80247 May 2013, Number 98 IMPLEMENTING AN ADVANCED CASH TRANSFER PROGRAM IN THE PALESTINIAN TERRITORIES Samira Hillis, Phillippe Leite, Laura McDonald, and and development partners. To date, the World Lillian Frost1 Bank’s work in PT’s SP sector has been an essential part of its global effort to address Introduction: The Palestinian Authority (PA)- poverty, unemployment, and high population administered Cash Transfer Program (CTP) is growth. considered one of the most advanced cash assistance programs in the Middle East and Challenges: When the SSNRP was designed in North Africa (MENA) region. 2 Using its 2003, it was widely acknowledged that more sophisticated management information system effective Social Assistance mechanisms were (MIS), which includes a poverty-targeting needed to protect and promote the health and database, it provides timely quarterly payments well-being of Palestinians, including its most to beneficiary households using a uniform vulnerable groups, as well as to reduce payment modality. The CTP was established, malnutrition. Despite high levels of donor with support from the PA, after a merger funding, the social assistance sector lacked between the World Bank-funded Social Safety coordination and did not have an effective Net Reform Project (SSNRP) and the European poverty-targeting mechanism, which resulted Union (EU)-funded Special Hardship Case inefficient use of scarce resources. Although (SHC) program in 2010. Since the CTP provided MOSA was responsible for social assistance at its first payment to households in the that time, its limited institutional capacity Palestinian Territories (PT) that year, the prevented it from dramatically reforming the number of beneficiary households has Social Safety Net (SSN) and from managing an increased by almost 59% reaching almost advanced, large-scale cash assistance program. 100,000 households. The World Bank played an Further, there was no national strategy or important role in encouraging the PA to adopt action plan to inform and guide SP initiatives. this unified cash assistance program, which relies on a proxy means test formula (PMTF) for To address some of these limitations hampering targeting. The Ministry of Social Affairs the effective functioning of the sector, the (MOSA) leads the social protection (SP) sector World Bank promoted deep policy reforms in in PT which is characterized by a high-degree 2004. These suggested modifications, with of coordination and collaboration with the PA World Bank support, represented a dramatic shift in SSN policy and included (1) an emphasis on providing assistance first and 1 Samira Ahmed Hillis (Senior Operations Officer), foremost to extremely poor households as a Phillippe Leite (Senior Social Protection Economist), Laura McDonald (Consultant), and Lillian Frost (Consultant), The mechanism to assist the chronic poor for a World Bank. This Quick Note was cleared by Yasser El- specified period of time and (2) a reliance on a Gammal, Sector Manager, Human Development Group, PMTF, rather than categorical measures, for Middle East and North Africa Region (MNSHD), The targeting. To effectively institute and World Bank. 2 World Bank, “Inclusion and Resilience: The Way Forward administer these changes, MOSA staff had to for Social Safety Nets in the Middle East and North Africa,� provide support at the central, district, and MENA Development Report, 72975, September 2012. local levels. At the central level, MOSA needed on donor funding and the difficulties faced in to undertake policy and legislative reforms to graduating households no longer eligible for acquire the necessary government support to CTP assistance. establish and operate a sophisticated MIS with linkages to district offices across PT. At the Responses: In order to address each of these district and local levels, MOSA staff needed to challenges, the Bank adopted a number of support the verification of households for important measures. First, capacity-building program eligibility while carrying out the within MOSA remained a central feature of all necessary application, enrollment, and Bank projects in the SP sector. Such activities certification processes. ranged from training in operations, financial management, and procurement, to information The Bank and other sector partners faced the technology support at all levels, to exposure to challenges of coordinating efforts, securing other successful experiences around the world. support for the new approach, and In addition, throughout project strengthening MOSA’s capacity to implement implementation, central and district staff and manage the new program. However, these participated in a variety of training exercises challenges were gradually overcome as the PA useful for continued and improved demonstrated its ability to scale up cash implementation of the CTP. The projects also assistance through the provision of two supported training for social workers in data emergency one-time payments to collection and interview methods relevant for approximately 25,000 households, funded by field-level responsibilities (including household the Food Price Crisis Response Trust Fund in visits and processing household applications). 2009 and 2010. These and other advances in the The Bank’s emphasis on capacity-building has sector were strengthened further with the facilitated MOSA’s work, including in program development of a national SP strategy and an management, strategy development, and the accompanying action plan as well as the effective use of the sophisticated MIS. These establishment of a framework for cooperation efforts also played an important role in placing among partners in the sector. Each of these MOSA in the “driver’s seat� of sector reform achievements paved the way for the new, and allowing the Ministry to demonstrate its unified CTP, which used a fortified MIS with credibility and competencies in administering web-based applications linking the central and and managing one of the most advanced cash district offices to provide its first joint payment assistance programs in the region. In addition, in 2010. This payment used a uniform benefit coordination and cooperation among sector level for the first time, whereby the amount of partners in PT has strengthened under MOSA’s cash assistance received by a beneficiary leadership of SSN programs. For example, all household did not vary depending on the partners have had access to and many rely on funding source (i.e., the EU, World Bank, or the poverty-targeting database that MOSA PA) and payments were provided using a manages, for designing and targeting their own uniform method (initially through vouchers programs. The World Food Program (WFP), for and later through beneficiary bank accounts). instance, has used the unified database to provide food aid to poor households. Although eligibility reviews and other checks provided evidence that the CTP was largely The Bank also used its presence in the PT effective, its fast-paced expansion from country offices as well as its strong relationship reaching around 63,000 households in 2010 to with donors and the PA to provide guidance on covering almost 97,000 households in 2013 has critical issues. For instance, the Bank created some serious challenges for MOSA, emphasized the importance of ensuring Gaza’s including: the exclusion of extremely poor inclusion in the program, despite the households that have not been identified, difficulties in program administration and potential targeting errors (based in part on implementation because of the security complaints received that pointed to exclusion situation there. The Bank also encouraged and inclusion errors), and the issue of ensuring MOSA to undertake reforms in Gaza as soon as the CTP’s sustainability given its high reliance possible (including using an updated PMTF to May 2013 · Number 98· 2 select CTP beneficiaries) and to include Gaza in other programs that are widely considered capacity-building activities as much as possible successful (e.g., Bolsa Familia in Brazil and (such as training social workers). Further, the Oportunidades in Mexico). Furthermore, the Bank continued its dialogue with MOSA on the assessment provided evidence that the CTP is CTP’s sustainability, highlighting that it would highly efficient—with cost-benefit ratio depend largely on continued funding and analyses showing that for each New Israeli support and that it would be politically Shekel (NIS) 1 spent in transfers by MOSA, NIS challenging to remove households from the 0.66 goes to reducing the extreme poverty gap program who are no longer eligible. (see Figure 1 below from the assessment which compares the cost-benefit ratios found in Although the Bank provided significantly less analyses of other countries’ programs to those funding (around US$5 million annually) than found in PT). the EU (approximately Euros 40 million annually) to the SP sector as a whole, the Bank Figure 1: Cost-Benefit Ratio of Cash Transfer leveraged its position to encourage the EU to Programs use the PMTF for targeting and to combine its efforts with the Bank and PA into one centrally managed and unified national CTP. The Bank also facilitated inter-agency collaboration in lending and in technical assistance activities among sector partners including: WFP, United Nations Relief and Works Agency, United Nations Children’s Fund (UNICEF), the UK’s Department for International Development (DFID), non-governmental organizations, and governmental bodies (e.g., MOSA and the Palestinian Central Bureau of Statistics). Taking a strengthened, coordinated approach to the provision of SA was central to establishing a successful, well-targeted SSN. In 2012, MOSA also asked the Bank to undertake a targeting assessment to assess the CTP’s strengths and its targeting accuracy, to identify the program’s weaknesses and modify as needed. This used a household study design as well as a multi-module survey instrument and was guided by input from key development partners. The study also used a nationally representative sample with data from more than 3,400 randomly selected households (which consisted of beneficiaries and non-beneficiaries, including non- beneficiaries who had not applied). The assessment’s final report concluded that the PMTF is highly accurate and that the large Results: In addition to supporting the PA in majority of MOSA applicants are extremely establishing one of the most advanced cash poor.3 In addition, this study found that the assistance programs in the region, the Bank has PMTF correctly identified almost 70% of cases, played a key role in harmonizing efforts in the with exclusion and inclusion errors lower than sector and supporting capacity-building within MOSA, which will remain important to the 3 World Bank, “West Bank and Gaza Targeting Assessment CTP’s overall sustainability. The technical of the Cash Transfer Program,� Report ACS890, June 2012. May 2013 · Number 98· 3 assistance described above as well as the practice in terms of creating and using a unified introduction of a system for beneficiaries to file registry of beneficiaries, but also in terms of grievances and complaints have further being the “only area in the region with SSN strengthened the credibility of the CTP, coverage above the world average; the area demonstrating its effectiveness while where SSN transfers have the greatest impact highlighting the PA’s commitment to help on the welfare of the poorest quintile in the those in need. Furthermore, this assistance has region as well as have a higher impact on strengthened coordination and collaboration poverty than is observed in the best-performing among partners and will, with support from regions; and an area where M&E is effectively the second phase of the Bank’s targeting used to inform budgetary decisions and assessment (which will be completed in June reshape programs.�4 These acknowledgements 2013), inform revisions to the PMTF and of the CTP’s success emphasize MOSA’s Palestinian Household Expenditure and remarkable progress, with Bank and other Consumption Survey in 2014. Overall, this partners’ support, in addressing and emphasis on technical assistance aims to overcoming challenges to implementing SSN solidify achievements to date and ensure that a programs. well-functioning, effectively targeted, and sustainable cash transfer program is maintained as a key feature of the SP sector strategy and an important measure in reducing poverty and assisting PT’s most vulnerable households. The Bank’s emphasis on better understanding the CTP’s targeting and functioning at the field- level has also led to increased interest among other partners in undertaking additional research and in enhancing MOSA’s monitoring and evaluation (M&E) system. For example, the Overseas Development Institute (ODI), contracted by DFID, recently completed a report on beneficiary and community perspectives of the CTP, which was widely disseminated and discussed during stakeholder workshops in March 2013. The EU and UNICEF are also in the process of conducting research related to the impact of the CTP, with a particular emphasis on vulnerable groups, and WFP is helping MOSA develop a long-term log framework. Conclusion: Today, the CTP is widely considered a “best practice� in the MENA region and MOSA has gained international recognition for the success of its reform efforts, with an invitation to showcase the CTP as part of the 2013 “Community of Practice� events. The CTP’s achievements have also been highlighted in the Bank’s 2012 MENA Development Report, “Inclusion and Resilience: The Way Forward for Social Safety 4 World Bank, “Inclusion and Resilience: The Way Forward Nets in the Middle East and North Africa.� This for Social Safety Nets in the Middle East and North Africa,� report found that the CTP is not only a best MENA Development Report, 72975, September 2012. May 2013 · Number 98· 4