Linking Analysis to Policy

1. Linking Analysis to Policy Taimur Khilji Policy Specialist United Nations Development Programme

2. Outline • Evidence based policy? A buzzword, perhaps one to be taken more seriously. • What is Social Protection? The different definitions in currency • Finally, an interesting example that touches upon social protection, Agriculture, Climate Change, Micro insurance… what lessons and policy implications can be drawn?

3. The Landscape • Issue Identification • Gathering Evidence • RelevantData, Quality of Data • Analyze (cost-benefit, counterfactuals, scenarios, behavioural change, etc.) • Policy options: are they feasible? • Impact!? Is it measureable?

4. What is ordinarily done.. • Gather Scattered Evidence • Weak quality and lacking in relevance • Often based on heresay • Carry out a Quick Analysis • bias prone • weak assumptions and premises • Offer Generic Policy Options • loosely linked with analysis • Try to Measure Impact • hard to measure given the weak foundation Linkages weak between each phase measuring impact and attribution becomes difficult

5. Social Protection…What is it?

6. Social Protection • A buzz word under which a wide range of initiatives can be included. Definitions are telling… World Bank’s definition of Social Protection • “Aiming to reduce vulnerabilities and managing the economic risks of individuals, households, and communities […] and enhance the social status and rights of the marginalized. Social protection covers formal (for example, social security and social assistance) and informal (for example, community transfers) mechanisms of social risk management […] provided on the private, community, market, or public level, but also comprises political processes that empower and include marginalized groups with regard to access to social protection mechanisms.”

7. Social Protection • “ADB defines Social Protection as the set of policies and programs designed to reduce poverty and vulnerability by promoting efficient labor markets, diminishing people’s exposure to risks, and enhancing their capacity to protect themselves against or cope with hazards and interruption or loss of income. […] SP consists of five major elements: labour markets, social insurance, socialassistanceandwelfare service programs, micro and area-based schemes and child protection.” Lets look at a couple of more definitions

8. Defining Social Protection… ILO’sSPF-Initiative promotes a comprehensive approach to social protection, including: • “basic set of essential social rights and transfers […] to provide a minimum income and livelihood security for all” • “supply of an essential level of goods and social services such as health, water and sanitation, education, food, housing, life and asset-saving information that are accessible for all”
 And ODI defines Social Protection quite concisely, yet comprehensively as.. “the public actions taken in response to levels of vulnerability, risk and deprivation which are deemed socially unacceptable within a given polity or society.” SP seems to be all encompassing concept, overlapping, crisscrossing across sectors and across institutions—public and private..

9. What is Social Protection? • Formal and Informal Mechanisms (WB) • Mechanisms of social risk management (WB) • Set of Policies and Programs to reduce poverty and vulnerability (ADB) • Basic set of essential social rights and transfers (ILO) • Supply of an essential level of goods and social services (ILO) • Public actions taken in response to vulnerability (ODI) …at the private, community, market, or publiclevel […] a political process Welfare service programs Health Water and Sanitation child protection micro and area-based schemes Labour Markets Climate Change Social Assistance Social insurance Gender Food Housing Disaster risk reduction A minimum income and livelihood security for all Builds Resilience Empowers marginalized groups Reduces Vulnerability and Risks

10. Horn of Africa Risk Transfer for Adaptation (HARITA)

11. Ethiopia HARITA: The Context Location: Ethiopia’s northern most state of Tigray(village of AdiHa) Roughly 85 percent of all Ethiopians are engaged in smallholder, rain-fed agriculture, and climate change poses a grave threat. More than 90 districts (in excess of 2 million households) already drought-prone. Climate projections for the region suggest that more intense and prolonged extreme events such as floods and droughts may be experienced in future. Province of Tigray

12. Rainfall and GDP growth move together in Ethiopia (1982-2000) Source: IGAD and ICPAC (2008)

13. Climate Risk Management Package • Offers Crop Insurance in exchange for Work (labor)--poorest farmers to use their labor to buy insurance. • The option to trade labor for insurance boosted the number of farmers able to participate in the program, nearly doubling the enrollment that was expected expanded from 200 farmers in the pilot village in 2009 to over 13,000 farmers in 43 villages in 2011, directly affecting approximately 75,000 people, while maintaining the same cost structure. • Grafted the“insurance-for-work” program on top of the well established Gvernment’s “food and cash-for-work” Productive Safety Net Programme (PSNP), a well-established program that serves 8 million chronically food-insecure households across the country.

14. Climate Risk Management Package • Education and exposure to micro-insurance, increased access to credit, and improved risk management techniques are necessary measures for these populations to adapt to the changing climate. • The labor was toward building resilience. Examples of activities farmers engaged in • Making and using compost—critical for rebuilding soil nutrients and improving soil moisture retention. • Constructing small scale water harvesting and planting nitrogen-fixing trees and grasses-- Promoting soil regeneration, water conservation, and reducing the risk of flooding. • Cleaning teff seeds—Boosting productivity and controlling weeds. • Therefore farmers are able to benefit even when there is no payout; the risk reduction measures benefit them even during years in which rainfall levels are adequate.

15. Continued Analysis ensuring a Feedback loop Data gathered through • Demand and needs assessments • Vulnerability mapping • Establishing community focus groups • Surveys and simulation activities to determine product preferences • HARITA staff worked closely with the communities to customize the insurance product to better suit their needs. Based on the assessments, certain services were provided • capacity-building to encourage participation and regular education and financial literacy workshops to ensure that communities understood the benefits of insurance, credit and disaster risk reduction activities

16. Lessons and Policy Implications • PNSP has played a pivotal role vis–a-vissocial protection, as it ensured coordination and alignment between government, donors/non- governmental organizations and financial institutions. • Therefore, important that the right local government and non-government partners be identified (and be well coordinated) early in the process in order to overcome capacity and other potential implementation constraints.

17. something tricky to measure Lessons and Policy Implications • Much of the success in the pilot was attributed to the high degree of trust established between project partners and farmers; community participation, which, in turn, led to improvements • Also, marketing efforts and the high level of community involvement in building the product…and subsequent improvements in services and products during the project cycle.

18. Lessons and Policy Implications • It did appear that there is a trade-off between personalized products and long term scalability and sustainability (cost-efficiency) for such products. While some degree of customization is important to ensure uptake and demand, too much would have efficiency implications, thus negatively affecting sustainability.

19. Lessons and Policy Implications • A microinsuranceprogramme requires scale—a large number of clients—for it to be commercially viable. • It would be prudent that during a pilot phase sufficient seed funding be available to kick start the process until demand for the product expands. • It is therefore important that initial funding be available along with a host of willing partners, including government. • Also, a long-run strategy of expansion needs to be built into the programme, which identifies additional communities should the project be expand- ed.

20. Lessons and Policy Implications • Given the multi-dimensional nature of poverty/vulnerability, it is useful to offer a package of services that address multiple needs. • The successor project (based on the success of the pilot) will include a ‘savings’ component, in addition to insurance for work, food/cash for work, and credit, thus offering a bundle of products and services to reduce risk and vulnerabilities. • Finally, context matters! It does not automatically follow: what works in place X will work in place Y. Need to pay close attention to the assumptions and premises on which the project is built.