79354 Closing the Gap: ibrd 40003 The State of Social april 2013 Safety Nets 2013 The World Bank – WORKING FOR A WORLD FREE OF POVERTY In 2000, 72 developing and emerging countries had at-scale safety net programs An Explosion of Activity in Social Safety Net Programs—Now in 131 Developing/Emerging ibrdCountries 40004 april 2013 Over the last decade, the interest and activity in social pro- tection has experienced a paradigm shift, with at-scale safety net programs expanding at a rate of two countries per year. Social safety net programs, today, are being built on a nation- al scale in 98 countries, up from just 72 in 2000. In addition, some 33 countries currently are experimenting with innovative pilot initiatives, 22 of which are in Sub-Saharan Africa. In 2000, 72 developing and emerging countries had at-scale safety net programs Every Year 50 Million People Escape By 2013, 98 developing and emerging countries had at-scale safety nets, from Absolute Poverty Because of 26 more than in 2000 (green), and 33 pilot programs (red) Safety Net Programs Evidence from the new World Bank ASPIRE database shows that, each year, safety nets in developing countries lift 50.3 million people from absolute poverty (living on less than US$1.25/day). At the same time, 96.4 million people are uplifted from the bottom quintile (relative poverty). Overall, this represents a significant impact on the global fight against poverty. Yet, safety nets coverage in low-in- come countries (LICs) remains limited, with poverty reduc- tion occurring primarily in middle-income countries (MICs). Safety Net Programs Have Also By 2013, 98 developing and emerging countries had at-scale safety nets, 26 more than in 2000 (green), Helped Build Shared Prosperity by as well as 33 pilot programs (red) Decreasing Inequality Safety nets, by providing income security for the poorest, also have helped lower inequality. For example, the Child Support Grant in South Africa has led to a reduction of the Gini index (a widely used measure for inequality) by 3 percentage points. In Brazil, about 28 percent of the fall in the Gini can be attributed to the Bolsa Familia program, combined with other non-contributory measures. Closing the Gap: The State of Social Safety Nets 2013 Evidence Continues to Mount for the Effectiveness of Safety Nets to Stimulate Local Growth, Education, Health, Nutrition and Jobs Safety nets are among the best-evaluated interventions in social policy. In a growing number of contexts, their perfor- mance is being measured using some of the most advanced evaluation methods. This includes an increasing application of randomized controlled trials (RCTs). In fact, about half of the current 119 rigorous impact evaluations supported by the World Bank in 24 countries use RCTs. The results generated by impact evaluations are key to providing reliable data to inform decision-making and adjust- ing programs to enhance their efficacy. More generally, they show that former beneficiaries are more likely to enter tend to foster a culture for evidence-based dialogue among middle-class occupations than non-beneficiaries. And, this the various actors involved in building and improving safety result is particularly significant for indigenous women who nets. Recent impacts of safety nets include: had participated in Oportunidades. On average, their share in better-paying jobs was about 25 percentage points higher Stimulating local economies. Safety nets provided to than their peers who did not benefit from the program. poor households can have significant multiplicative effects on others in the local economy. In Malawi, a cash transfer program generated up to US$2.45 in local communities for every dollar provided to beneficiaries. In Lesotho and Safety Nets Improve Mexico, similar programs are estimated to have, respec- Resilience to Crises tively, a multiplier effect of US$2.23 and up to US$2.60 per dollar distributed. An established system of safety nets is key to respond and deliver assistance swiftly in times of crises. In addition, such Investing in human capital: education, health, nutri- a system connects beneficiaries to other livelihood interven- tion. Conditional cash transfers (CCT) have increased tions. For example, in 2011 the Productive Safety Net Pro- school attendance in Bangladesh and Cambodia gram (PSNP) in Ethiopia scaled up to meet the additional by 12 and 31 percent, respectively. In other words, in the needs sparked by the Horn of Africa crisis. On top of its core absence of the CCT, school attendance by poor children beneficiaries, PSNP reached an additional 3.1 million people in parts of Cambodia would have been around 60 percent with transfers over a three-month period. The entire response instead of nearly 90 percent. CCT programs in Colombia process, from financing to disbursement, took only six weeks. and Ecuador have bolstered health center visits for children Because of programs like PNSP, the impact of crises such by 33 and 20 percent respectively. In Guatemala, children as droughts on poor and vulnerable families may be—in com- under two years of age who benefited from a nutritional safe- parison to the previous decade—substantially lessened. ty net program earned wages 46 percent higher as adults compared to those who did not benefit from the intervention. Moreover, the PSNP platform has been leveraged over the years to provide targeted beneficiaries with financial services Promoting better job opportunities in the future. The (i.e., Household Asset Building Program, HABP). The com- Oportunidades program in Mexico, a CCT currently reach- bination of interventions amplified the impacts and resilience ing 6.5 million households, sparked demand for higher-level of the programs: When single-intervention beneficiaries are education and improved job prospects. Recent evaluations compared to dual-interventional beneficiaries (PSNP and The World Bank – WORKING FOR A WORLD FREE OF POVERY HABP), the latter produced 147 kg more of grains and were Next Generation Safety Nets: Systems, over 20 percentage points more likely to use fertilizers and invest in land improvements. The increased agricultural self- Technology and Urban Contexts reliance, in turn, also helps to protect poor and vulnerable Building systems and reducing fragmentation. Basic families against calamitous food shortages. systems of safety nets help enhance the performance, coor- dination, synergies and coverage of programs. In Romania, the Social Assistance Reform Strategy and Action Reforming Energy Subsidies to Plan 2011–2013 is consolidating all means-tested safety nets into a single program targeting low-income households. Reduce Global Carbon Emissions and In complement with other reforms, the number of safety Fiscal Gaps: The Role of Safety Nets net programs will be reduced by one-third (21 to 14) be- tween 2010 and 2013. At the same time, payments will be It is often argued that low-income countries and fragile made by a single actor (National Agency for Social Benefits) states have limited fiscal space for financing adequate with a unique management information system. Similar initia- safety nets. One way of expanding the resource base is to tives are underway in other MICs and LICs. rationalize spending on certain measures like subsidies for energy. “Leapfrogging� through technology. Safety net pro- grams are using a wide variety of technology—from mobile In most cases, energy subsidies are regressive (benefit phones to smart cards, from internet-based monitoring the non-poor), as a result of their universal nature and the to harmonized databases—in order to leapfrog barriers to spending patterns of the poor. Currently, about 42 devel- development. For example, the Benazir Income Support oping countries have those measures in place. The impact Program (BISP) in Pakistan is currently delivering cash of redesigning energy subsidies would be two-fold, lower- transfers electronically to nearly 70 percent of benefi- ing the global carbon foot print and accelerating poverty ciaries, or 3.5 million households. Since its launch, more reduction. than 15 million BISP women beneficiaries have registered for a Computerized National Identity Card, which also lets In regions such as the Middle East and North Africa, energy them vote and access financial services. In Sub-Saharan subsidies account for about 8.5 percent of regional GDP Africa, where more than 60 percent of the poor have access (or 22 percent of government spending). Budgets allocated to mobile phones, programs are beginning to use them for for energy subsidies tend to dwarf financing for targeted safe and efficient delivery of cash transfers on a significant safety net transfers. For example, in Benin, a total of US$22 scale, including in challenging environments. million is spent on safety nets while ten times more, or some US$240 million, is allocated to subsidies. In Tajiki- Adapting to urban challenges. As urbanization in the stan, that ratio is US$80 million to US$280 million, while in developing world increases, poverty tends to concentrate the Kyrgyz Republic it is US$120 million to US$650 million. in urban areas. For example, in Kenya, more than half of Nairobi’s people are estimated to live on 5 percent of the city’s total land area. Only 7 percent of households living in slums have access to piped water and electricity, while By Directing Just Half of the Spending about three-quarters are poor. The different nature of poverty and vulnerabilities that characterize urban areas implies a On Energy Subsidies to Targeted range of analytical and operational adjustments (e.g., as- Safety Nets, 27 Million more People sessments and targeting) for social protection interventions. Can Climb Out of Absolute Poverty. A cash transfer program in Korogocho, Kenya, an electronic urban food voucher scheme in the Gaza strip and Familias Of These, About 10 Million Live in en Acción in Colombia are part of a new generation of Low-income Countries. programs testing innovative ways on how to assist the poor with safety nets in urban contexts. Closing the Gap: The State of Social Safety Nets 2013 The World Bank’s Contribution to RSR: Helping Build Safety Nets Building Safety Nets Where They are Most Needed Growing financing and engagement in safety nets. In Unlocking the capacity trap. The RSR helps IDA coun- FY10–12, the World Bank-financed portfolio of safety nets tries strengthen systems for delivering social protection. totaled US$6.7 billion. This represents a five-fold increase It does so through helping countries build the basic com- for both IBRD and IDA countries compared to FY04–06. ponents of social protection systems, and helping them ibrd 40 april 2 Between FY09–12, a total of 30 countries with limited or access and enhance knowledge and evidence about what no previous World Bank engagement received financing for works and what does not. The program was first established safety net expansion. in 2009 with contributions from the Russian Federation, Norway and the United Kingdom. In 2012, Australia and Closing the gap between IDA and IBRD-eligible Sweden joined RSR as new donors. countries. For the first time, lending allocated for safety net activities in IDA-eligible countries matched IBRD Focus where challenges are greatest. RSR provides countries. Still, substantial IBRD financing commitments catalytic resources in relatively small amounts. However, reflect the mature nature of these programs, including its impact is often transformative and helps attract sizeable investing in second-generational issues (e.g., systems) resources. During the first three years, US$ 61.7 million of and becoming key vehicles for sharing South-South RSR has supported RSR resources38 in 32 countries, projects US$ catalyzed leadingof 2.8 billion-worth initiation toIDA re- and knowledge. At the same time, there is a new generation of improvement sources for of 41social in 34 systems protection projects countries, particularly in Africa. promising interventions in MICs, including in the Philip- pines and Vietnam. A diversified mix of safety net activities and social protection interventions. The World Bank has an ongo- ing engagement in safety nets in 88 countries. Out of these, 60 are engaged in both financing and knowledge activi- ties, while the remaining participate in one activity or the other. As country systems develop, safety nets are being combined and integrated with other social protection and multi-sector interventions such as youth training, skills and entrepreneurship (e.g., Tanzania and Sri Lanka). The World Bank’s new Social Protection and Labor Strat- RSR supports 83 projects in 42 countries, egy 2012–2022 sets out the institution’s vision and frame- including supporting large-scale initiatives (light blue and work to provide resilience for the vulnerable, equity for the light green) and pilot programs (pink) leading to initiation poor and opportunity for all. and improvement of social protection systems. RAPID SOCIAL RESPONSE www.worldbank.org/sp www.worldbank.org/rsr