“Productive” safety nets seem to be all the rage, with Ethiopia’s Productive Safety Net (PSNP) spawning a crop of “wannabes” – such as the PSNPs of Mozambique and Tanzania – and significant enthusiasm among donor agencies. In fact, so popular are “productive” safety nets that low-income countries have been persuaded to take on significant loans to finance them. After all, they’re productive, so they must be a good investment.
Yet, on closer examination “productive” safety nets seem to bear a remarkable resemblance to traditional workfare: to receive cash benefits, people have to undertake hours of hard labour, often under a hot and unforgiving sun. As the World Bank has pointed out – see Subbarao et al (2013) – workfare commenced with the workhouse of Victorian England and has continued as a favoured social protection instrument of neoliberals and those who fear that unconditional transfers create dependency. Workfare ensures that the poor don’t receive “handouts:” instead, they’re made to work for their bread, just like Oliver Twist
Yet, the term productive safety net suggests a very different type of instrument to traditional workfare, which is usually regarded as a rather demeaning form of social security. So, is this contemporary form of workfare really that different and is it as productive as its advocates would lead us to believe? Just to be boring, why don’t we look at the evidence?
There have been two recent evaluations undertaken of Ethiopia’s PSNP, one by Berhane et al (2011) and another by the Young Lives Project (Tahere and Woldehanna 2012). Unfortunately, the evidence from these evaluations does not support the notion of the PSNP as productive: in fact, it’s rather more Oliver Twist than budding entrepreneur.
One of the most striking findings from Berhane et al (2011) is that, among participants on the PSNP, “the proportion of primary food sources contributed from own production declines.” So, participants on the PSNP actually become less productive and, indeed, more dependent on the PSNP transfer. In fact, the programme seems to be achieving the opposite of its aim of “graduating” participants out of poverty.
So, does the Young Lives study tell a different story?
Unfortunately, Tahere and Woldehanna (2012) appear to confirm the findings of Berhane et al (2011). Indeed, the picture they paint is even more alarming. They found that participation in the PSNP’s public works had a surprisingly negative impact on both food and non-food consumption: “On average, participation of households in the [public works] programme reduces per capita consumption expenditure per month by 33 birr (US$1.86), per capita food consumption per month by 21 birr (US$1.18) and per capita non-food expenditure per month by 12 birr (US$0.67).” They also found that the PSNP is not building the assets of participants, one of the key features of a “productive” social security scheme.
Tahere and Woldehanna (2012) argue that their “results seem to support the general public opinion that the PSNP is making some people dependent on aid and is not lifting households permanently out of poverty.” They note that: “People who were not included in the PSNP worked hard to increase the amount of payment they obtained from off-farm employment (wage labour and non-farm business), while many PSNP beneficiaries waited for low-paying public work, which they saw as less risky.”
However, Tahere and Woldehanna went further: they found that, not only are households consuming less, children are suffering. Participation by households in PSNP’s public works has led to children spending more time on household chores and on paid and unpaid labour outside the home. In effect, when their parents are engaged in public works, they substitute for them. Furthermore, even though it is against the programme’s regulations, many children also miss school to work on the PSNP. Others combine working on the PSNP and going to school but they end up tired, which must affect their performance.
Similar concerns with “productive safety nets” – or workfare – have been found elsewhere. Manley et al (2012) undertook a systematic review of the impacts of cash transfers on child nutrition. While unconditional cash transfers have a positive impact, workfare appears to increase child undernutrition. Another study by Helen Keller International (undated) examined Bangladesh’s Chars Livelihoods Programme and found that the participation of women in workfare led to children having poorer nutrition than when men were involved, presumably because the children were denied essential care when their mothers were away. Furthermore, the women themselves were more likely to be thin when compared to women in households with only men engaged in the public works.
Of course, one of the problems with workfare is that it is a very inefficient form of social protection. Participants in workfare face significant opportunity costs since they have to give up other income earning opportunities. In Bangladesh, for example, Ahmed et al (2007) found consumption increasing by only 30 cents for every dollar earned. Generally, opportunity costs range between 30% and 70%. This contrasts dramatically with unconditional transfers which are often associated with a multiplier effect: families use their income to invest in their own income generating activities, rather than being pulled away to work for others.
So, are we seeing the creation of a new myth of the “productive safety net,” similar to those we’ve discussed in our recent papers on BOLSA UnFAMILIAr and the Seven Deadly Myths of Social Protection. Or, perhaps we are witnessing a clever piece of marketing, transforming workfare into a “must have” social protection instrument for developing countries, which leads to the next “must have,” a soft loan.
Yet, it is evident that workfare is a much less productive instrument than well-designed unconditional transfers. Instead of obliging people to invest their energy in public works – from which they often derive no benefits – recipients of unconditional transfers can invest in their own income generating activities, generating higher – not lower – consumption. And, importantly – and in significant contrast to workfare – well-designed unconditional transfers bring positive benefits for children, improving nutrition and school attendance.
So, let’s have less Oliver Twist and more investment in social security schemes that really do enable families to be more productive.
(By the way, if anyone wants a very quick overview of workfare schemes, I’d suggest reading McCord 2005).
Berhane, G., J. Hoddinott, N. Kumar, A. Taffesse, M. Diiressie, Y. Yohannes et al. (2011)Evaluation of Ethiopia’s Food Security Program: Documing Progress in the Implementation of the Productive Safety Nets Programme and the Household Asset Building Programme. International Food Policy Research Institute, Institute of Development Studies, University of Sussex.
McCord, A. (2005) Win-win or Lose? An Examination of the Use of Public Works as a Social Protection Instrument in Situations of Chronic Poverty. Paper presented at the conference on Social Protection for Chronic Poverty, University of Manchester, 23-24 February 2005.
Subbarao, K, C. Del Ninno, C. Andrews and C. Rodriguez- Ales (2013) Public Works as a Safety Net: Design, Evidence and Implementation. Washington DC, World Bank.
Tafere, Y., and E. Woldehanna (2012) Beyond Food Security: Transforming the Productive Safety Net Programme in Ethiopia for the Well-being of Children. Working Paper No. 83. Young Lives, Oxford Department of International Development, University of Oxford: UK, Oxford.