Safety Nets and Food Programs in Asia: A Comparative Perspective

26 Pages Posted: 9 Sep 2013

See all articles by Shikha Jha

Shikha Jha

Asian Development Bank

Ashok Kotwal

University of British Columbia (UBC) - Department of Economics

Bharat Ramaswami

Indian Statistical Institute

Date Written: September 1, 2013

Abstract

Many countries adopted safety net programs to deal with the food crisis of 2008. However, such programs are often beset with targeting errors, inefficiencies, and fraud. Despite this, there is no systematic comparative analysis of safety nets. The objective of this paper is to identify generic issues germane to safety net design and their role in determining success. We examine the performance of safety net programs in Bangladesh, India, Indonesia, and the Philippines in terms of people covered, food distributed, and income support provided. These countries spend 1%-3% of their gross domestic product on safety nets — small in relation to developing and industrial economies. We find an across-the-board failure of targeting in the four countries. The reasons range from elite capture, incorrect identification of the poor, their lack of access, barriers to participation, and regional allocation biases. Even if perfect targeting could cover the entire target group and eliminate leakage to non-target groups, the target groups may not receive the full subsidy due to illegal diversions, operational inefficiencies, and excess costs of public agencies. The success of the safety nets will depend on increasing the participation of the poor and minimizing program waste. Computerization of supply chains to track grain supplies can reduce diversion, and switching from in-kind to cash transfers can cut administrative and other costs of physical handling. The mix of tools would depend upon the economic, political, cultural, and social backgrounds of the country, and its administrative and fiscal capabilities to provide safety net programs.

Keywords: Conditional and unconditional cash transfers, in-kind transfers, social safety nets, Bangladesh, India, Indonesia, and Philippines

JEL Classification: D60, I38

Suggested Citation

Jha, Shikha and Kotwal, Ashok and Ramaswami, Bharat, Safety Nets and Food Programs in Asia: A Comparative Perspective (September 1, 2013). Asian Development Bank Economics Working Paper Series No. 371. Available at SSRN: https://ssrn.com/abstract=2322639 or http://dx.doi.org/10.2139/ssrn.2322639

Shikha Jha (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Ashok Kotwal

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

Bharat Ramaswami

Indian Statistical Institute ( email )

7 S. J. S. Sansanwal Marg
New Delhi, 110016
India
91 11 6514594 (Phone)
91 11 6856779 (Fax)

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