ToR # 9

1. ToR# 9 IMPROVING THE TARGETING EFFECTIVENESS OF SOCIAL SAFETY NETS IN BANGLADESH Principal Investigator AbulBarkat Co-Investigators MatiurRahman, Abdullah Al Hussain, SubhashKumar Sen Gupta, & Faisal Mohammad Ahamed ManobSaktiUnnayanKendro (MSUK) House 05, Road 08, Mohammadia Housing Society, Mohammadpur, Dhaka 1207 Presented at Workshop on Research to Inform Food and Nutrition Security Policies RuposhiBangla Hotel Dhaka : November 28, 2012

2. Background and Objectives • Every 3rd household (31.5%; HIES 2010) live in poverty • Social safety net programmes (SSNP) have been mainstay of poverty alleviation strategy since independence • Currently, 24.6% HHs (Rural 30.1% & Urban 9.4%) receive SSNP benefit (HIES 2010), which was 13% in 2005 • In FY 2012-13, Tk. 227.5 billion allocated under Social Protection & Empowerment (11.87% of the budget & equivalent to 2.18% of the GDP) (Social protection 75%; empowerment 25%) • Large amount of money spent on SSNP; number of beneficiaries increasing • Often questioned – whether most eligible persons receive SSNPs? • TARGETING ERROR (both inclusion and exclusion) is thought to be a serious drawback to reach the food insecure and the poor, in addition to capacity constraints (e.g., constrained budget)

3. Background and Objectives … contd.. • Recent studies identified 4 potential sources of targeting errors: • Mismatch of geographical allocations of resources & poverty rates • Use of improper targetting indicators • Even if design of SSN targeting mechanism is sound, political economy & implementation issues at local level overrides it • Institutional issues at central level foster overlaps and gaps in coverage Such targeting errors reduce the resources available to support poorest & most food insecure households. Therefore, objective of Government’s spending on SSNPs not fulfilled effectively.

4. Background and Objectives … contd.. • This research is expected to: • Provide a comprehensive review of SSNP targeting mechanism & errors that will enable GoBto improve targeting so that it better reaches the food insecure and the poor • Contribute to achieve major national goals of National Food Policy (2006) & National Food Policy Plan of Action (2008-2015) • Objectives: • To map the major sources of targeting errors in social safety nets & assess their relative contribution • To recommend ways to decrease inclusion & exclusion errors at the programme-level based on experiences in Bangladesh and in South Asia regions • To identify potential ways forward for building a SSN system in Bangladesh

5. Methodology and Data Sources As per ToR, Household Income and Expenditure Survey (HIES) was the major data source to investigate into targeting performance (inclusion and exclusion errors) of public SSNPs in general and by individual programmes in particular. • The methodology was designed assigning special emphasis on analysis of relevant HIES data. • Preliminary investigation revealed that out of 30 public SSNPs included in HIES 2010, more than 20 programmes have <100 samples (very negligible compared to their countrywide beneficiaries). • (E.g., only 4 beneficiary HHs of Maternity Allowance programme included in HIES whose national beneficiary is 88,000.) • To avoid representation problem, study methodology was redesigned in consultation with TAT members & other experts at FAO/NFPCSP.

6. Methodology and Data Sources …contd… • From HIES 2010 data:Analysis made aggregating all beneficiary HHs of all 30 programmes (the term is “public safety net beneficiaries”) together & then for each of the 8 programmes with more than 100 sample HHs. • Recent studies conducted by other organizations/individuals: For the remaining programmes, we reviewed recent studies conducted by other organizations/individuals & used their findings. • Consultation with experts:For the purpose of drawing inferences on the remaining programmes, we consulted experts who have conducted research on safety net targeting or worked in relevant sectors. • Primary data collection:Even after the above three exercises, inferences on some programmes will not be possible. For those programmes a survey will be conducted to obtain primary data from the beneficiary and eligible non-beneficiary HHs.

7. Major Findings based on Secondary Analysis of HIES 2010

8. The HIES 2010 and SSNP in Bangladesh The HIES (2010) includes (Section 1 Part C) 30 social safety net programmes. The respondent households (n=12,240) were asked 7 questions on safety net programmes. The questions covered: • Whether the household (any member of the household) has been included in any SSNP in the preceding 12 months • If “Yes”, which programme(s) • When s/he was included in the programme (month and year) • What benefit s/he is entitled to receive from the programme • What benefit (cash/kind) s/he has received • How much money s/he had to spend to be included in the programme • If “not included”, what was the reason for exclusion (both genuine and defects) • Other parts of HIES questionnaire include demographic & socioeconomic information of household and members. The broad variables/indicators are:

9. The HIES 2010 and SSNP in Bangladesh • 55% of the SSNP budget spent on programmeslisted in HIES 2010; • Pension constitute 20% of SSNP budget (Is ‘Pension’ SSNP?) • Considering the 30 programmes listed in the HIES is a perfect sample for generalizations about overall public safety net sector

10. SSNP Beneficiary Targeting SSNP Targeting of Beneficiary Inclusion Criteria Exclusion Criteria Essential Criteria Priority Criteria The first research issue is identification of targeting errors which can be grouped as inclusion error—meaning inclusion of non-eligible & exclusion error—meaning exclusion of eligible persons We have compiled all the eligibility (inclusion & exclusion) criteria for most of the selected public SSNPs from relevant documents of the respective programmes. Poverty—the most essential targeting criteria ‘Poverty’/’extreme poverty’/’poor household’ is an essential criterion for all the SSNPs along with other criteria such as low income, landlessness, disability, gender, old age, maternity & other vulnerability etc.

11. Household demography and receipt of SSNP benefits • Nationally, households with 7-8 and 5-6 members are ahead of other household sizes in terms of receipt of SSNP benefit. Respectively 29% and 28% of beneficiary households are of these sizes. • In rural areas, every 3rd beneficiary household consists of 1-2 members. • Nationally, 86% households are male headed & 14% female headed. Of SSNP beneficiary households, 85% male headed and 15% female headed. • A 30% household receive SSNP benefit where household head is more than 60 years old.

12. SSNP Beneficiary HHs and land ownership status • Landlessness or HHs with less than 15 decimal of land is an essential/priority criterion for SSNPs such as Old Age Allowance, Widow Allowance, Disability Allowance, VGD, VGF, Maternal Voucher Scheme, Employment Generation for Extreme Poor (former 100 Days EGP) etc

13. Poverty, SSNP beneficiaries and literacy status • Literacy status of beneficiaries of individual programmes(% literate): • Old age Allowance (13. 6) • Widowed Allowance (13.9) • Housing Support (20) • Test Relief (25) • Allowance for Insolvent Disabled (28.1) VGF (28.5) • Cash for Work (29.4) • VGD (30) • Gratuitous Relief (36.4) • Open market sales (37.5) • Agriculture Rehabilitation (44.1),

14. Housing, sanitation, electricity and availability of cell phone • 21% have muddy wall and another 26% have walls made of hemp, hay, bamboo. • 4% have roof made of mud, tally and wood while only 3% have concrete made roof. • Very negligible number of beneficiary households of the programmes designed for the ultra poor or other vulnerable groups (e.g., old age allowance, widow allowance, disability allowance, VGD, VGF, GR, TR, FFW etc) have walls or roofs made of brick/cement. • Only 11% beneficiary households have sanitary latrines. • 39% beneficiary households have electricity connections at their residences. Nationally, 55% HHs have electricity connections (rural 42.5%, urban 90% • Regardless of programmes, more than half (51.1%) beneficiary households own cell phone. Nationally, 64% households have cell phone. • No data is available for individuals in the HIES.

15. Poverty, Income, Expenditure and Social Safety Net

16. Poverty HCR and SSNP benefit flow Regional disparity (improper allocation of resources) !!! • Highest % of HHs (37.3%) received benefit from SSNPs in Khulna division. On the basis of poverty HCR, Khulna division ranks fourth • Poverty HCR is highest in Rangpur division (HCR 46.2% and 30.1% using the Upper and the Lower poverty lines respectively), on the basis of SNP beneficiaries, it ranks 3rd position with 33.7% beneficiary HHs

17. % distribution of beneficiary and non-beneficiary HHs by income deciles and residence (rural-urban)

18. % distribution of beneficiary HH of major SSNPs by income deciles

19. Are the HHs getting SSNP poor? • SSNPs are meant for the poor. In Bangladesh, 24.6% HHs receive SSNP (where the poverty rate is 31.5%) • Given an ideal situation (i.e., safety net is for the poor), the above figures seem satisfactory. However, the situation is not as ideal as the figures appear. The reality is as below: SSNP beneficiary HHs below Poverty Lines (HIES, 2010)

20. SSNP beneficiary households below Poverty Lines in the CBN Method (by division and rural urban)

21. % distribution of SSNP beneficiary HHs (8 major SSNPs) by CBN poverty status, HIES 2010

22. Poverty and receipt of SSNP benefit

23. Are these non-poor households borderline poor? (Tk.)

24. Are these non-poor households borderline poor? Per capita expenditure of poor HHs and SSN beneficiary HHs

25. Poverty status of SSNP beneficiaries with and without SSNP benefit amount • Over 60% beneficiaries received ≤ Tk.100 from their respective SSNP in a month;33% received between Tk.100 and Tk.300, and only 4% received between Tk. 301 and Tk.500. What happens if the amount is deducted from the HH income? If SSNP benefit is deducted from the income of the beneficiary households, poverty rate increases by only 2 percentage points

26. Poverty Status of beneficiary household (without the benefit amount) by shifted Upper poverty line

27. % of Benefit Received by Beneficiary Households

28. % of food expenditure in consumption expenditure • 79% of all households spend more than half of their consumption expenditure in food. • Rate is highest (92.2%) in lowest income decile. • Rate is lowest (44.7%) in top income decile. • Distribution by consumption expenditure deciles provide similar result.

29. % of food expenditure in consumption expenditure by different type of Household

30. Targeting errors in certain SSNPs using programme specific eligibility criteria (HIES 2010)

31. Targeting errors in certain SSNPs using programme specific eligibility criteria (HIES 2010)

32. On leakage and targeting error in SSNP in the Sixth Five Year Plan The Sixth Five Year Plan of the country states coverage issues, targeting beneficiaries, leakages, and disparity in regional distribution etc as the key challenges of implementing SSNPs are. Some of the highlights are as follows: • While coverage is relatively low, a significant number of HHs gain access to multiple SSNPs. A quarter of HHs were receiving transfers from more than one SSNP. • Over 11% households were participating in at least two of the three programs – VGD, FFE and FFW. Coverage in urban areas remains low. • 27% VGD beneficiaries are not poor. • 11% participants of PESP meet none of the eligibility criteria; almost none of the beneficiaries meet at least three criteria. Almost 47% PESP beneficiaries are non-poor and incorrectly included in program. • All HHs within less-poor Upazila are denied assistance, including those with very high food insecurity.

33. On leakage and targeting error in SSNP in the Sixth Five Year Plan…..contd. • Leakage in FFW program is 26%. • Leakage in female stipend programs 10%-12%. • About 20%-40% budgetary allocations for female secondary stipend program do not reach beneficiaries. • Leakages show a strong correlation with number of intermediaries in the transfer process. • HIES 2005 showed regional disparity in distribution of households receiving social protection benefits. Barisal and Rajshahi divisions, with the highest incidence of poverty, did not have the correspondingly higher number of social protection beneficiaries. In contrast, Sylhet Division, with the second lowest poverty incidence had the highest proportion of social protection recipients.

34. Concluding observations • Coverage & budgetary allocation in SSNP sector – increasing every year • Every 4th HH is covered by SSNP (HIES 2010) • The declining trend of poverty over the years at a rate of 1.7% justifies Government’s spending on SSNP. • No concrete evidence that government’s spending on SSNP is being received by the poor and hence poverty is declining. • Large number of beneficiary HHs of major SSNPs are not poor at least in terms of official measures of poverty. • However, it is also not true that the benefits are being captured by the elites since most beneficiaries are from the lower income deciles. • False prioritization (high inclusion error) exists.

35. Concluding observations • The number of targeting criteria for the existing SSNPs are huge.Some are obsolete and sometimes impractical. (e.g., annual income <Tk.3,000 for Old Age Allowance is quite absurd). Such criteria should be revisited. • The term ‘insolvent’ is used as an eligibility criterion for many SSNPs. However, it is not properly defined in any of the document. A working definition for this term is necessary. • The term ‘poverty’ is used for most SSNP as an eligibility criterion. However, government's definition of poverty does not seem to match with that of implementation authority. `poverty’ criterion should be administrable.

36. We welcome your valuable comments and suggestions for the improvement of the study Thank You

37. Backup Slides

38. HIES (2010) and SSNP

39. HIES (2010) and SSNP

40. Status of poor HHS getting SSNP benefit (HIES 2010)

41. Performance assessment using programme specific variables Targeting Efficiency of Old Age Allowance

42. Performance assessment using programme specific variables Targeting Efficiency of Widow Allowance

43. Performance assessment using programme specific variables • Targeting Efficiency of Targeting Efficiency of General Relief Activities

44. Performance assessment using programme specific variables • Targeting Efficiency of Vulnerable Group Feeding (VGF)

45. Performance assessment using programme specific variables • Targeting Efficiency of Gratuitous Relief-Non-cash

46. Performance assessment using programme specific variables • Targeting Efficiency of Stipend for Secondary and Higher Secondary/ Female Student

47. Poverty and SSNP beneficiary HHs (except 2 stipend) Percentage distribution of the SSNP beneficiary HHs (except 2 stipend programmes) by poverty status in the CBN method, HIES 2010

48. Reported reasons for exclusion Distribution of the reported reasons for not being included in major Public SSNPs

49. Multiple beneficiary recipient • Status of multiple beneficiary recipient Households in HIES 2010

50. Key Research questions by Broad Scopes The 12 month long research project will make efforts to answer the following research questions at the end of the study: