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Eradicating Extreme Poverty: Global Lessons on Graduation and Building Resilience

Syed M HashemiBRAC University

Presentation prepared for the conference on

Towards Sustained Eradication of Extreme Poverty in Bangladesh

NEC Conference Room, Planning Commission

8-9 April 2015

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What is social protection?

• ... a set of transfers and services • that help individuals and households

• confront risk and adversity • (including emergencies) and ensure

• a minimum standard of dignity • and well–being

• throughout the life–cycle.

Source: Michael Samson

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Emergence of Social Protection

1980s: Safety nets introduced in response to structural adjustment programs

1990: WDR: Safety nets, one of three components of global poverty reduction strategy

1997: Financial crisis in Asia, Latin America, Eastern Europe 2001: World Bank: Social risk management framework

Rights based social protection (From risk management to promoting social justice)

IDS: transformative social protection ILO: social protection floor

UNICEF: child support and Intergenerational support

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The Lifecycle Approach: Risks and Vulnerabilities Faced by People Across their Lives

Source: Dr. Stephen Kidd, September 2013

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Components of Social Protection System

Labour policy and insurancee.g. contributory pensions,

unemployment benefits, health insurance, minimum wage

Social safety netsTransfer (non contributory) and subsidies Social sector policy

Services and infrastructure for education, health, nutrition, HIV/AIDS,

agriculture, etc.

e.g. Weather insurance

Social Protection

e.g. Health clinics, classrooms

e.g. Cash transfersConditional cash transfersFood transfersConditional food transfers (e.g. school feeding)Public/community worksVouchersPrice subsidies

Source: Gentilini, Ugo&Omamo, Steven Were, 2009

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Conditional cash transfers Unconditional cash transfers Conditional in-kind transfers Unconditional in-kind transfers Public works programs

Typology of Safety Net Programs

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Global Coverage of Safety Nets

Over 1 billion people have safety net coverage However, only 345 million extreme poor are covered Only 1 out of 5 extreme poor are covered in low income countries But there has been an exponential growth in social safety nets,

especially cash-based programs Every country has at least one social safety net program in place. Aggregate spending of social safety nets rises as countries get richer,

but still averages just 1.6 per-cent of GDP A quarter of spending on social safety nets is for the poorest 20

percent of households, but generally it is insufficient to lift them out of poverty

Countries are moving from ad-hoc social safety net interventions to more integrated and efficient social protection systems

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Major Social Safety Net Programs(millions of people covered)

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Safety Nets Impacts

Safety nets achieve visible results in reducing poverty Reductions in headcount poverty on average by 8 percent

and the poverty gap by 17 percent Safety nets reduce global extreme poverty by 3 percent and

help move 50 million people above the poverty line The poverty-reducing effects are greater where coverage is

higher and more generous transfers are provided Progressive impacts can lead to reduction in inequality For

example, Romania reduced its inequality by 14 %

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Safety Nets Impacts

World Bank’s Independent Evaluation Group in 2011 concluded that evidence on social safety nets is “richer than most other areas of social policy” and that “each intervention has positive impacts on the original objectives set out in the programs.”

New evaluations continue to show positive short-term results on household consumption, school attendance, children’s health and labor supply, and provide new evidence on local economy effects and long-term sustainability.

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Creating Pathways for the Poorest

safety nets alone are insufficient for the poorest

promotiontransformation

protectionprevention

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Microfinance Does Not Reach the Poorest

DestituteExtreme

PoorModerate

PoorVulnerable Non-Poor Non-Poor Wealthy

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The Graduation Model: Carefully Sequenced Interventions

Research Sites

Haiti Ethiopia

Yemen

IndiaPakistan

Peru

Honduras

Pilot Sites CGAP – Ford Foundation Graduation Pilots

Ghana

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Program Evaluation

Evaluation Method

Description Organizations Pilot Country

Quantitative Randomized Control Trials

IPA, J-PAL, NYU

India, Pakistan, Ethiopia, Honduras, Peru,, Ghana

Qualitative Life histories to classify participants based on their progress (fast and slow climbers)

BDI and IPA India, Pakistan, Ethiopia, Yemen, Honduras, Peru, Ghana

Mixed Method Combination of quantitative and qualitative methods

BDI and IDS Haiti

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Selected RCT Results

In 4 of 6 sites – India, Pakistan, Ethiopia, Peru – strong positive impacts recorded after three years; significant increases in

Total per capita household consumption Monthly food consumption Food security Total annual household income Asset ownership

But context, location, and choices in program implementation affects results

Source: FordFoundation

Impact: Bandhan, India

•Data from Endline 2 Survey (2011)

•Higher proportion of females with financial assets in treatment group

•Adults and children less likely to skip meals in the treatment group

•Increased awareness of hygiene may have led to a healthier population, regardless of program participation

Food Securit

y

Borrowing

Ownership of li

vestock

and durables

% Females with

Financial A

ssets

Number of d

ays unable to

work due to

illness

0

0.2

0.4

0.6

0.8

Control Treatment

RESULTS AND IMPACT

• In Bangladesh, more than 95% of participants achieve graduation with 92% crossing an ultra- poverty threshold of 50 cents per day and maintaining their improved conditions for the next 4 years

• Internationally, reports from the CGAP - Ford pilots show that in 18-36 months, 75% to 98% of participants meet the country specific graduation criteria

RESULTS AND IMPACT : BRAC RCT

4 years after the start of the programme (2 years after its end) the portion of participants entirely self employed increases from 30% to 47%- no notable change among control

Percentage of participants relying solely on wage labor declined from 26% to 6% over the same period- little change among control.

Reduction in seasonality More even allocation of hours across

days

BRAC: Briefing Note, based on Robin Burgess (LSE and IGC)

RESULTS AND IMPACT : BRAC RCT

Among participants, a 33% increase in earnings within 2 years (period of intervention)

Among participants, 38% increase in earnings within 4 years

Higher gains than control Savings Increases:

818% after 2 years875% after 4 years

Consumption Increases:8% increase after 2 years15% increase after 4 years

Investment in land: 38% increase after 4 years Changes in occupational choices were

accompanied by increase in income, expenditure and food security achieved

BRAC: Briefing Note, based on Robin Burgess (LSE and IGC)

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Typology of Extreme Poor Participants

Constraints

• No vertical social networks

• Low earner – dependent ratio

• No cooperative male

• Lack of previous experience

• Health shocks

Resources

• Existence of vertical relationships

• High earner-dependent ratio

• Cooperative male in household

•Previous experience•Demonstrating agency

LESS DYNAMIC | MORE DYNAMIC

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Poverty Traps

HAITI Political instability Natural disasters

Lack of infrastructure Male irresponsibility

INDIA Caste-based poverty and

landlessness High salinity and marshlands

Politicized access to state entitlements

Male irresponsibility

PAKISTAN Purdah: limited mobility of

women Reliance on middlemen

Lack of networks with the elite

Poor health and education services

ETHIOPIA Environmental degradation Absence of vertical networks

Isolation and poor transportation

Dependence on state safety nets

CONTEXT MATTERS

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Process of Change Matrix

Possessed “success” factors

More resources than constraints

Program “strengthened” their positive trajectory

Negative circumstances - trajectory naturally “devolved”

Program failed to provide enough of a safety net

Program succeeded in transforming trajectory Acquired success factors through program and “transformed” their trajectory

Lacked “success factors”

Constraints unaddressed Program failed to bring about change

FAST CLIMBERSSLOW CLIMBERS

Less Dynamic – More Dynamic

In program

Pre

-pro

gra

mL

ess

Dyn

am

ic –

More

D

ynam

ic

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Key Elements: forming strategic partnerships

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Growing Interest in the Graduation Approach

• Graduation approach is being adapted and tried by NGOs and governments in a number of countries – Afghanistan– Peru– Ethiopia– Colombia– Brazil– South Africa– Indonesia– Ghana– Kenya

• Many donor agencies interested in promotion:– World Bank– IFAD– AusAid– UNHCR

BRAC

CGAP-Ford Foundation Graduation PilotsScaling up

New/upcoming adaptations

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Pathway to Scale

• Integrate graduation approach into government social protection programs or other large anti-poverty programs

• Why? Government programs reach large numbers of people Graduation approach subsidy can’t be provided at scale by

philanthropy Growing interest from government because existing programs are

not putting very poor households on a pathway out of poverty• How to accomplish this?

Work with governments to adapt the graduation approach to their contexts and needs

Create community of practice for governments to share experiences

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Developing an Analytical Framework for Action: Challenging Extreme Poverty

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Policy Implications

• Holistic model: integrating micro, meso and macro

• Focus on graduation: multiple pathways

• Consistent and continuous engagement

• Different entry points for different stakeholders

• Categorize poorest: determine diverse pathways

• Agency for poor people

Thank you

For more information, please visit http://graduation.cgap.org/