World Bank Support to Social Safety Nets

Challenge: The most recent global economic crisis highlighted the importance of good social safety nets for reducing poverty and vulnerability. Countries with effective safety net programs used them to respond to the crises, while countries without such programs had to rely on ad hoc and less-effective responses. Growing evidence of the positive impacts of safety net programs in low- and middle-income countries as diverse as Ethiopia, Rwanda, and Brazil has also helped place safety nets firmly on the development agenda. The increase in understanding has paved the way for expanded work on safety nets as part of a long-term poverty reduction program and not just in times of crisis. Allied to this we see an emerging richness of integrated social protection arrangements across client countries. As country systems develop there is an increasing focus on combining safety net with other social protection and multi-sector interventions, including youth training, skills, and entrepreneurship.  However, in this context, many developing countries face certain obvious challenges in designing and implementing social safety nets, in particular in matching institutional capacity, physical infrastructure, and financial capacity with high demand.  As a result, governments often face hard choices about the type, affordability, and sustainability of social protection initiatives, particularly in fragile states. 

Solution: The Bank supports sustainable and affordable safety net programs that protect families from shocks; help ensure that children grow up healthy, well-fed, and stay in school and learn; empower women and girls; and create jobs. Building safety nets is a key component of the Bank’s broader Social Protection and Labor Strategy 2012-2022, which is aims to help countries move from fragmented programs to social protection systems in order to expand the coverage, improve resilience, and be more productive through investments in human capital and people’s ability to access jobs and opportunity, breaking the cycle of poverty.

The strategy has met wide-ranging support among client countries and donors. Its implementation puts an emphasis on current challenges: first, lack of capacity to run effective and scalable social protection where needs are the greatest, in poorest countries and fragile states; and, second, keeping political and fiscal commitments to systems for improved coverage and resilience after the crisis, in “normal” times. To respond to these challenges the social protection practice of the Bank is developing country-tailored tools and approaches (including the new Social Protection Assessment of Results and Country Systems, SPARCS); investing in knowledge, data, and analysis; providing rapid-reaction policy advice (through Social Safety Nets Global Expert Team); and undertaking continuous technical assistance and capacity-building. In particular, the Bank’s Rapid Social Response program is helping low-income countries build or strengthen social protection systems that will reduce the long-term poverty and human development impacts of crisis and shocks, both by directly providing funds and by having a catalytic effect and drawing in other resources, in particular the International Development Association (IDA) and partners .

The Bank supports a diverse set of safety net interventions, ranging from cash transfers to labor-intensive public works to school feeding programs. Bank financing for safety nets and other social protection and labor programs over FY 01-FY13 reached $24.8 billion (including $7.8 billion in IDA); in safety nets alone, during the same period, 107 countries and regions benefited from Bank projects totaling $14.6 billion (including $3.8 billion in IDA). In response to waves of financial, food, and fuel crises, the Bank almost tripled its support for these programs from an annual average of $1.6 billion in 1998-2008 to an annual average of $4.2 billion in 2009-11. This fast response while maintaining high quality of projects programs is regarded as one of the strengths of the Bank by the Independent Evaluation Group.

To meet this challenge, the Bank is providing technical assistance, promoting cross-country learning, and building an evidence base to determine which interventions work in diverse contexts for enhancing earning opportunities, protecting households from shocks, and making services work for the poor.

Recent trends in low-income and fragile contexts include:

• The global expansion of safety nets in response to the crisis, has included an increasing focus on low-income IDA countries. Between FY09-12 a total of 30 countries with limited or no previous engagement with the Bank received financing for safety net expansion. At the onset of the crisis in FY07-08, there were a total of 24 lending operations supporting social safety net programs in IDA-eligible countries. This number almost doubled in FY11-12, totaling 46 operations. The region of Africa has witnessed a revolution in safety nets, in particular cash transfer operations. Since FY2010, 12 countries with no or limited prior engagement with the Bank on safety nets received financing, including: Guinea-Bissau, Comoros, Liberia, Seychelles, Central African Republic, Lesotho, Swaziland, Cote d'Ivoire, Guinea, Mauritius, Togo, and Zimbabwe.
• There has been sustained investment to engage in safety nets as some of the most deleterious crisis impacts have faded. Continued investments in safety nets post-crisis highlight the importance of building systems that are appropriate during crises and stable times. A number of countries have built strongly on their crisis engagement to enhance their safety net systems, including Pakistan, Rwanda, Bangladesh, Honduras, Tajikistan, and Kenya. Efforts are being made to improve the implementation of existing programs and test new ways to effectively move vulnerable households out of poverty. Targeting, payment systems, monitoring and evaluation, and governance are key building blocks for the success of safety net systems As they evolve countries are building a diversified mix of interventions, combining safety nets with other multi-sectoral or social protection strategies.
• Cash transfers are increasingly becoming an important instrument, particularly as know-how on effective payment systems and targeting is improved. Increased cash transfer activity has been especially prominent in post-conflict and fragile contexts. For FY02-13, the Bank supported 84 cash transfer/social assistance programs in 47 countries, and 58 conditional cash transfer (CCT) programs in 30 countries. At outset of crises, FY07-08, there were a total of eight CCT and nine unconditional cash transfer (UCT) programs worldwide supported by the Bank. During the crisis period, FY09-10, the number more than doubled for CCTs, up to 18, and nearly tripled for UCTs, totaling 24.
• A large share of financing has also been devoted to public works programs. Public works and workfare programs generate temporary jobs and income, particularly for low-skill workers, through labor-intensive infrastructure investments. For FY02-13, 81 Bank lending activities supported public works programs in 49 countries (accounting for 22% of the total lending activities during the same period). At outset of crises, FY07-08, there were a total seven public works programs supported by the Bank. The number more than tripled during the crisis period FY09-10, with a total of 22 Bank lending operations supporting public works programs worldwide. For FY09-10, 55% of all public works programs were in Africa (which account for nearly 50% of total amounts allocated to SSN during the same time period).
• Knowledge services have comprised a critical component of support to the safety nets agenda, especially in low-capacity contexts where implementation capacity is weak, for example, South Sudan and East Timor. Between 2009-2012 the Bank conducted a total of 60 safety net assessments, covering 40 countries in four regions.

Results

The Bank is achieving tangible results in its support for safety net interventions. This includes success in established programs, as well as in initiatives introduced in response to the global crisis. Support for social safety nets in the poorest countries is gradually evolving. Safety net program results in countries working with IDA have reinforced the position of safety nets in the overall development agenda. Major results of the Bank support to safety net program includes:

• On average, in the last three years, 114 million of the poorest people benefited from safety nets through Bank-supported programs;
• In FY12 alone, 36 investment and policy lending operations have been initiated to improve the coverage of social safety nets;
• With the support of Rapid Social Response fund in the last three years the Bank initiated the work on safety nets in 19 poorest countries with lowest capacity in social protection and no prior engagement in this policy area.

In IDA countries, country-level results include:

• Ethiopia’s Productive Safety Net Program for chronically food insecure households in rural Ethiopia has expanded the coverage significantly, covering some 7.6 million clients in 319 rural woredas of Ethiopia in 2012 (or 8% of Ethiopia’s population). The program responded rapidly and effectively to food crisis in 2008 and to more recent Horn of Africa food crisis (2011).
• In 2008, the government of Pakistan launched an extensive social protection program, providing cash transfers to the most vulnerable households. Within ten months, the program had provided cash transfers to 2.2 million families. By June 2012, Benazir Income Support Program (BISP) collected information on 7.15 million poor families, of which 4.2 million (about 15% of households in Pakistan) are currently receiving regular cash transfers.
• In response to the food price crisis in Liberia, the Bank has supported a Cash for Works Temporary Employment Program, providing more than 640,000 days of employment to more than 17,000 beneficiaries. It is now mainstreamed into social protection system for the country.
• Kenya: Cash Transfers for Orphans and Vulnerable Children, increased from 82,371 households in FY09/10 to 124,691 households in FY10/11. As of 2012, 134,431 households were enrolled in the program and receiving regular payments, of which 50,094 were supported by the Bank.
• Honduras: The conditional cash transfer program “Bono” has expanded the coverage, reaching 350,000 households (about 20% of the population) in 2012. The number of active beneficiary households with regular payments is at around 260,000 (about half of rural poor). The baseline of the program impact evaluation has shown excellent targeting accuracy.
• Yemen: In the course of year 2011, the number of beneficiaries of the Social Welfare Fund cash transfer program increased from 1,046 million to 1,510 million households (equivalent to 6.9 million people) in 2011. The new benefit was allocated using a poverty-based targeting (proxy means testing). In addition to providing technical assistance, the Bank also financed cash transfers to about 40,000 households.

A large number of safety net programs in Latin America and other middle-income International Bank for Reconstruction and Development (IBRD) countries have been scaled up in response to the financial crisis. Safety net programs in middle-income countries have shown tremendous dynamism, and the success of these programs is catalyzing new projects across the globe. Results include:

• Bank support to Mexico’s Oportunidades conditional cash transfer program benefits 5.8 million families; increases health, nutritional, and educational coverage and quality; and supports an increase in the number of children advancing from primary to secondary school and from secondary to high school.
• In February 2008, the government of the Philippines launched a CCT pilot with just 6,000 households, in response to the food crisis. With Bank support by end-2009, the program had 700,000 household beneficiaries nationwide. Coverage increased to 2.3 million in 2011 and 3 million in 2012. It is estimated that the program now covers about 60% of the poor households.
• In Brazil, the Bank-supported Bolsa Familia program covers 12 million poor households (about 25% of the population) by providing monthly payments to families that send their children to school, meet vaccination requirements, and utilize health services. This program has been instrumental in reducing poverty and inequality in the country.
• Peru: JUNTOS conditional cash transfer program, with a budget of approximately $330 million or 0.16 percent of GDP in 2012, is covering over 550,000 households in 703 districts in the poorest 20 regions The government plans to continue expanding coverage by progressively incorporating new regions into the program until reaching the whole country.

Link to MDGs

• 1 - Eradicate extreme poverty and hunger
• 2 - Achieve universal primary education
• 3 - Promote gender equality and empower women
• 4 - Reduce child mortality
• 5 - Improve maternal health
• 6 - Combat HIV/AIDS, malaria and other diseases
• 8 - Develop a global partnership for development

Bank Contribution

Between FY01-12 the Bank financed safety net operations in 107 countries totaling $14.6 billion, including $3.8 billion in IDA. In response to the triple wave of financial, food, and fuel crises, the Bank almost tripled its support for these programs from an annual average of $1.6 billion in 1998-2008 to an annual average of $4.3 billion in 2009-11. During the last six years, Bank-financed safety net projects have directly benefited more than 267 million people, mainly through CCT programs (94.5 million), other cash assistance transfers (78.5 million), and public works (12.8 million).

In addition to regular lending for safety nets, the Bank created the Global Food Crisis Response Program to alleviate the impact of the food crisis and established the Rapid Social Response program and the Emergency Window of the Japanese Social Development Fund to address all three crises. Activities funded by these trust funds include direct and indirect transfers, nutrition, and capacity building. The Rapid Social Response program, which helps low-income countries build social protection systems that will protect their people during future crises, provides about $75million for 82 activities projects (44 safety net projects) in 44 countries.

Partners

Partnerships between national governments, donor agencies, the United Nations (UN), non-governmental organizations, and community groups have helped build political will in support of safety nets. This cooperation has helped develop safety net approaches that are appropriate in diverse settings. It has also engaged the international community financially and technically in supporting safety nets.

In addition to ad hoc partnerships with multilateral, bilateral partners, and civil society, the Bank is co-chairing the new initiative for better coordination in social protection. The Social Protection Inter-agency Cooperation (SPIAC) Board was established July 2012 based on the long lasting practice of “show and tell”. The SPIAC-Board is chaired jointly by the International Labour Organization (ILO) and Bank to “improve inter-agency coordination in support of country-led social protection measures, taking into account existing institutional and cross-institutional policy frameworks and coordination arrangements.” Main objectives are: to promote social protection; discuss pragmatic approaches in advancing coherence; enhance coordination and collaboration; promote the exchange of knowledge, policy experience, and good practice, as well as data and information. In addition to the ILO and Bank a further 12 International agencies, 12 bilateral donors (including European Union) and 5 large nongovernmental organizations are registered as members or observers.

The Bank and bilateral partners in the Rapid Social Response Multi-Donor Trust Fund (the Russian Federation, Norway, and the U.K.’s Department for International Development) support capacity building for safety nets and knowledge exchange for low-income countries. At the country level, Bank financing is often part of joint efforts, such as Ethiopia’s Productive Safety Net Program, which receives funding from nine bilateral, multilateral, and UN agencies. There is ongoing collaboration with the ILO and the World Food Program on public employment programs, as well as in joint analytical work to produce and collect data to develop an external joint data platform to share and validate results of a set of indicators measuring the coverage, generosity, and impact of social protection programs (Social Protection Atlas). The Bank’s involvement is often critical to coordinate support in a sector dominated by fragmented donor efforts, particularly in Africa.

Moving Forward

Building in-country capacities and expertise is at the center of the Bank’s work on safety nets.

Strengthening Safety Net Systems: The Bank has a range of financial and technical instruments to help clients design and implement safety net systems. Working with governments, the Bank’s goal is to develop tailored safety nets, combining an appropriate mix of interventions and robust administrative systems. From FY2005-09, almost three-quarters of projects in middle-income countries and more than half of projects in low-income countries included a component to build capacity for delivering programs effectively, including developing systems for targeting, payments, monitoring, evaluation, and beneficiary outreach communications.

Sharing Knowledge: The Bank serves as a knowledge bank for data, research findings, and best practices in design and implementation. Generating and sharing this knowledge through advisory services, training, and ‘How To’ Resources is a priority. From FY05-12, more than 2,000 practitioners received training through programs including the Bank Core Course on Safety Nets and the South-South Learning Forum series. Safety Nets Communities of Practice, peer-to-peer knowledge exchange fora are active in Europe and Central Asia, the Middle East and North Africa, Latin America and the Caribbean, and Africa, connecting practitioners from 30 countries and disseminating best practices.

Promoting Evidence-based Policy: The Bank promotes evidence-based decision-making with investments in research and learning through monitoring and evaluation, country studies, data, and toolkits. Between 2005-11, 119 technical and policy analyses were carried out in relation to safety nets in low-income countries. More than 30 percent of the analyses focused on Africa, helping to generate a knowledge base to underpin future program financing. Studies included poverty assessments, public expenditures reviews, and program evaluations.

Beneficiaries

The Productive Safety Net Project, Ethiopia

Emahoy Belaynesh, who is raising three children and a grandchild, is one of the beneficiaries of the productive safety net project in Ethiopia. With part of the grant she received, she bought seeds of several varieties of fruits and vegetables and planted them in her garden. Among other things, she grows corn, yams, carrots, coffee, oranges, and passion-fruit. She is also involved in beekeeping. “When my husband died I had no source of income and was having a hard time making ends meet,” Belaynesh said. “The safety net program has been a life saver. I now sell my products and earn enough money to put my three children to school, put food on the table and buy anything that we need. I am also able to put some money aside.” – Excerpt from Food Aid Project Helps Millions of Ethiopians Face Drought (Oct 2011)

Safety Net Project, Niger

Despite drought in the Sahel, Dijée Issa, a 30-year-old mother of four, has been able to beat hunger, stay healthy, and keep her children in school thanks to a small monthly cash payment from the government. The program also includes an information element on health and nutrition. Through this program Dijé and others in Chagnassou village in Niger’s Illéla locality have also learned more about health and sanitation, and both the money and the training have been helpful. “The 10,000 CFA francs that we receive has been a great help,” Dijé says, “I pay a man 5,000 francs to bring water for my family, and I use the rest to buy rice, oil, and firewood so that I can feed my children.” The money allows Dijé to take care of her children even during hard times in a part of the world where many are chronically poor and malnourished, and lack basic food security. “When my daughter was born, I made sure to breastfeed her exclusively,” she continues, visibly proud of the plump baby playing on her lap. “So now look at her. Whenever I go out in public, everybody wants to carry her and play with her, because she looks so beautiful and clean and healthy.” – Excerpt from Feature Story “Social Safety Nets on the Rise in Africa, April 2012

Employment Generation Program for the Poorest, Bangladesh

Harimoti Mandal lost her husband earlier this year after a prolonged illness. “It’s only myself and my two daughters,” she explains. “My husband was sick for a long time and needed treatment. I need to repay those loans.” Harimoti was able to get back on her feet and keep her family from the brink of disaster through money earned through the Bangladeshi government’s Employment Generation Program for the Poorest, supported by the World Bank. “I’m working now, and I will do my level best so that my daughters can continue their studies so they can get decent jobs,” says Harimoti, a slight woman in a bright green sari dotted with the clay used to repair the roadway she is working on. She was among 28 laborers—25 of whom are women—earning 175 Bangladeshi Taka, or $2.14 per day, to repair roads running through her community. Two dollars a day wouldn’t buy the average American’s mocha latte at the neighborhood Starbucks. But this wage allows participants to put food on the table and send their children to school. Harimoti’s daily earnings are more than her husband used to earn running a tiny shop in their local village. – Excerpt from Feature Story: Emergency Employment for Bangladesh Poorest (July 27th 2012)