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Effectiveness of Targeted Food-Assistance Programs

Effectiveness of Targeted Food-Assistance Programs. October 23 rd , 2002. Public Social Safety Net. Total safety net spending: 1% of GDP; 6% of total govt. expenditures Multiple Programs serving diverse objectives:

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Effectiveness of Targeted Food-Assistance Programs

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  1. Effectiveness of Targeted Food-Assistance Programs October 23rd, 2002

  2. Public Social Safety Net Total safety net spending: 1% of GDP; 6% of total govt. expenditures Multiple Programs serving diverse objectives: • Cash Transfer Programs (Orphanages, Pensions, Cash assistance to Freedom Fighters, Women’s social welfare centers, Housing fund) • Food-Assisted Workfare Programs • Food-for-Work (FFW) –9,920 Tk. Million • Test Relief (TR) –1,452 Tk. Million • Food-Assisted Development Programs • Food-for-Education(FFE) –4,610 Tk. Million, recently monetized • Vulnerable Group Development (VGD) –2,294 Tk. Million • Food-Assisted Relief Programs • Vulnerable Group Feeding (VGF) –218 Tk. Million • Gratuitous Relief (GR) –291 Tk. Million

  3. Allocations to Food-Assistance Programs Gradual evolution in emphasis from relief to development objectives

  4. Targeting and Coverage of Rural Population • Programs are well targeted towards poor households: • Poorest fifth nearly five times more likely to participate than the richest fifth • But, only a small percent of the poor have access: • Jointly, the three programs cover 10% of the rural population • Only 18% of the poorest fifth participates in any program • Over 80% of the population eligible for VGF and FFE not served

  5. Measures to Improve Targeting • Refine criteria for selection of beneficiaries: • Currently, one-fourth of population satisfying eligibility criteria is from the richest 40% of the population • Criteria should be closely correlated with incomes but should not entail excessive screening costs • Implement geographic targeting to concentrate resources in poor areas: • Only few programs (VGD, RD-FFW, partly FFE) attempt regional targeting; Most allocate resources across districts according to population • Considerable scope for improving geographic targeting of poor areas – pro-poor targeting is mainly due to targeting of the poor within communities • Potentially high payoffs to developing a poverty map

  6. Assessment of Leakage • Survey estimates of aggregate transfers are much lower than program off-take statistics • Percent food grains unaccounted for: -- 41% in the VGD -- 35% in the VGF -- 75% in the FFE A large share of budgeted resources appears not to reach any beneficiaries, negating any definitive conclusion about pro-poor impact.

  7. Assessment of Leakage (contd). • What explains the discrepancy between official records and survey-based estimates of program outlays? • Actual number of beneficiaries is lower than the official estimates – FFE & VGF • Beneficiaries receive less than their full entitlement – case of the VGD • Worrisome trend of increasing leakage over time: • 1995-96 HES based estimates indicate substantially lower leakage in the case of the FFE

  8. Stemming leakage offers a win-win situation Reforming program administration to reduce leakage, rather than expanding resources allocated to safety net programs, should be the highest priority. • Number of beneficiaries can be increased at little additional cost • Freed-up resources are more likely to benefit the poor than the rich

  9. Measures to Reduce Leakage • Improve program administration. Possible actions related to program design include: • Emulate design features of other programs with lower system losses (e.g., Female Secondary Stipend program) • Pilot new initiatives such as smart cards • Experiment with alternative payment systems (e.g., RMP) • Strengthen participation of local bodies • Strengthen Monitoring and Evaluation Systems: • Internal and external audits • Periodic survey-based assessments • Participatory Monitoring and Evaluation • Public expenditure tracking surveys (PETS) • Citizens report cards

  10. Additional Considerations for Improving the Impact of the Public Safety Net • Balance between relief and development focused programs: • Development impact crucial, as food transfers are small relative to total food expenditures • Important to retain some relief programs that can be rapidly scaled-up in times of natural disasters • Rationale for holding public foodgrain stocks to stabilize prices is weak: • Seasonal variability in prices much reduced • Pockets of seasonal vulnerability (geographic areas and specific groups) justify targeted programs : need to modify FFW? • Complementary community-level interventions of non-food components also an important element for improving development impact

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