Results from a social protection technical assistance program. July 2011

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Rudolph Powers
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1 Results from a social protection technical assistance program July 2011

2 Political and Development Context Simultaneous transitions Conflict to peace Unitary system to a federal polity Monarchical, hierarchical system to a more equitable one amidst paradoxes Nepal s state institutions did not erode during conflict Delivery of health and education services continued and many human development outcomes improved Growth and poverty reduction continued during conflict and post-conflict years 2

3 Rationale for the Bank s TA Increased attention to social protection since end of conflict in 2006 Social Protection for All as the articulated goal Social Inclusion both a political and a normative construct in the public discourse Transfer programs implicitly seen as compensation for historical wrongs Realization that the conflict was the likely result of a fractured social compact Request to the World Bank to conduct a review of program performance and provide policy advice Partnership with Tribhuvan University CDPS DFID support gratefully acknowledged 3

4 Social Protection for Whom? Range of vulnerabilities life cycle based and group based in addition to regional Culturally rooted systems endorse and perpetuate inequality caste, ethnicity and gender Demographic transition In 2000 the over-60 population was 5.7% of the population. By 2040 it will be 13% Children at risk Hill and mountain areas very difficult to reach 4

5 Intersection of covariate shocks Endemic shocks Nepal faced three major national and local level shocks during 2009 when the survey was carried out Record drought in the preceding winter High international food prices Effects of Kosi Floods from the summer of 2008

6 Data and Sources 1. Administrative data from GoN 2. National surveys and Census 3. Field visits 4. WFP monitoring data 5. Dedicated Household Survey (Nepal Safety Nets Survey) 1680 rural households in 9 districts (84 VDCs) July-Aug 2009 Siraha, Sarlahi, Doti, Mugu, Khotang, Surkhet, Bardiya, Sankhuwasabha, Palpa 6. Combined with Do and Iyer s (2009) data set on deaths from conflict 7. Qualitative data Focus group discussions with community groups Meetings with district level functionaries across nine districts 6

7 Strengths and limitations of the survey Strengths Covers safety net programs access and utilization a first for Nepal Nationally representative of rural areas where the majority of the population resides Voices of beneficiaries and local level government functionaries Limitations Small sample (1680 households) and nine districts Representative only at the (rural) national level Estimates of participation in smaller and geographically concentrated may not be representative - caution in extending conclusions from the data to the whole country and particularly to urban areas No comprehensive consumption or income data (NLSS will address these limitations) 7

9 Shocks and food insecurity in rural Nepal Over half of the survey sample had experienced some shock in the preceding year About two thirds of poor compared to over two fifths of richer households faced a shock Major shocks were drought and weather related, with marriage in the family adding stress as well About 20% of the sample faced days when two square meals were not available and one-third reported facing food shortages at some point in the year Dalits and Janajatis were the most likely have faced food shortages 9 70% 60% 50% 40% 30% 20% 10% 0% Seasonality of Food Insecurity (Less Than 2 Square Meals) by Month Among Households Which Report Food Insecurity Hill Mountain Tarai

10 Rural households also affected by agricultural and weather shocks Over half of the NSNS sample had experienced some shock in the year preceding the survey Agricultural shocks are driven by drought and weather shocks by landslides Shocks are more common for poorer households 66% of poor compared to 44% of richer households faced a shock 10

11 How do households cope with shocks and vulnerability? Nepal: Coping Strategies (Percentage Using a Given Strategy to Cope with Any Type of Shock) Borrow Use savings Help friend/rel 21% 29% 38% Most coping strategies against shocks are informal GoN has several programs to protect against long-term vulnerability Work more Sell/mort assets Reduce consum Govt/NGO help Other Migrate Change crop/use forest Child labor 10% 9% 7% 4% 3% 2% 1% 0% 1. Unconditional cash transfers old age, single women, disability, child grant, ethnic groups, martyrs grant 2. Scholarships 3. Public works food and cash based 4. Smaller programs like subsidized agricultural inputs, maternity benefit, school meal 11

Disability Allowance Adults with disabilities Also special programs for families of martyrs and

13 Nepal: Social Protection Across the Life Cycle Child Grant Single Women s Allowance Old Age Allowance Elderly Young Children School going children Scholarships & Food for Education Disability Allowance Adults with disabilities Also special programs for families of martyrs and conflict affected Working age adults Pregnant women Public Works/ Civil Service Pensions Maternity benefit

14 3.00 Social Assistance as % of GDP in Select South Asian Countries Source: World Bank Staff estimates based on annual budgets Note: Bangladesh and Sri Lanka intrapolated for ; includes social pensions Nepal: Dramatic increase in spending after the Peace Agreement in Bangladesh India Nepal Pakistan (PRSP-2) Sri Lanka

15 Composition of social protection programs has also changed since the Peace Agreement Nepal: Social Protection Spending , % GDP 2.5% 2.0% 1.5% Social assistance has overtaken civil service pensions as the largest contributor to social protection 0.0% 0.2% 0.0% 0.2% 0.7% 1.0% 1.0% 0.0% 0.2% 0.0% 0.2% 0.2% 0.5% 0.2% 0.5% 0.7% 1.0% 0.9% 0.0% Actual 2006/07 Actual 2007/08 Est. 2008/09 Budget 2009/10 Civil Service Pensions Social Safety Nets and Social Pensions Education Transfers Other inluding labor market 15

16 How did this increase take place? Mainly through expansion of cash transfer programs Changes in size of benefits criteria for target populations. new programs for some groups including the conflict affected Nepal: Dramatic Increase in Beneficiaries of Cash Transfer Programs Source: World Bank Staff Calculations from MoLD (GON) data Elderly Single Women People with Disabilities All three Programs 16

17 Coverage is high compared to other countries but geographically concentrated 26% households participate in at least one safety net program and overall they are quite propoor and progressive (caste) Some areas (e.g., Karnali) have much higher coverage Almost three fourths say they receive benefits from only one program Awareness about programs varies substantially Most programs geographically concentrated and areas with higher conflict deaths have higher coverage Figure 2: Housheold coverage by any safety net program by wealth quintile 42% 29% 21% 20% 18% 1st quintile 2nd quintile 3rd quintile 4th quintile 5th quintile 17

18 The largest cash transfer programs are universal with good coverage The old age allowance and single women s (earlier Widows Allowance) allowance together cover nearly 2/3 of eligible individuals Caste: Dalits have lower coverage rates Gender: Good coverage of women - 74 % of women eligible for either of the allowances are covered Wealth neutral: Individuals from poorest households as likely to be covered as those from wealthier households High level of beneficiary satisfaction 18

19 Scholarship programs are geographically concentrated but where they exist, are very pro-poor Dalit scholarship Covers 36 percent of eligible Dalit schoolchildren in the sample 86 percent of benefits go to children from households in the bottom two wealth quintiles 50% Girl s scholarship program Covers only 11 percent of eligible primary school girls 83 percent of benefits go to girls in the poorest half of households Janajatis and Brahmins/Chhetris receive the bulk of resources 19

20 Public Works Programs (PWP) are geographically concentrated but reach the poorest Limited geographically, but high coverage where they do exist Almost all participants are from poorest households, largely because PWP are implemented in poor areas Provide too few days of work to stem seasonal migration Most households prefer wages in kind PWP seen as enhancing food security 100% Beneficiary Preferences for Food or In-kind Payment in PWP 80% 60% 40% 20% 0% Bangladesh Nepal Both In kind Cash

21 Other programs have mixed performance School meals programs cover 11 districts but where they exist cover 53 percent of schoolchildren, 88 percent in the bottom wealth quintile Safe delivery program primarily benefits wealthier households, who are more likely to deliver in hospitals Subsidized seeds and fertilizer programs have very low coverage and disproportionately benefit Brahmin/Chhettri households

22 Implementation challenges: Financial Even in programs that are universal in theory there is targeting by default Explicit and implicit rationing of beneficiaries leaves programs open to discretion Implicit rationing through low availability and flow of resources both financial and human Explicit through geographical concentration and ceilings on beneficiary numbers rationing If all eligible beneficiaries of the senior citizens, single women's, endangered ethnic groups, disability and pilot child protection grant in Karnali received their allowances it would cost 0.8% of GDP If all families of children 0-4 years were given the child allowance that alone would be 1.6% of GDP 22

23 Implementation challenges: Administrative Even when adequate resources are allocated they often cannot be spent: 1. Strict documentation requirements for verification 2. Differential eligibility criteria for vulnerable groups 3. Multiple programs with the same objective (eg: more than eight scholarships, disability) creates administrative load 4. Lack of staff on the ground and no elected VDC 5. Manual payment systems increase transactions, and are prone to corruption with late and irregular payments 6. Manual record keeping and highly fragmented data 23

24 Implementation issues in summary The good news: Sound choice of geographical and categorical targeting performing well Recent initiatives in the right direction (eg: social protection framework) And the continuing challenges: Weak coordination between ministries, agencies and even sections within ministries Weak monitoring on the ground Insufficient staff and resources Inadequate data and information systems 24

25 Some questions for consideration Is this fiscally sustainable? Is it administratively sustainable? Is it possible or useful to have greater program convergence and consolidation? How can systems of delivery of programs be strengthened: eg: ICT and formal financial systems for payments, electronic beneficiary lists. Can expenditures at all levels be better tracked? Can downward accountability to citizens be strengthened? Partnerships Building consensus within government and outside Partnerships with the non-government sector. Donors need to be better coordinated and accountable 25

Social Protection and Jobs in Nepal. Jasmine Rajbhandary Senior Social Protection Specialist World Bank September 5, 2018

Social Protection and Jobs in Nepal Jasmine Rajbhandary Senior Social Protection Specialist World Bank September 5, 2018 Outline 1. Framework and context 2. Status in Nepal 3. Policy priorities linked