Urban Poverty and Local Governance: Institutional and Financial Implications for Social Safety Nets

Transcription

1 Urban Poverty and Local Governance: Institutional and Financial Implications for Social Safety Nets The Architecture for Urban Safety Nets: Institutional and Financing Models Yasuhiko Matsuda, Sr. Public Sector Specialist, Social Protection & Labor Global Practice Kathy Lindert, Global Lead, Social Protection & Labor Delivery Systems Global Solutions Group World Bank

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3 INSTITUTIONAL REQUIREMENTS AND OPTIONS FOR ADDRESSING URBAN POVERTY 11 November 2015

4 Urban poverty requires specific institutional responses Urban poverty is dynamic and the urban poor move in/out of locality and/or into/out of poverty Need to be able to track these movements and make benefits portable -> require inter-jurisdictional coordination The poor are often concentrated in slums, sometimes straddling municipal jurisdictions Possible mismatch of needs and resource endowments for individual local government -> poorer localities tend to be poorly resourced municipalities too Better-resourced localities can be burdened from spillover typical in health Urban poor face multiple challenges of poverty Higher cost of living; exposure to crime & violence; multiple (precarious) employment, etc. Need for better inter-sectoral/inter-program coordination Social capital/community ties tend to be weaker in urban space Influx of migrants vs. NGOs, private philanthropies Less reliance on community-based arrangements but taking advantage of greater opportunities for institutional partnerships?

5 Effective SSN service delivery requires efficient intergovernmental relations 11 November 2015

6 Different levels of government have their own advantages and disadvantages Central government typically leads in policy-setting and financing SSN is often not a high priority for subnational governments (vs. health, education) Local governments are often called on to fulfill specific functions (e.g., outreach, beneficiary identification, enrollment) because of their comparative advantages Detailed knowledge of local realities Ground presence for face-to-face contacts Relative ease of spatial/inter-sectoral coordination But vertical coordination can be complicated Lack of clarity in assigned roles and responsibilities Mismatch in roles and resources Absence of common information for beneficiary identification Political discord And local government capacities vary significantly Across countries (Brazil vs. Philippines vs. Pakistan) Within countries (large capital cities vs. small towns) 11 November 2015

7 Dark Colors = National Gov t % of GDP Light Colors = Sub-National Gov t Public Expenditure & Revenue by Level of Government 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% EXP REV EXP REV EXP REV EXP REV EXP REV EXP REV EXP REV EXP REV EXP REV CAN US BRA ARG AUS IND SA MEX PAK Consolidated 40.0% 31.4% 39.4% 30.8% 38.9% 35.3% 33.9% 30.2% 33.9% 27.3% 27.2% 20.3% 26.6% 27.0% 24.7% 19.6% 19.8% 13.2% Sub-National 24.9% 15.3% 18.6% 9.1% 11.5% 10.6% 17.9% 5.9% 15.9% 5.1% 13.2% 5.2% 14.1% 0.4% 10.8% 0.8% 6.6% 1.0% National 15.1% 16.1% 20.8% 21.7% 27.4% 24.7% 16.0% 24.3% 18.0% 22.2% 14.0% 15.1% 12.5% 26.6% 13.9% 18.8% 13.2% 12.2% Source: International Monetary Fund World Economic Outlook; OECD Fiscal Decentralization Database. All data from 2012/13 except Canada (2009) and Brazil (2011)

8 UNITED STATES Sub-National Expenditure by Function INDIA Other and Unallocable Interest on 8% eneral Debt 2% Police 1% Government Administration 3% Health 3% Hospitals 4% Highways 6% Insurance Trust 15% AUSTRALIA Education 30% Public Welfare (Income Security) 25% Transport & Communication s 5% Social security & welfare 5% Medical, public health, sanitation & water supply 6% Administrative services 7% Education, 18% Agriculture 8% Interest Payments 10% SOUTH AFRICA* Pension & Retirement Benefits 9% Power, Irrigation & Flood Control 9% Public debt 3% Interest on superannuation 1% Health 27% Agriculture & Environment 7% Social Development 2% Education 37% Education 25% Human Settlements 9% General public services 3% Housing & community amenities 5% Social security & welfare 7% Public order 10% Transport & communications 11% Housing & Community Amenities 4% Transport 8% Health 29% *data from KwaZulu-Natal Province

9 % of GDP % of GDP % of GDP Social Protection Expenditure per Level of Government 12.0% 10.0% CANADA (FY 2009) These 3 countries with significant decentralization depict very different Social Protection Systems: 8.0% 6.0% 4.0% 2.0% 0.0% Social Assistance Social Insurance CAN Sub-national 1.8% 1.1% CAN National 4.4% 3.1% - Both in Brazil and Canada, subnational roles in SP are much smaller than the federal roles. - In South Africa the national government fully centralized social assistance functions in 2004 (and also created a single payment agency). 12.0% BRAZIL (FY 2012) SOUTH AFRICA (FY 2013) 12.0% 10.0% 10.0% 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% Social Assistance Social Insurance BRA Sub-national 0.4% 2.5% BRA National 1.3% 9.1% 0.0% Social Assistance Social Insurance SA Sub-national No data available / Negligible SA National 4.8% 0.9%

10 Fiscal arrangements can create unbalance in roles vs. resources 50% Mismatch in revenue vs. expenditure assignments in the Philippines 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Provinces Cities Municipalities Barangays % IRA Share % Share of Devolved Functions post-lgc 11 November 2015

11 Philippine Pesos Divergent fiscal capacities create uneven playing fields for public interventions, including for SSN 700 Available resources per capita across selected local government units in the Philippines Visayas Luzon Visayas Luzon Visayas B Luzon PROVINCES CITIES MUNICIPALITIES #REF! IRA & Other Transfers Own-source Revenues - Tax revenues - Non-tax revenues 11 November 2015

12 Germany: Unemployment Benefit II Mexico: Pensions for Older People Pakistan: Benazir Income Support Programme South Africa: Social Grants USA: Social Security Centralized Centralized Admin with partial delegation Brazil: Bolsa Familia Mexico: Oportunidades/Prospera USA: Temporary Assistance for Needy Families USA: Medicaid Australia & USA: Unemployment Insurance Australia & USA: Workers Compensation Decentralized Admin with national oversight Decentralized Mexico, Nuevo Leon State: Direct Support for Older People Program Mexico: Popular Health Insurance Brazil, Bahia State: Better Life (Vida Melhor)

13 This session will explore some of these institutional issues in: City of Belo Horizonte, Brazil Where the municipal government has introduced a series of institutional and management innovations ranging from participatory planning, territorially focused inter-sectoral coordination, and results-based management City of Surakarta (Solo), Indonesia Where the city government has adopted a combination of participatory planning and its own poverty targeting method to complement national SSN programs Nigeria Where the federal government is gearing up to the challenge of streamlining inter-governmental coordination in SP&L service delivery 11 November 2015

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