Document Library

Systemic Shocks and Social Protection: Role and Effectiveness of Public Works Programs

Author: K Subbarao
Date: 2003
Size: 35 pages (139 KB)

Access full text: available online

Summary

Public works (workfare) programmes have been important counter-cyclical interventions in both developed and developing countries for many years. This paper from the World Bank discusses the rationale behind such programmes and gives an overview of experiences in a number of countries – many of them in Asia and Africa – focusing on design features and how the programmes were selected and implemented. The paper concludes that the success of each programme depends very much on its design features.

In the developing world generally, and in Asia and Africa particularly, public works programmes have significantly mitigated the negative effects of climatic risks on poor farmers and farm labourers. These programmes typically provide unskilled manual workers with short-term employment on projects such as road construction and maintenance, irrigation infrastructure, reforestation and soil conservation. They are undertaken with multiple objectives including providing temporary income transfer benefits to the poor, smoothing consumption, ensuring household food security, creating assets, and developing poor areas. Sometimes the actual implementation is handled by small-scale private contractors, NGOs, or social funds.

Four important features of workfare programmes must be carefully designed to maximise the amount of programme benefits that accrue to the poor. They are: the level of the wage rate, the mode of wage payment, the duration and timing of the public works themselves, and the labour intensity of the programme (share of wage bill in total cost).

• Self-selection can be encouraged if the wage paid by the public works programme is set at slightly below the market wage for unskilled labour.
• The way in which the wage is paid influences the degree to which the programme is targeted at the poor generally and at women in particular. Task-based wage payments may be particularly popular with women.
• The timing and duration of employment often determine the stabilisation (risk reduction) gains. Even with small transfer benefits, the stabilisation benefits may be large, especially in economies subject to periodic natural disasters.
• Achieving high labour intensity is not easy in practice, even when common labour-based methods of production are available. Planners must give careful attention to the quality of the assets to be created and the potential of such assets to create second-round employment benefits.
• Future benefits from public works can be substantial if the programme is well designed and implemented: the programme will then be cost-effective.

The main constraint in implementing public works programmes in much of Africa is a lack of capacity; this can be eased if donors coordinate their activities and provide assistance to build private contracting capacity. In general, the effectiveness of workfare programmes can be increased through:

• Assured funding
• Community participation
• Sound technical assistance
• Proper understanding of the social structures and communities where the projects are located
• Coordination with local organisations that represent the poor.

Access full text: available online

Source: Subbarao, K., 2003, ‘Systemic Shocks and Social Protection: Role and Effectiveness of Public Works Programs’, Social Protection Discussion Paper Series no. 0302, World Bank, Washington