe who participated in the distance learning course from Tanzania in the fall of 2000. She likes the "bottom-up" approach and how the course empowers NGOs to know their rights. "They learn to understand how important their participation is in safety nets programs," she says. Looking ahead, the World Bank's vision is to continue along this path so that increasing numbers of people can acquire the knowledge and skills they need. "Distance learning is a way for the World Bank to increase its outreach," says the World Bank Institute's Azedine Ouerghi, one of the organizers of both the Core Course and the distance learning version. "We can link policy to implementation and introduce the latest in research," he says. "By com- bining the three and making them available for our client countries, I believe we have the most powerful capacity building network in the world." 25 26 On Target in Armenia by Lotte Lund I n this landlocked, mountainous country of almost In order to administer the numerous assistance programs, four million people where almost half the popula- the Armenian government established the Central tion is living below the poverty line, it has taken Commission for Humanitarian Aid Delivery and a net- tremendous political courage to replace a Soviet-style work of local Social Services Offices in 1993. Soon, social assistance system with a single family benefit more than 500,000 applicants were being provided with strictly targeted at only the poorest people. But, over aid through a simple registration card or "social passport" the last decade, the Armenian government proved that it endorsement procedure. is possible. Because of the great demand for social assistance, there The move away from the Soviet-style safety net in which was a need for better targeting. Thus, the Paros most people had jobs and a high level of social security Targeting System was launched in 1994 for proxy means began in 1988 when a devastating earthquake killed testing of low-income households. It was one of the first 25,000 people and left one third of the country's homes programs in Armenia which used economic criteria for and even more of the country's industrial infrastructure targeting. The program was based in the Social Services lying in ruin. Then in 1991, the Soviet Union dissolved Offices and created the first comprehensive database on and the old patterns of trade fell apart. The final blow household welfare in Armenia. came as a result of military conflict with Azerbaijan over the Karabakh region. From 1992 to 1994, Azerbaijan The economic situation forced the government to sup- -- Armenia's then principal source of energy -- and plement the humanitarian aid of the international com- Turkey imposed a crushing trade blockade on Armenia, munity by reactivating a budget-supported program of the effects of which were accentuated by local conflicts in social assistance inherited from the Soviet era. This Georgia and Russia that made the rail and oil pipelines became the Program of Budget Transfers and only provid- to the north unreliable. As a result, the Armenian econ- ed assistance to people that fell into groups deemed to omy all but collapsed. Today, unemployment remains be at risk. These risk groups were made up of categories widespread and there is an acute housing shortage. that included young children, disabled people, and pen- sioners. From 1992 to 1998, the Government issued The earthquake triggered a flow of humanitarian aid to numerous decrees expanding the social assistance system Armenia that lasted until around 1995. The aid varied to 26 types of benefits. in volume and frequency of delivery and was sometimes earmarked for specific groups like the disabled. Most of the aid was, however, distributed among all victims of the earthquake. In the hardest years from 1992 to 1995, Armenia actually saw a continuous inflow of humanitarian aid which was subsequently distributed among 80 percent of the population. Blomquist ohnJ Photo: Minister of Social Lund Welfare Razmik Lotte Martirosian. Photo: Demolished building in Armenia's earthquake zone. 27 There were a number of drawbacks to this approach. One of the leading figures in the reform process was For one, the Program focused on individuals as benefici- Minister of Social Security Razmik Martirosian. aries rather than households. As a result, a person could Continually decreasing living standards and growing be eligible for government assistance despite being a social disparity made the creation of sustainable, well- member of a household that, as a whole, was relatively designed and targeted safety nets a special concern for well-off. The increased number of benefit types also his government. It has not been easy, but he is commit- allowed for an overlap in assistance in which one person ted to meet the main goal of the reform, namely to cre- could receive two or more benefits at a time. For exam- ate a modern system of social security to improve peo- ple, a single mother with a disabled child received one ple's lives. Transformation is needed on more than one type of benefit for being a single parent and another for level, however. the child. "We have a strong need for mental change. The old sys- On the whole, these practices resulted in inefficient and tem is still in the minds of people," he says. Martirosian inequitable allocation of scant budget resources. It was spends every Wednesday in his office talking to ordinary evident that the Program was in need of restructuring to Armenians who come to present their problems with the better service target groups and to direct financial assis- social assistance system. These workdays are his longest tance more efficiently. of the week. In order to address these shortcomings, the Armenian Martirosian has also helped bring social reforms to the Government made a bold move in early 1999 and abol- top of a government agenda that, in the past, has been ished the Program of Budget Transfers in favor of a new dominated by national security and privatization. program that, in July 2000, would become known as "Social reforms have lagged behind economic reform. the Poverty Allowances Program. In the process, all the We were at war and had serious problems in our govern- old categories of benefits were turned into one single ment. But it is now up to this Ministry to make sure family benefit. that our social system gets higher priority," he says. The new program is based on: This sentiment is echoed by Sona Harutunian, head of The recognition of a household (rather than an indi- the Ministry of Social Security's Social Services vidual) as a base unit of human society that should be Department, an economist and the person responsible for supported by the government in case of need; the Poverty Allowances Program in the Ministry. "Ten years The determination of eligibility through a range of ago we had a good standard of living in this country," she factors; says. "I am fully behind the government's current strategy The use of information technology for eligibility of investing in the private sector and creating employment. determination; But we need to strike a better balance. We cannot tell the Adjusting the size of the project in accordance with poor people that they must wait to get food until we the actual needs of a household. have economic growth, if we want to convince them about the advantages of democracy." Proxy means testing used for distribution of humanitari- an aid became the basis of the new program. This deci- In the first year using the single family benefit, the sion was motivated by a number of reasons. The Paros number of households that received benefits remained Targeting System had created a well-developed network fairly constant at about 12 percent of the population. of 52 local Social Services Offices and a unique database The increased benefit level meant that, in the first year, of nearly all low-income Armenian households including spending for social assistance rose from 13.4 billion those who were not officially recognized as needy, but drams to 21.1 billion drams. In subsequent years, the believed they were and those who had applied, but had cutoff threshold for eligibility became stricter and social not yet received eligibility status. The Paros program assistance spending decreased, in turn. In 2000, social also served as a model for a well-designed document assistance spending was 16.7 billion drams (1.6 percent flow and a tested technique of score-based assessment of of GDP). These figures do not include pensions and household material and financial status. The World make Armenia one of the region's biggest spenders on Bank's role in the reform process has been to provide cash assistance. diversified assistance for the project, including financial and technical support. Other agencies assisted the In the Poverty Allowances Program, eligibility is calculat- reform, among them USAID which provided very early ed from a formula using assessment criteria such as affil- assistance in the development of the Paros Targeting iation of a household with a standard social category, System and the proxy means test. number of disabled members of a household, place of residence, housing conditions, car ownership, and monthly rate of power consumption in addition to aggregate household income. 28 These different criteria are weighed and entered into a how many points should a household with a disabled formula. The system is constantly being refined and child get in comparison to a mother with a child under corrected and the Government is now working on a new two years of age? The use of a household survey will formula based on statistical analysis of household survey help make the weights more objective. data. Also being discussed is the appropriateness of using the income factor in a country dominated by an Households seeking assistance under the established pro- informal economy. These changes are the result of an cedure must send a delegate, normally the head of the important weakness in the current system, namely that household, to a local Social Services Office with an the weights of eligibility factors were derived subjectively. application and documents disclosing the household's When the difference between being eligible or not is composition, incomes and assets. After a preliminary determined by very a small margin, how do you make examination of these documents, the office may require the system fair? For additional information from the applicant. example, Once the information is verified, it is entered into a cen- tral database where the case is corroborated with infor- mation from other sources such as police and electric company databases. This process may lead to the quali- fication score being changed or even reduced to zero. This information is then sent back to the local office who, in the case of a approval of eligibility, then issues a "passport" recording the eligibility status of the house- hold. Allowances are delivered to the households by local post offices in accord with the monthly payrolls issued by the local Social Services Office. "Ten years ago we had a good standard of living in this country." Anna Sasgsyan is one of the many Armenians who lost everything in the devastating 1988 earthquake. She and her family still live in a shelter and rely on social assistance benefits. 29 Photo: Lotte Lund The Poverty Allowance Program offers several advantages over the previous system of benefit delivery. The single legislative framework reduced the number of social assis- tance programs and the number of benefit types offered, thereby increasing efficiency in benefit delivery. A single But perhaps most importantly, the new benefit rules are database makes it possible to better assess the need for improving the program's targeting. Only six months and provide social assistance to large numbers of house- after the Poverty Allowance Program was reformed, the holds across Armenia. The extensive network of Social share of benefits going to those in the poorest 40 per- Services Offices brings the program closer to people and cent of households rose from 53 percent to 65 percent. the automated process allows for a prompt response to Moreover, the Ministry of Health has decided to use the any changes in a recipient's household composition or same targeting mechanism to grant poor people access status. Overall, the unified system has stronger impact to free health care starting in 2001. and is more efficient and the decentralized social services offices and local councils brings the system close to the clients and communities. The Poverty Allowance Program suffers from certain shortcomings that are now of particular concern to the Government. First, due to the absence of an adequate telecommunications network, Social Services Offices have to use computer diskettes to share information, substantially slowing the process of data verification. Subsequently, it is now a priority of the Ministry of Social Security to connect the computers at Social Services Office to each other. In Armenia, this is easier said than done and requires substantial capital investment. Photo: John Blomquist IT Improves Social Safety Nets by Lotte Lund The Nemrout Center of Information and Analysis is the first center in the Caucasus to employ modern computer and software technology to deliver social safety nets. What makes it even more unique is that it is directly owned by the Government, thereby securing for itself an invaluable in-house capability to do its own economic analysis on social security issues. The center, conveniently located in the heart of the Armenian capital of Yerevan, opened in the summer of 2001. It employs a staff of 30 persons -- from programmers and operators to administration and support staff. Armenia has many top programmers as the country used to be host to one of the Soviet Union's leading computer facilities. It was the Armenian Government that ordered the center to be established as a closed joint stock company with all shares in the center held by the Government itself. The Government wanted the capability to do its own analysis instead of having to depend on international consultants. So the World Bank and USAID have only been involved in giving financial assistance for the renovation of the space and the cost of new high technology equipment. For people eligible or in need of social benefits, from poverty allowances to old age pensions, the advantages of com- puterization are significant and allow for: A much simpler and faster application process for social benefits with a reduction in the number of documents the applicant has to provide and more effective use of the staff in Social Services Offices. More accurate and fair calculation of social benefits based on better information related to a family's economic status or an individual's actual work history. Improved opportunities for each individual or family to receive all the benefits to which they are entitled resulting from the ability to share critical information between different social insurance and social assistance programs. The ability to pay larger benefits to those in most need,while lower benefits are paid to families who are better-off. Reduced administrative costs of the social insurance and social assistance programs,allowing better services and a higher amount of budget funds allocated to benefits rather than administrative costs. In addition to the tasks already performed by the center, work has started on a new project to create a central data- base containing information based on a personal ID number. For more information on the Nemrout Center, please visit their website at: www.nemrout.am/index_us.html The Nemrout Center is named for nearby Mount Nemrout. On the top of this 3,600 meter high mountain, a Yerevandian king built a sacred site in 69 BC. Huge statues of pagan gods, almost eight meters high, decorate the site. The sides of the statues are inscribed with the country's laws, making this one of the earliest information centers in the region. Photo: Lotte Lund 31 SPectrum's Resource Guide New Tools for Social Safety Net Reform In addition to training and technical assistance, a host of new toolkits for policymakers and others faced with the challenge of reforming social safety nets are available from the World Bank. From the Social Safety Net Assessment Toolkit to the com- prehensive Safety Nets Primer, the Poverty Reduction Strategy Sourcebook and new software to help map poverty, our goal is to help countries to determine their own solutions more easily and with the benefit of learning from the experience of the Bank and our partners in this area. A New Safety Nets Primer from the World Bank A comprehensive, up-to-date Safety Nets Primer targeted versions that also include the individual papers, at an audience of policymakers and those who advise PowerPoint presentations and bibliographies. Finally, them, will soon be made available by the World Bank. selections from the Primer will be published formally in an edited book volume in 2003. The Primer is composed of three suites of papers. One suite covers each of the main safety net interventions SAFETY NETS PRIMER PAPERS (cash transfers, food-related programs, price subsidies, public works, fee-waivers, etc.). A second suite covers Completed Papers: various cross-cutting themes (targeting, political econo- Community Based Targeting Mechanisms for Social my, institutions, monitoring and evaluation, etc.). A Safety Nets -- Jonathan Conning, Department of third suite looks at working with social safety nets under Economics, Williams College and Michael Kevane, special circumstances (safety nets in very low income Department of Economics, Santa Clara University countries, in transition economies, in post-conflict set- (Social Protection Discussion Paper No. 0102) tings, for orphans and vulnerable children, etc.). Orphans and Other Vulnerable Children: What Role for Some of the papers provide a synthesis of the develop- Social Protection? -- Antony Levine, The World Bank ment profession's thinking and experience with respect (Social Protection Discussion Paper No. 0126) to the topic in a condensed form, but with references for further readings. Others push forward what is known Safety Nets in Transition Economies: Toward a Reform or how to think about an issue. Strategy -- Emily S. Andrews and Dena Ringold, So far a score of papers are finished or nearly so, writ- The World Bank (Social Protection Discussion Paper ten by leading specialists from the World Bank and aca- No. 9914) demia, sponsored by the Bank's Social Protection Sector and a variety of partners, the largest of which being the Social Services Delivery through Community-Based World Bank Institute (WBI). For many of the topics, Projects -- Dinah McLeod and Maurizia Tovo, The especially the suite of papers on program interventions, World Bank (Social Protection Paper No. 0118) there will be output available on different levels. There will be a full overview paper, a two-page summary of it, an annotated bibliography and a PowerPoint presenta- tion. Several of the papers are being translated into Spanish and French. The Primer will be posted on the Internet and the main paper versions will be printed as a part of the Social Protection Discussion Paper Series. It will also serve as training material for the Core Course on Safety Nets and its distance learning versions. The WBI is also making the Primer available as part of their Working Paper Series for the topics covered in the Core Course in 32 SPectrum's Resource Guide Forthcoming Papers: Commissioned Papers: Cash Transfer -- Stephen R. Tabor, Economic Service Evaluation of Social Safety Nets Programs -- John Management Blomquist, The World Bank Cash Transfer Programs in Rural Areas: Lessons from How Much Should Governments Spend on Social Experience -- Louise Cord, The World Bank Safety Nets? -- Timothy Besley, Robin Burgess and Imran Rasul, Department of Economics, London Emerging from Ethnic Conflict: Challenges for Social School of Economics Protection Design in Transition Countries -- Christian Bodewig, Robert Bosch Fellow Safety Nets in Transition Economics -- Louise Fox, The World Bank Ensuring Access to Essential Services: Demand-side Housing Subsidies -- Harold M. Katsura and Clare T. The Targeting of Transfers in Developing Countries: Romanik, The Urban Institute Review of Experience and Lessons -- David Coady, International Food Policy Research Institute, John Food-Based Safety Nets and Related Programs -- Hoddinott, Dalhousie University and Margaret Grosh, Beatrice Lorge Rogers and Jennifer Coates, Tufts The World Bank University School of Nutrition User Fees in Health: Mitigating their Effect on the Poor Gender and Risk in the Design of Social Protection -- Ricardo Bitrán and Ursula Giedion, Bitrán y Interventions -- Kene Ezemenari, Nazmul Chaudhury Asociados and Janet Owens, The World Bank Institutional Design and Institutional Incentives in Social Safety Nets -- Chris de Neubourg, Kai Bucholz and Christine Weigand, University of Maastricht Long-term Welfare and Investment Impact of AIDS- Related Changes in Family Composition: Evidence from Uganda -- Klaus Deininger, Anja Crommelynck and Gloria Kempake, The World Bank Price and Tax Subsidization of Consumer Goods -- Harold Alderman, The World Bank Public Attitudes Matter: A Conceptual Frame for Accounting for Political Economy In Safety Nets and Social Assistance Policies -- Carol Graham, Center on Social and Economic Dynamics, The Brookings Institution Public Works Programs: A Survey -- Kalanidhi Subbarao, The World Bank Safety Nets, Non-Formal Insurance, and Micro-finance -- Jonathan Morduch, New York University and Manohar Sharma, International Food Policy Research Institute 33 SPectrum's Resource Guide A Toolkit for Assessing Social Safety Nets by Kathy Lindert World Bank staff in the Latin American and Caribbean Toolkit will involve: Region have developed a new tool to help understand An updated templateTerms of Reference; the strengths and weaknesses of a country's safety net -- A set of Frequently Asked Questions and Answers the Social Safety Net Assessment (SSNA) Toolkit. regarding Social Safety Nets covering basic principles; A number of "how to" notes for analytical methods The first output of the initiative was a prototype Terms using "first, second and third best" indicators for of Reference used to guide initial SSNA work in several analysis of the various types of programs depending countries. With appropriate country-specific modifica- on data availability (examples include how to analyze tions, this basic template tool has been applied by teams targeting incidence, program costs, and public spend- working on SSNAs in a number of countries, including ing on social safety nets). Argentina, Colombia, Dominican Republic, Guatemala, Annexes with various international comparisons for Jamaica, Nicaragua and Uruguay. Latin American and Caribbean countries and possibly others, including OECD countries, to provide a com- The experience from these countries is now being used mon set of benchmarks covering basic topics such as to further develop the SSNA Toolkit, which is intended overall public spending on social safety nets, adminis- to be web-based. The basic architecture of this SSNA trative and program unit costs and target incidence. Existing case study applications. Kathy Lindert is a World Bank Senior Economist. The Poverty Reduction Strategy Sourcebook Developing Poverty Reduction Strategies is on the agen- The Sourcebook is divided into three parts. Part I focuses da of about 70 low-income countries. The approach on the core techniques (poverty diagnostics, monitoring was adopted in 1999 to help poor countries and their and evaluation etc.). Part II deals with macro and sec- development partners strengthen the impact of their toral policies. The last part of the Sourcebook addresses common efforts on poverty reduction. To assist these cross cutting issues including gender and environment. countries, a new online tool, named the Poverty Readers concerned with a specific sector or topic are Reduction Strategy Sourcebook, was developed by staff encouraged to refer directly to their area of interest. from the World Bank and the International Monetary Fund (IMF). The sourcebook reflects the thinking and A chapter in Part II is devoted to Social Protection. practices associated with the Comprehensive While policies that promote economic growth are cen- Development Framework, as well as lessons emerging tral to poverty reduction, social protection measures from the World Development Report on Poverty, and have a role to play in reducing the vulnerability and pro- good international practices related to poverty reduc- tecting the welfare of the poor. Choosing the appropri- tion. The resulting Poverty Reduction Strategy Papers ate mix of social protection programs and policies to (PRSPs) make up the basis for assistance from the Bank best contribute to poverty reduction requires careful as well as from the IMF. consideration. The Social Protection chapter presents a step-by-step approach to producing a national social The Sourcebook contains a collection of broad policy protection strategy including safety nets and presents guidelines, examples of best practice, and technical three country cases from Argentina, Malawi and Togo. notes. It is not intended to be prescriptive, nor does it provide all the final answers as the process of preparing The Poverty Reduction Sourcebook is available on the and implementing Poverty Reduction Strategies will take web at: www.worldbank.org/poverty/strategies time and involves learning by doing ­ for the Bank and Fund staff as well as for the countries. The Sourcebook is to be considered a living document which is expected to change in light of experience and comments. Readers are therefore invited to actively participate in the formu- lation of the evolving document and they are encour- aged to watch out for updated versions. 34 SPectrum's Resource Guide Poverty on the Map by Peter Lanjouw and Berk Özler Many policymakers use poverty maps -- territorial How can this obstacle be overcome? One way is to descriptions of the distribution of poverty within a apply econometric techniques to combine data from a country or region -- when planning public investments sample survey data with data from a census to predict in education, health, sanitation, water, transport and consumption-based poverty indicators using all house- other sectors. Social Funds often use poverty maps holds covered by the census. Because policymakers in because geographically targeted investments are thought many countries are familiar with poverty and inequality to reach many poor citizens and have spillover effects indicators (e.g. the Foster-Greer-Thorbecke measures, enhancing productivity in depressed areas. Transfer pro- the Gini coefficient, etc.) that are regularly reported in grams are also often operated in only the neediest areas country poverty profiles using household surveys, this of the country. method is appealing as it produces estimates of these same measures as well as an indication of the degree of Poverty maps are most accurate when they are finely dis- statistical precision of these estimates for smaller admin- aggregated, i.e. when they represent small geographic istrative units. Poverty maps constructed in this fashion units, such as counties or villages in the countryside and are more likely to be put to practical use because the sta- neighborhoods within cities. Unfortunately, almost all tistical underpinnings of the methodology makes them household surveys are too small to be representative at more credible and more readily endorsed than the more such fine levels of disaggregation, and most census data commonly found maps based on ad-hoc methods. (or other large data sets) do not contain the detailed information needed to calculate monetary indicators of A small team of researchers in the "poverty cluster" of the poverty or inequality. In general, there is a tradeoff World Bank's Development Economics Research Group between the number of observations in a data set and have now developed a methodology along these lines and the information content because collecting a lot of have piloted it in several countries, among them Ecuador, information for a very large sample is prohibitively costly. South Africa, and Nicaragua. The team provides techni- cal assistance, capacity building and various free software tools to statistical institutes in developing countries upon demand, conditional upon availability of suitable data such as a recent census. Furthermore, the team is cur- rently working on developing a "how-to" manual for poverty mapping, platform-independent software tools and a training course for staff from statistical institutes and researchers from developing countries. A training course combined with user-friendly tools and technical assistance should make poverty maps accessible for a wide range of countries in the very near future. Peter Lanjouw is a Senior Economist and Berk Özler is an Economist for the World Bank's Development Economics Research Group. 35 SPectrum's Resource Guide Social Safety Nets on the Web Many social safety nets resources are available on the World Bank Safety Nets and Transfers ­ World Bank's website reflecting the work being done not www.worldbank.org/poverty/safety only by the Social Protection Safety Nets Team, but many others as well. Here are some useful websites for those Using "safety nets" as the search term produces many interested in the Bank's work in Safety Nets and beyond. publications and project information on the following websites: World Bank Research ­ www.econ.worldbank.org/ Presently returns 21 working papers and six abstracts of current studies. World Development Sources ­ www-wds.worldbank.org/ Presently returns 366 records. World Bank Projects & Operations ­ www4.worldbank.org/sprojects/ Presently returns 15 projects. The Safety Nets Team The Social Safety Nets Team within the Social Protection Unit of the Human Development Network supports World Bank staff and client countries in developing effective safety nets through the following activities: Technical and operational support We assist both World Bank staff engaged in projects and country policymakers in doing good work on safety nets. We provide answers to questions on international practice, referrals to appropriate experts, pointers to pertinent readings or experience, etc. We often peer review analysis of safety nets or proposals for new projects. We also spend up to a third of our time working directly with World Bank country teams to design and provide project loans. Back (left to right): Manorama Rani, Program For further information about Safety Nets, please contact: Assistant, Yisgedullish Amde, Senior Operations Analyst, Front: John D. Blomquist, Senior Economist The Social Protection Advisory Service and Margaret Ellen Grosh, Lead Economist 1818 H Street, NW G8-802 Washington, DC 20433 USA E-mail: socialprotection@worldbank.org Phone:(202) 458-5267 Fax: (202) 614-0471 36 SPectrum is published four times a year by the Social Protection Unit of the World Bank. SPectrum is intended to raise awareness, enliven debate and present the latest thinking around social protection issues, including child labor, labor markets, pensions, social funds and social safety nets. The views presented in the articles are solely those of the authors and do not reflect the views of the World Bank. Articles appearing in SPectrum may be reproduced or reprinted provided the author(s) and SPectrum are cited and a courtesy copy is provided to SPectrum. Submissions, letters and story ideas are welcome and may be sent to: Lotte Lund, Editor Social Protection Unit The World Bank 1818 H Street, NW Washington, DC 20433 USA Tel: +1 202 473 1143 Fax: +1 202 522 3252 Email: llund@worldbank.org Social Protection Human Development Network The World Bank 1818 H Street, NW Washington, DC 20433 USA