Promoting the social inclusion of the extreme poor at scale in developing countries: what do we know?

Published on 12 March 2015

This Observation article reviews research evaluating umbrella programmes in Latin America which aim to reduce extreme poverty. The results provide more evidence of the importance of precise policy design and the difficulty of scaling up programmes to a national level.

Poverty in Latin America has been greatly reduced over the past 20 years. However, around 15% of the population remained in extreme poverty in 2011 – defined as average daily consumption of $1.25 or less - and such households risk exclusion from the gains in living standards enjoyed by others, and from participating in society more widely1.

Policymakers in a number of countries have responded to this by implementing innovative umbrella programmes targeted at these households, which bring together a number of often pre-existing policies. An evaluation by IFS researchers of one such policy piloted in Colombia, however, suggests that it had no effect on either take up of social programmes or on labour market outcomes. Evaluation of a somewhat more intensive programme in Chile suggests that while it was more successful in promoting take up of social programmes it still had no effect on labour market outcomes. In fact the most successful programmes tend to be smaller scale and more targeted, often run by NGOs.

The difference in results looks likely to arise from the details of policy design. This provides more evidence of the importance of precise policy design, and especially of not assuming that the beneficial impacts of small resource intensive programmes will be replicated when similar programmes are implemented with less resource.

This type of umbrella programme aims to improve the living standards of the extreme poor along many dimensions, including housing, health and employment. The rationale is to tackle a range of different causes of poverty simultaneously by providing preferential access to a range of existing social services, while also improving the standard of these services. Social workers are then assigned to households to encourage the use of these programmes. In addition, these social workers help families to identify specific economic and social barriers to exiting extreme poverty, and provide guidance on how to overcome these constraints. These programmes account for an important share of social inclusion funding in Latin American countries, from 5% in Colombia in 2013 to 20% in Chile in 2014.

IFS researchers conducted an evaluation of a pilot of one such programme, Unidos, which was introduced in Colombia in 2009 and has since been rolled out nationally. This evaluation provides evidence on the impact of a large-scale pilot scheme, examining how the introduction of the programme has changed both the awareness and take-up of social programmes, and the labour market outcomes of households in extreme poverty.

The results suggest that the pilot scheme had no impact on these outcomes2. This is likely to be as a result of the fact that each social worker – the key delivery agents – was assigned as many as 150 families to work with and was thus unable to spend significant amounts of time with individual families. In other cases, social workers lacked sufficient training. Despite these negative results the programme has been subsequently rolled out nationally in a very similar manner.

Unidos in Colombia was inspired by an earlier programme introduced in Chile in 2002 under the name of Chile Solidario (CS). CS provides a greater number of home visits from social workers, and so potential benefits are likely to be greater. In addition, social worker quality is likely to be higher, the coordination of the supply side of social services seems to be stronger, and the programme also provides a small monetary grant to cover the costs of participating in CS. A recent evaluation of the programme, involving IFS researchers, suggests that CS had a positive impact on the take-up of the family allowance for poor children and the take up of employment programmes. Importantly, the take-up of programmes was mainly driven by households who were disconnected from the welfare system or were outside of the labour force before the intervention, highlighting its success in promoting social inclusion. However this was not accompanied by widespread improvements in housing or employment outcomes3.

Taken together, this evidence has policy implications that are important not only for Colombia and Chile, but for other developing countries where similar programmes are being introduced or considered. Unidos, in its current form, is unlikely to make a significant contribution to the reduction of extreme poverty in Colombia. The evidence from CS suggests that even a stronger version of Unidos is unlikely to have significant impacts in improving employment outcomes for the average member of their target population in the medium to long term.

Does this then imply that Unidos and CS should be scrapped? The answer is not so simple, and depends on the ultimate objective of the programme. CS partially achieves reductions in social exclusion, and therefore may provide a valuable impact. However, neither programme appears to succeed in alleviating extreme poverty. What then should be done to tackle this problem?

Some insights can be gained from successful smaller-scale interventions operated by non-government organisations, where existing evidence suggests that better targeted programmes are more successful at reducing poverty and promoting social inclusion. Such programmes are more focused than Unidos and CS in the sense that, rather than targeting a range of problems at once, they focus on the different causes of poverty one by one. Successful programmes include BRAC’s ‘Targeting the Ultra Poor’, started in Bangladesh in 2002 and subsequently exported to a range of other countries. A similar programme now is being implemented in Colombia through an NGO called Fundación Capital, and is using part of the Unidos infrastructure.

Despite the positive evidence associated with these more targeted interventions, incorporating any new programme into a national welfare system faces several challenges both from difficulties associated with scaling up an intervention from a small pilot scheme to the national level, and also from acquiring the approval and assistance of relevant government departments and existing institutions. This process can make it difficult to scale up programmes at a reasonable cost, even if they are well designed.

IFS researchers have designed and evaluated an intervention that uses the infrastructure of the existing Familias en Acción programme in Colombia to deliver a scalable, cost-effective and integrated early childhood programme through home visits. Experimental evidence from this evaluation suggests that this programme has been successful and this may provide some positive policy lessons in this area.

A coordinated effort among different national agencies administering a number of high-quality programmes (as opposed to an array of separate programmes) seems to be the right approach to tackling extreme poverty; but it needs to be managed and executed well. Ultimately, a further understanding of the impacts of these programmes, as well as the reforms they undergo, is crucial to decide whether programmes such as Unidos and Chile Solidario ultimately provide value for money, or whether they should instead be replaced in their entirety.

1. See, for instance, Cecchini, S. and R. Martinez (2012), Inclusive Social Protection in Latin America: a comprehensive, rights-based approach, Libros de la CEPAL No.111

2. A complementary analysis presented in a report to the Government suggested no consistent impact on a range of other outcomes such as housing, health and access to justice. See ‘Evaluación de Impacto de Juntos (hoy Unidos). Red de Protección Social para la Superación de la Pobreza Extrema’, Informe de Evaluación  Diciembre de 2011, by Fedesarrollo, Econometria, SEI and IFS.

3. Due the lack of administrative data about other social services or outcomes, Carneiro, Galasso and Ginja (2014) cannot say anything about a larger array of social programmes and services being made available.