Seminar How can the abolition of user fees and the provision of in-kind support impact on child poverty?, Lecture Series Social Protection: Making Child Poverty History? London, 15 June 2005 Christina Behrendt Social Security Department International Labour Office, Geneva Poverty reduction through transfers in cash and in kind: Contrasts and complementarity

15 June 2005 ILO SOCFAS 2 Outline 1.Introduction 2.Transfers in cash and in kind 3.Affordability 4.Effects on child poverty 5.Conclusions

15 June 2005 ILO SOCFAS 3 1. Introduction Social protection is increasingly recognized as an effective way of reducing poverty Children as a particularly vulnerable group Right to social security Form of provision: cash or in-kind?

15 June 2005 ILO SOCFAS 4 2. Cash vs. in-kind transfers Mode of provision dependent on benefit to be provided What is the role for for cash and in- kind benefits in low-income countries? Encouraging examples

15 June 2005 ILO SOCFAS Arguments in favour of in-kind transfers Targeting Control over use of transfer Less inflationary risks Less security risks Less prone to corruption and diversion

15 June 2005 ILO SOCFAS Arguments in favour of cash transfers Choice (recipients priorities) Cost-efficient (both administration costs and for recipients) Stimulation of local markets Multiplier effects Less prone to corruption if regular and transparent benefits

15 June 2005 ILO SOCFAS 7 3. Affordability Could low income countries afford a minimum social protection package? To what extent could such a package be financed out of domestic resources? How much international assistance would be needed over the next years?

15 June 2005 ILO SOCFAS Minimum Social Protection Priority basic social protection package: Universal access to essential health care Basic education (primary education) Minimum income security Basic old age and invalidity pensions Cash benefits to children (notably orphans)

15 June 2005 ILO SOCFAS 9 Preliminary Results for Tanzania: Scenario I – Expenditure

15 June 2005 ILO SOCFAS 10 Preliminary Results for Tanzania: Scenario I – Financing

15 June 2005 ILO SOCFAS 11 Poverty reducing effects of a universal old-age pension

15 June 2005 ILO SOCFAS 12 Poverty reducing effects of a child benefit to school-age children

15 June 2005 ILO SOCFAS 13 Poverty reducing effects of an old age pension and a child benefit

15 June 2005 ILO SOCFAS 14 Poverty reducing effects of a targeted cash transfer to the most vulnerable

15 June 2005 ILO SOCFAS 15 Conclusions Both in-kind and cash transfers can play a strong role in broader social protection strategies Basic level of social protection is affordable to some extent also in low income countries, yet some transitional extrernal support might be necessary Pronounced direct effect on poverty reduction for children and expected positive long-term effects on social development