47291 Safety Nets Primer The World Bank January 2009 Number 29 Social Safety Nets in World Bank Lending and Analytical Work: FY2002­20071 D uring FY 2002­2007 the World Bank en- of safety net activities reflects the dominance of gaged with 118 countries on social safety Latin America, with emerging activities in the net (SSN) issues, providing lending in African and South Asian context. 68, analytic products in 86, training in 87, and a combined package of all three services in 42. Overall Portfolio A review of these safety net activities shows a strong diversity with respect to the regions, types During FY2002­07 safety nets appear in 145 of intervention, sectors and financing instru- projects (see Table 1). The total value of these ments. This reflects evolving thought within the projects is US$13.4 billion, of which 25 per- Bank with respect to the role of safety nets in cent are dedicated to Safety Net activities. broad development strategies, not just immedi- The safety net portfolio is US$ 3.4 billion (see ate or temporary programs. Table 2). Nine percent of all World Bank proj- The findings of the portfolio review take into ects include safety nets, though these are usu- account all project and analytic documents ally a small share of the overall loan. The safety where a thematic code of "social safety nets" net portfolio accounts for 2.6 % of total World was assigned2. The analysis shows a noticeable Bank lending. variability over time, particularly as the portfo- lio expanded when large or multiple countries faced economic crises. The regional distribution 1 Colin Andrews prepared this note based on Mi- lazzo and Grosh (2008). Social Safety Nets in World Table 1. Number of projects with Safety Bank Lending and Analytical Work: FY2002­2007. Net components, by region and fiscal Social Protection Discussion Paper No. 0810. year, FY02­07 2 Since December 2001, project task team leaders have assigned thematic codes to projects. Thematic Region FY02 FY03 FY04 FY05 FY06 FY07 Total Code 54 "Social Safety Nets" is meant to capture AFR 2 11 3 9 1 7 33 safety net activities. The guidance note for coding defines Thematic Code 54 as "Activities intended to EAP 0 1 0 4 1 1 7 provide social assistance (i.e., in-kind or cash assis- ECA 8 5 5 4 5 3 30 tance to poor and vulnerable individuals or families, LCR 3 10 8 7 9 6 43 including those to help cope with consequences of economic or other shocks). It includes: benefits in- MNA 2 2 3 1 0 5 13 cash to vulnerable groups; benefits in-kind to vulner- SAR 1 1 0 4 6 7 19 able groups; subsidies for goods to vulnerable groups; subsidies for services to vulnerable groups; workfare Total 16 30 19 29 22 29 145 programs; other risk coping activities." Table 2. Lending Commitments for Safety Figure 1. SSN Portfolio, FY 02­07 (US$ m) Nets, by region and fiscal year (in US$ million), FY02­07 1200 Region FY02 FY03 FY04 FY05 FY06 FY07 Total 1000 AFR 58.9 123.3 39.7 112.4 5.5 93.3 433.2 800 M EAP 0.0 55.0 0.0 61.6 64.0 8.0 188.6 600 US$ 400 ECA 136.4 91.9 24.8 88.6 102.3 10.1 454.0 200 LCR 63.0 857.5 311.1 176.6 207.9 120.9 1736.9 0 MNA 4.4 6.8 17.0 24.0 0.0 18.8 70.9 FY02 FY03 FY04 FY05 FY06 FY07 SAR 30.2 39.2 0.0 96.5 158.5 192.7 517.0 Total SSN New Lending Commitments (Theme 54) Total 293.0 1173.7 392.5 559.6 538.2 443.7 3400.7 nets has unambiguously increased is Country Limited comparisons with a previous in- Assistance Strategies (CAS). ventory (done without the aid of the current coding scheme) show a larger number of loans Distribution of Activities by Region and in every year since FY98, the year before the Income Level social risk management framework that under- lies the Social Protection strategy was written. The safety nets portfolio is dominated by LCR There is noticeable variability in size as the both by number of projects and dollar volume. portfolio expands when large or multiple coun- By number of projects, LCR, AFR and ECA are tries face economic crises. Figure 1 reflects the all active, with the other regions much less so. impact of high dollar value loans, for example, LCR claims the highest share of lending of the large loads to Argentina's Jefes de Hogar pro- SN portfolio, and by a wide margin (51 percent), gram in FY03. followed by SAR, ECA, AFR and EAP. The Similar trends emerge with respect to SSN regional pattern of analytic work is somewhat analytic products, with growing analysis during similar to that for lending. ECA carries a heavier FY 03­07 when approximately 315 products weight in analytic work than in lending. were generated. Two factors may account for this It is interesting to note that the number of including the timing of financial crises, as well projects split between IDA (61 projects, $667 as the release of the Social Protection strategy million) and IBRD (51 projects, $2.1 billion) in 2001. An area where the treatment of safety is about he same as for the overall Bank port- Figure 2. Projects Involving SSNs, by Region (share of a total of 145 projects, and a SSN portfolio of US$ 3.4 billion), FY02­07. a. Number of projects b. Amount of allocation (US$ million) SAR MNA AFR EAP (19 projects) (13 projects) ($433) ($189) 13% 9% 13% 6% EAP MNA ECA (7 projects) ECA ($71) (30 projects) 5% ($454) 2% 21% 13% AFR LCR SAR LCR (33 projects) (43 projects) ($517) ($ 1,737) 23% 29% 15% 51% Figure 3. Number of Analytic Products dominates the portfolio by number of activities, Dealing with SSNs, by Region , FY02­07 but it is slightly smaller by dollar value than cash programs. There are relatively few public works projects, but some large ones which dominate Rest of the world LCR (2 docs) (76 docs) the portfolio. 1% 23% Despite their appearance in all sorts of recent MNA development writing the conditional cash trans- (27 docs) ECA 9% (72 docs) fer portfolio is fairly small--just 6 percent by EAP 23% number of projects and 14 percent by dollar vol- (27 docs) WORLD ume. The number and amount of CCT projects 9% AFR (44 docs) reported also reflects coding to other sectors and (33 docs) SAR 14% multiple program objectives. Using alternate ac- 10% (34 docs) 11% counting methods, which assign CCT activities to SSN, the percentage of the portfolio rises to about a third by dollar volume. The most common theme in analytic work is cash transfers, with non-cash programs run- folio. This highlight that social safety nets are ning second, and public works a distant third. increasingly focused on low income countries, The regional breakdowns are not surprising: despite a common perception that they can ECA leads in analysis of cash transfers, child only be afforded in middle and high income allowances, disability allowances and in-kind contexts. energy programs. LCR dominates work on CCT programs, but has a diverse portfolio Distribution of Activities by Types of including most topics. Africa and East Asia do Intervention little analysis on safety nets, though AFR does some work on public works and food programs, The total lending portfolio for SSN's covers while EAP focuses mostly on cash transfers as many different types of intervention. By dol- well as fee waivers for health and education. lar value, the portfolio is nearly evenly divided Finally, SAR leads the analysis of micro-credit among a range of cash programs, various types and income generation activities and does a of non-cash programs, public works, and techni- good share of studies on public works, food- cal assistance respectively. Non-cash assistance related programs, and CCTs. Figure 4.Types of SSNs activities in WB projects (US$ allocation), FY02­07 Cash ($ 783) CCT, 476 SA/income supply, 247 Disability, 11 Social Pensions, 32 Allow., 18 Non-cash ($ 767) Training, 296 Housing, 255 Education, 104 Energy, 14 Basic Transfers, 57 Health, 41 Public Works 760 Technical assistance 760 Microc./Inc.gen. 176 Others 123 Food-related 31 0 100 200 300 400 500 600 700 800 900 US$ million The SSN portfolio has a good track record of Future Activities and Strategies credible impact evaluations--especially condi- tional cash transfers and public works programs. Based on an assessment of the current trends, Of the CCT programs in 77 countries in this country needs and other factors an active future portfolio, credible evaluations are available or portfolio is expected in the area of SSN's. The planned for 10 and results to date are largely substance of the portfolio is anticipated to focus on several areas including: positive. Impact evaluations and beneficiary as- sessments of public works programs are available ·work on implementing safety nets in the in- for only five of the seventeen countries where come countries of South Asia and sub-Saharan the Bank supports this type of intervention, but Africa; these account for more than 80 percent of the public works portfolio (of US$760 million). ·lending for CCTs in additional countries; Distribution of Activities by Lending ·further work throughout the portfolio, espe- Instrument cially in middle income countries, on insti- tutional issues--targeting, decentralization, Seventy percent of the projects approved over improved service delivery, etc.; and the period FY02­07 are investment loans which represent 62 percent of the total spending on SSN ·policy issues throughout the portfolio, particu- activities, the remainder are policy based or `ad- larly how safety nets fit in the poverty reduc- tion and social policies of each country. justment' operations. Concerning analytic work, the largest category is working papers, which to- ·Higher share of non-lending activities, re- gether with the book category; add to 43 percent sponding to government preferences to self of total products. The World Bank is also active finance safety nets. in capacity building via training. In FY 05 and FY06 approximately 20,000 training days were provided related to SSN's. The World Bank Social Safety Nets Primer series is intended to provide a practical resource for those engaged in the design and implementation of safety net programs around the world. Readers will find information on good practices for a variety of types of interventions, country contexts, themes and target groups, as well as current thinking on the role of social safety nets in the broader development agenda. The findings, interpretations, and conclusions expressed herein are those of the author(s), and do not necessarily reflect the views of the Interna- tional Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, col- ors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. World Bank, Human Development Network Social Protection, Social Safety Nets http://www.worldbank.org/safetynets