What effect do social safety nets have on poverty – on food security, trade, gender, and social relations? A recent Institute of Development Studies report suggests that the impact is far more wide-ranging and profound than previously thought. Even tiny transfers make a significant difference to the livelihoods of the very poor.

This IDS report examines the design and impacts of cash transfer programmes in three southern African countries. Design choices such as targeting, transfer levels and transfer mode (cash or food) require sensitive handling by policymakers and participation by intended beneficiaries. Through empirical analysis of cash transfer programmes in Mozambique (an urban social security scheme), Namibia (social pensions for the elderly), and Zambia (rural cash-for-work projects) the study examines the effectiveness of social safety nets in Africa.

Key findings around safety net design focus on targeting dilemmas. Although social safety nets are primarily intended to provide immediate consumption support, they can also achieve sustainable economic impacts (poverty reduction). Their social impacts, however, are more variable and ambiguous.

Although concerns about safety net programmes remain, this study reaches broadly positive conclusions and offers constructive recommendations for policymakers. Research findings include:

• Moving away from universal or broadly targeted programmes (such as food subsidies) towards narrowly targeted safety nets might reduce leakages (inclusion of non-poor beneficiaries) but invariably increases exclusion errors.
• Reducing targeting errors (by means testing applicants and installing monitoring systems) involves trading off targeting accuracy against rising administrative costs, and reduces programme funds available for transferring to beneficiaries.
• Even small transfers aimed at enhancing food consumption often have positive impacts on productivity and incomes - many beneficiaries invest cash transfers in farming or micro-enterprises, increasing food production and profits.
• Cash transfers have significant multiplier effects, reaching many more indirect and secondary beneficiaries than the recipients themselves.
• Targeted transfer programmes can undermine social relations at the community level, unless sensitively designed. Resentment against programme beneficiaries can be minimised if communities participate fully in design and implementation.
• Gender impacts are determined by the sociocultural context as much as by the safety net intervention itself, for example, targeting women can be counterproductive if the work requirement on public works over-burdens women who are already undernourished and ‘time-poor’.

Policy recommendations include:

• Increasingly, safety net programme beneficiaries are expressing a preference for cash rather than food transfers – a preference that should be respected wherever government or donor resources and market conditions permit.
• Since higher value transfers are associated with higher propensities to invest, programme designers must choose between maximising coverage - smaller transfers to more beneficiaries - and maximising poverty reduction impact - higher transfers to fewer beneficiaries.
• A preliminary ‘sociocultural assessment’ is essential to estimate the collateral effects on social relations and gender outcomes before implementation of any safety net programme that has social as well as economic objectives.
• Safety net affordability is a normative and political judgement: fiscal sustainability is a function of political will rather than budgetary constraints.

Source(s):
‘Social Safety Nets for Poverty Alleviation in Southern Africa’, ESCOR Research Report R7017, London: Department for International Development, by Stephen Devereux, June 2000
‘Targeting Transfers: Innovative solutions to familiar problems’, IDS Bulletin 30(2), Institute of Development Studies, Brighton by Stephen Devereux, April 1999
‘Conceptualising anti-poverty programmes and targeting women in sub-Saharan Africa’, paper presented at the IDS conference, ‘What can be done about poverty?’, Institute of Development Studies, Brighton by Stephen Devereux, June 1998

Funded by: DFID (Escor) 1997-1999

id21 Research Highlight: 9 March 2001

Further Information:
Stephen Devereux
Institute of Development Studies
University of Sussex
Brighton, BN1 9RJ
UK

Tel: +44 (0) 1273 606 261
Fax: +44 (0) 1273 621 202/691 647
Contact the contributor: S.Devereux@ids.ac.uk

Institute of Development Studies (IDS), UK

Other related links:
See ID21's recent summary 'Making less last longer' also by Stephen Devereux

FAO reports on issues relating to food insecurity

HungerWeb has focused information on the sharpest end of poverty

Search MOST for further research on Poverty and Social Exclusion

View the World Bank Poverty Reduction Strategy Papers

UNDP work towards the elimination of poverty

World Development Report 2000/2001: Attacking Poverty