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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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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
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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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
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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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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/
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