Evaluating Emergency Programs
Emergency programs are designed to soften the impact of economic crises-income shocks experienced by an entire community or country-on consumption and human capital accumulation. Of particular concern are poor people: as a result of inadequate savi...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/12/1660271/evaluating-emergency-programs http://hdl.handle.net/10986/19418 |
| Summary: | Emergency programs are designed to
soften the impact of economic crises-income shocks
experienced by an entire community or country-on consumption
and human capital accumulation. Of particular concern are
poor people: as a result of inadequate savings or inadequate
access to credit or insurance markets, the poor are unable
to draw on resources from better times to offset a loss in
income today. Further, the systemic nature of the shocks
means that risk cannot be effectively pooled through local
informal insurance mechanisms. Emergency interventions have
included social funds, workfare programs, training programs,
conditional transfers (linked to health center visits or
children's school attendance, for example), and
traditional direct, unconditional transfers in kind (such as
communal tables or targeted food handouts). The author
highlights some conceptual problems in choosing among these
options and evaluating one program of a certain type
relative to another. It argues that most such interventions
can be thought of as containing both a transfer and an
investment component and that their evaluation as emergency
programs needs to more explicitly incorporate the
intertemporal nature of their design. More specifically, the
mandated investments in physical or human capital will
benefit the poor, but only in the future-after the
crisis-and their implementation diverts resources from
alleviating present hardship. This needs to be reflected in
the discount factor used to evaluate these investments.
Maloney argues that the way emergency programs are financed,
particularly the way the burden is shared between central
and municipal governments, also has important implications
for the criteria for evaluation. The analysis suggests that
most conventional means of evaluating projects-net present
value at market discount rates, labor intensity, cost per
job created-may not be relevant or are at least ambiguous in
the context of emergency programs. As a result, policymakers
are left with few "hard" indicators with which to
evaluate such programs. Maloney argues for an approach in
which the policymaker weighs the appropriateness of
deviations from the theoretically "ideal"
benchmark program, which delivers a "smart"
transfer costlessly to the target beneficiary, and discusses
the arguments for or against these deviations. The modest
goal of the proposed approach is to clarify the key issues
and provide more solid grounding for the necessarily
subjective judgment calls that policymakers will inevitably
have to make. |
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