Policy Evaluation and Inclusion

1. Policy Evaluation and Inclusion • Javier Escobal

2. Income Distribution Dynamics and Policy Response polarization in the sense of changes in horizontal inequalities / segregations Uni-dimensional versus multidimensional nature of inequality Exclusion How to provide a useful and practical measure of inequality and of exclusion for policy purposes: From Gini coefficient to measuring gaps Peruvian experience: Ministry of Development and Inclusion Increasing presence of Evaluation Political economy of evaluation Strengthening local research capabilities and improving the way research links to policy Outline

3. After more than two decades of continuous growth Gini coefficient is going down. This reduction contrast with the generalized impression that inequality is rising If we presume that the income (expenditure) distribution follows a log-normal distribution. Results are similar if we replace the assumption of log-normality with alternatives: Singh-Maddala or Dagum (heavy tail) At the aggregate level there is no evidence of an increasing Gini. However, this does not mean that inequality might not be rising in particular dimensions (urban/rural, education, ethnicity.) In particular in a related paper (Escobal & Ponce, 2013) we have shown increases in polarization at the spatial level... Specially when we look at medium term (since the early 80s) Income Distribution Dynamics and Policy Response

4. Ministry of Development and Inclusion: Population in the process of inclusion Rurality Level of Education Poverty Ethnicity Female headed households Closing Gaps Not only improving averages A Ministry leading its peers ¿Carrot and stick policy? Funds Reducing transaction costs to promote interaction Accountability as a self-enforcing mechanism From Gini coefficient to measuring gaps

5. Targeting: population historically excluded Coordination Monitoring & Evaluation The Economic Inclusion National Fund (FONIE) Coordinating Infrastructure Combo Challenges Institutionalization SectoralCoordination Territorial Coordination Constructing a Learning System Key elements to have a workable policy aimed at reduce inequality

6. Increasing presence of Evaluation / Political economy of evaluation • RCT as a learning instrument. • For pilots... As in Ana Dammert paper • Clever ways of constructing a reasonable counterfactual as in CristopherKsoll paper • At the same time the risk of doing research in a relatively unimportant topic just because there is a higher chance that a reasonable counterfactual be found... "There is nothing less random than randomized control trials" • Difficult counterfactuals: mining example Fernando Aragon • Robustness • Impact heterogeneity and sample size

7. RCTs • Finding somebody that can be the champion of lotteries • RCT: pilots versus regular projects • RCT: internal validity vs. external validity • Advocates of RCT recognize that internal validity does not say much about external validity but I have the feeling this gap is much more important than it tends to be recognized.

8. Strengthening local research capabilities and improving the way research links to policy • Increasing data usage • Young Lives, An international Study on Childhood Poverty • Data availability: public domain • Building a Data Repository for "old" research projects • Example: going back to the same Andean communities studied by Adolfo Figueroa in the early eighties • Strengthening local research capabilities and improving the way research links to policy • Canada, TTI

9. Thanks!