Economic Strengthening for the Very Poor (ES4VP)
Economic Strengthening Disciplines
Food Security | Social Protection and Social Safety Nets | Transfer Programs |Social Capital and Civic-Society Organizations – Voice | Education, Literacy, Skills, Empowerment | Access to Finance | Savings |Income Generation Interventions | Markets and Value Chains
When considering HES, food security must also be considered, as they are related to one another. The USG considers food security to consist of three interrelated components: access, availability, and utilization. Recently, a fourth factor has also become prominent: resilience or stability. The HES approaches covered in this section relate directly to the access and resilience dimensions of food security; the utilization dimension of it is covered in the health and nutrition section.
Safety nets provide for social protection for the poorest and most vulnerable members of society. These include formal programs established by governments; social support based on kinship, community relations, humanitarian or religious initiatives; or various forms of formal and informal credit systems.
Over the last decade, the interest and activity in social protection has experienced a paradigm shift, with at-scale safety net programs expanding at a rate of two countries per year.
Social safety net programs, today, are being built on a national scale in 98 countries, up from just 72 in 2000. In addition, some 33 countries currently are experimenting with innovative pilot initiatives, 22 of which are in Sub-Saharan Africa.
Recent impacts of safety nets include:
Stimulating local economies. Safety nets provided to poor households can have significant multiplicative effects on others in the local economy. In Malawi, a cash transfer program generated up to US$2.45 in local communities for every dollar provided to beneficiaries.
Investing in human capital: education, health, nutrition. Conditional cash transfers (CCT) have increased school attendance in Bangladesh and Cambodia by 12 and 31 percent, respectively. In other words, in the absence of the CCT, school attendance by poor children in parts of Cambodia would have been around 60 percent instead of nearly 90 percent. CCT programs in Colombia and Ecuador have bolstered health center visits for children by 33 and 20 percent respectively. In Guatemala, children under two years of age who benefited from a nutritional safety net program earned wages 46 percent higher as adults compared to those who did not benefit from the intervention.
Safety Nets Improve Resilience to Crises An established system of safety nets is key to respond and deliver assistance swiftly in times of crises. In addition, such a system connects beneficiaries to other livelihood interventions. For example, in 2011 the Productive Safety Net Program (PSNP) in Ethiopia scaled up to meet the additional needs sparked by the Horn of Africa crisis. On top of its core beneficiaries, PSNP reached an additional 3.1 million people with transfers over a three-month period. The entire response process, from financing to disbursement, took only six weeks.
Because of programs like PNSP, the impact of crises such as droughts on poor and vulnerable families may be—in comparison to the previous decade—substantially lessened.
Moreover, the PSNP platform has been leveraged over the years to provide targeted beneficiaries with financial services (i.e., Household Asset Building Program, HABP). The combination of interventions amplified the impacts and resilience of the programs: When single-intervention beneficiaries are compared to dual-interventional beneficiaries (PSNP and HABP), the latter produced 147 kg more of grains and were over 20 percentage points more likely to use fertilizers and invest in land improvements. The increased agricultural self-reliance, in turn, also helps to protect poor and vulnerable families against calamitous food shortages.
Of all HES interventions, cash transfers have the most robust evidence base employing the most rigorous methodologies and systematically demonstrating impact across multiple dimensions such as poverty, education, health, and nutrition outcomes.
Consumption support interventions are direct transfers of resources, usually in the form of cash, to families in order to support basic needs of household members, particularly children. These transfers may come with conditions, with households engaging in specific behaviors to continue accessing the transfers. Consumption support is most appropriate for the most vulnerable families (“families in destitution”) and aims to build their capacity to pay for basic necessities. PEPFAR OVC programs should prioritize supporting governments to initiate, expand, or be innovative in their social protection initiatives to better serve the needs of OVC families.
USAID's new PSNP/Development Food Aid Program (DFAP), in support of the PSNP, beginning in 2011 builds on programs of the past years to protect household assets and build community assets. New institutional arrangements distribute responsibilities, enabling PSNP to increase its scale, scope and coverage. Additionally, greater monitoring and accountability allows for improved early warning and response.
PSNP continues to transfer resources primarily through a food-for-work program, known as the “public works” program. Those beneficiaries who are able will engage in public works in exchange for an agreed-upon food ration. These activities support beneficiaries on another level through focus on development of community assets like economic and social infrastructure assets (markets, roads, schools, clinics) and restoration of soil, water, forest and other natural resources.
Partners work in the areas of nutrition, social assistance, agriculture and environment to protect poor households’ assets and provide opportunities to diversify livelihood options. The new phase incorporates improved nutritional practices through the expansion and improvement of dietary diversity, access to locally-available foodstuffs, and training programs on basic gardening and animal husbandry.
Social transfers (food or cash) are an inadequate instrument on their own for building sustainable livelihoods and resilience against fluctuations and shocks. Social transfers can be effective in smoothing consumption and protecting existing assets, but complementary interventions are needed to increase incomes and assets to the point where participants are ready to graduate from the programme. Delivering both ‘livelihood protection’ and ‘livelihood promotion’ requires a package approach, including both support to household consumption and to livelihoods.
Ethnographic research outlines three general areas in which poor families use financial tools: 1) generating useful lump sums of cash, 2) weathering bad times, and 3) funding day-to-day expenses. The evidence for the important role of savings is solid and growing. Several experimental studies show that access to savings increases household investments in different domains, including agricultural inputs, small businesses, and health. These findings are consistent with many other studies that have used less rigorous methods, suggesting that the benefits of savings for poor households may be generalizable across contexts. Other experimental studies have investigated the impact of credit on household welfare, with mixed results. There are potentially good reasons for this, in particular because families may use (and benefit from) credit in very different ways. This makes it difficult to discern generalizable impacts across a population, but it does not mean that access to credit is a poor strategy. Instead, it suggests that context matters and that credit may be a less appropriate strategy for some families or outcomes than for others.
OVC partners and programs should integrate money management and/or income promotion interventions to help OVC families transition to more stable and self-sustaining economic circumstances. Money management interventions introduce mechanisms for saving financial and other assets, accessing prudent consumer credit, and fostering the knowledge and behaviors families need to better match their expenses with their income. Formal financial services tend to be available only from a limited number of financial institutions, usually located in urban areas and targeting less vulnerable clients. Accordingly, more informal mechanisms independent of financial institutions are often more appropriate and accessible for more rural or vulnerable households. Such mechanisms use self-selected groups of individuals or households to mutually pool and guarantee each other’s savings, and they are derived from traditional arrangements easily understood by most households. These interventions are helpful and appropriate for many families, particularly those with access to some income sources but still unable to invest adequately in their children (“families struggling to make ends meet”). In many contexts, these families likely make up the majority of potential participants in OVC programs and, accordingly, savings-led money management interventions should be a core focus of PEPFAR programs and partners.
While traditionally a common HES approach, interventions to promote income generation have the weakest evidence base for OVC programming. There are many different ways to foster income generation (access to credit, business skills training, enhancing productivity, or improving market access), which complicates research and confounds findings. However, of all HES interventions, family income promotion has the most distant causal links with child well-being. The impact pathways have not been adequately explored beyond descriptive studies. The implications are that traditional approaches may only work for some families, while others require alternative approaches or longer time horizons. Careful analysis and highly capable implementing partners are prerequisites for success, and further rigorous research is necessary to better understand what works and why.
Income promotion helps families invest in appropriate low-risk activities to diversify and stimulate moderate growth in household income. Because these interventions require families to invest some of their own resources, they are most appropriate for households who have adequate mechanisms to manage risk and more access to lump sums of money (“families prepared to grow”). Multiple, diversified, reliable, and frequent income streams tend to receive higher priority than simply maximizing profit from an individual activity. Moreover, households will tend to seek activities that require a low investment and have a low risk of failure, although such activities feature relatively low returns. Microenterprise activities, where families operate their own businesses or farms, are a frequent focus. However, labor-based opportunities (such as formal employment or casual labor) are equally, if not more, important because they may be less risky for families to engage in. Effective interventions should yield self-sustaining outcomes: families should be equipped to finance their ongoing participation in these income opportunities and to manage the natural evolution of the markets they are operating in. PEPFAR programs need access to highly specialized expertise to design and carry out these interventions, so programmers should be judicious and strategic about how they incorporate these interventions into their OVC portfolio.
 PEPFAR Guidance for OVC programming (p. 38)
 State of SSN 2013 Report
 PEPFAR Guidance for OVC programming (p. 38)
 PEPFAR Guidance for OVC programming (p. 40)