Political Economy of Social Safety Nets in Bangladesh

 

Tareq Hossain Khan*

Abstract: Bangladesh has a dynamic range of ‘Social Safety Net Programmes (SSNPs)’, which addresses various forms of risk and vulnerability and attempt to lessen poverty through direct transfer of wealth to the poor. From 1972 the safety net programs have undergone through functional changes in their administrative structure and implementation mechanism. There are 98 specifically designed social safety net programs directly operated by the government of Bangladesh (GoB). This article tries to find out the political motives of SSNPs. It shows many recent SSNPs have been deigned with political objectives, including generating support for ruling class. The poor become subject to political capture. These programmes are too little funded to poverty alleviation. In villages many of the inhabitants try to get public funds through political patronage. Most of these programs have limited coverage and are not adequately funded. It covers only a fraction of the poor. Two-third of the poor are still outside the safety net. Moreover, many programs are short lived and may cease implementation before achieving impact. The 10 top programmes, accounting for 80.5% of total SSNP allocations for 2010-11. It proves that the political government just increase the ‘number of SSNPs’ to attract voter and development researcher. These programmes are inflexible in terms of political vision, unable to absorb transitory poor, and characterized by leakage and embezzlement. 

Keywords: Social Safety Net, Vulnerability, Poverty, Food Security.

Introduction

Social safety nets (SSNs) have an elongated history as a protective method for the deprived that can be traced back as far as ancient Egypt and the Roman Empire. These programme help vulnerable households be protected against livelihoods risks, maintain an adequate level of food consumption and improve food security. These are important elements of a country’s poverty reduction and development strategy.[1] Almost two-fifths of our population appears to be poor in the sense that the resources at their disposal do not meet their basic needs. This volume is roughly similar at the time of independence in 1971. A variety of SSNPs have existed in Bangladesh for decades; employment generation schemes, food subsidies, targeted health and nutritional support programmes, etc. [2] This study aims at sketch and evaluation of existing social safety nets programme in the context of political economy. In the first section of this study a brief discussion of SSNPs including theoretical perspectives are made. The political motives, nature and trend of SSNPs in Bangladesh will be assessed in the second section of the paper, wherein; there coverage, purpose, the contents, critics and other qualitative and quantitative dimensions will be described in detail.

This paper assesses the political intentions of social safety nets in Bangladesh. It examines the achievements and limitations of social safety net programs (SSNPs), which are mainly intended to address food security. The attempt, however, does not go into detailed evaluation on which of the various types of safety net programmes has been successful in Bangladesh. Rather it looks at the overall structure of SSNPs in Bangladesh and their impact on poverty reduction. The major objective of the study is to identify the main sources of targeting errors in social safety nets in Bangladesh, which are generated from policy options. The study further widens the discussion by spotlighting on the potentials and challenges of SNPs, linkages with service and input providers. Finally, this article will depict the potential ways forward for building a viable SSNP system in Bangladesh.

SSNPs: Theoretical Perspective

Social Safety Net (SSN) is an idea that is largely related with the scheme of a short-term safeguard. The objectives of the concept are to protect the poor from all sorts of social, economic and natural shocks. It is a measure taken by the nation state in order to protect the vulnerable section of its population to fall beyond a certain level of poverty (CPD, 2008). The concept of ‘social safety net’ and ‘social protection’ is not new at all.[3] SSNs address chronic poverty and inequality, and protect the poor and vulnerable from individual as well as structural distresses, including during economic reforms (Rahaman and Ahmed, 2010:17).

Safety net came into the ‘development discourse’ during the 1980’s in response to the failure of Structural Adjustment Policy-SAP (Giannozzi & Khan, 2011). Vivian (1994) mentioned that in the early 1990s, SSNps were primarily formulated to serve three objectives: poverty alleviation, to make adjustment programs more politically acceptable and institutional reform. The concept was later popularized in East Asia during the financial crisis at 1990s (Paitoonpong et al, 2008). In western world, the concept follows from the rights based approach, where it is recognized that every citizen is allowed to some basic levels of utilization and it is the responsibility of the State to supply those basic goods and services. In high-income countries, social protection is an institutionalized feature of a social contract between the State and citizens (Lindert, 2005; Alesina & Glaeser, 2004). But what are the motives of SSNPs in Bangladesh? Have there any political motives to introduce new SSNPs? Is it follow the western path or is it free from electoral politics? And what are the loopholes of existing safety net programme? Unfortunately, social protection is viewed in our country as development parameters. Safety nets in Bangladesh are not really an institutionalized system, but often a collection of short-term, scattered programmes. So it is highly linked with electoral democracy. In this viewpoint, social safety net programme is a dependent variable, which is influenced by political economy and electoral politics.

The World Bank (2006) defines social safety nets as ‘non-contributory transfer programs targeted to the poor and the vulnerable.’ Asian Development Bank (ADB) says SSNP means, ‘programs designed to assist the most vulnerable individuals, households and communities meet a subsistence floor and improve living standards.’[4]  There are two kinds of SSNP: conditional and non-conditional. On the basis of way of distribution SSNP can be divided by two broad categories; food or cash transfer and job oriented. Moreover, social safety nets can be either formal or informal in nature, and have both protective and primitive dimensions (Reddy, 1998:1). The traditional role of safety nets is to redistribute income and resources to the needy in society so that the impact of poverty is reduced. To explicit the goal and focus of the SSNP, a researcher (Barkat-e-khuda, 2011: 88) depicts-

‘SSNPs are motivated by both equity and efficiency considerations. They are intended to help the less well-off segments of the population and seek to offset credit and insurance market failures. In addition to creating a fairer society, SSNP play an important role in promoting economic growth by: (i) helping create assets at individual, household and community levels; (ii) helping individuals and households protect their assets when various types of shocks occur; (iii) helping individuals and households to use their existing resources more effectively, and thereby helping them to cope with various types of risks; and (iv) directly raising economic growth rates by reducing inequity.’

So, safety nets have typically been designed to serve one or more of a wide variety of distinct types of objectives. These objectives are often overlapping and interlinked and might be secreted. Values, history, resources, political commitment and socio-economic conditions determined the SSNP of a country.[5] SSNPs are a significant module of Bangladesh’s antipoverty strategy. The running programmes are designed to protect individuals falling into poverty, or to help them out of poverty line. The PRSP documents identify social protection strategies as one of the pillars of poverty reduction.[6] So SSNPs are directly linked with poverty alleviation as well as political economy of Bangladesh.[7]

The objectives of SSNPs in Bangladesh can be divided under four broad categories: (i) employment generation programmes; (ii) programmes to cope with natural disasters; (iii) To support poor families to send their children to school; and (iv) To improve the health status of destitute people by giving incentives (khuda, 2011: 112). Every programme has specific goal, but in Bangladesh, SSNPs have some common goals:

(i) Enhancing the capabilities of the impoverished through increasing their access to essential human services (e.g. through the provision of basic social services, health, food, education).

(ii) Enhancing the incomes of the poor through increasing their access to productive assets (e.g. through agricultural inputs: land, fertilizers, and seeds).

(iii) Improving the incomes of the poor through their existing productive assets (e.g. through prices supports, technical training, and the provision of marketing and transport infrastructure and opportunities).

(iv) Enhancing the incomes of the poor through increasing their access to paid work opportunities (e.g. through employment generation schemes).

(v) Enhancing the incomes of the poor through direct transfers (e.g. micro-credit).

To be triumphant, SSNPs require four elements of policy design: resource availability, technical efficiency, administrative viability and political commitment. Yet the political context of SSNP is often neglected. Several features of political economy: electoral politics of targeting, vision of regime, politics of poverty, corruption and embezzlements local influence and strategic failure, may design and implement safety nets programme. In Bangladesh, SSN is a political as well as programmatic apparatus for minimizing socio-economic discrimination through rearrangement of wealth or food toward the underprivileged groups. These programmes fail to approve a long-term vision whereby the safety net could be intended to provide beneficiaries an opportunity to rise above the state of vulnerability they are in. Due to lack of political commitment, there are serious gaps in program coverage.  Though government has been pursuing a number of SSNPs, most of them are too little funded to poverty alleviation. Safety net programmes have increasingly become an important source of political investment.

As we know, political economy relates to the interaction of political and economic processes in a society: the distribution of power and wealth between different groups and individuals, and the processes that create, sustain and transform these relationships over time (Ouerghi, 2005). This is particularly relevant in the case of SSNs. Safety net programs can be large, are directly targeted at individual households, and can potentially be used by political leaders as populist programs to win election. The implications of “political economy” influencing the administration, targeting, and scaling-up of programs in Bangladesh is obvious. This is of rigorous importance in electoral democratic system with competitive national and local elections. In our framework we identify political economy as the key factor influencing the error selection process, centralized administrative systems, lack of accountability and politicization of programmes as well as every step in the program chain. SSNPs of Bangladesh are not purely economic or poor oriented; they have some political agenda. In this context we will discuss the political aspects and loopholes of SSNPs later. Now we want to discuss whether any constitutional obligation for government to introduce safety net programme.

Constitutional Obligation of Social Safety

Social Protection is a ‘constitutional obligation’ for Bangladesh.[8] As the constitution illustrates, it shall be a fundamental responsibility of the state to attain the basic necessities of life, including food, clothing, shelter, education and medical care (Article 15 [a]). According to Article 18 (1), the state shall regard the raising of the level of nutrition and the improvement of public health as moving its primary duties, and in particular shall adopt effective measures to prevent the consumption, except for medical purposes or for such other purposes as may be prescribed by law, of alcoholic and other intoxicating drinks and drugs which are injurious to health. So, it is not only a moral duty but also a legal obligation to ensure food security for all people.

The provision of social security and safety net programmes are also a constitutional guarantee.[9] According to our constitution the vulnerable people have rights to get state aid. In our constitution there are terms ‘rights to social security’ and ‘social justice’ that is to pronounce, state shall provide public assistance in cases of undeserved want arising from cruel poverty, unemployment, illness or disablement, or widowhood, or orphan hood or in old age, or in other such cases (Articles 15 [c]). Actually its our constitutional promise that Bangladesh shall adopt effective measures to remove social and economic inequality and to ensure the fair distribution of wealth among citizens, and of opportunities in order to attain a uniform level of economic development throughout the Republic (Articles 19 [2]). In spite of that the number of people who consume less than the minimum daily-recommended amount of food rose from 47 million in 1990, to 56 million in 2005 (HIES, 2005).

SSNPs in Bangladesh: Origin, Structure and Trends

Bangladesh has witnessed an increase of safety net programmes over time. Now a day a spectrum of SSNPs are deliberated at the different risk groups. Historically, SSNPs in Bangladesh have cluster around the twin themes of food rations and post-disaster relief (Rahaman and Chowdhury, 2012: 1). Over time, however, safety nets have past these historical limitations and have adapted to mainstream social and developmental issues. There are 98 specifically designed social safety net programs directly operated by the government of Bangladesh.[10] Several programs have been discontinued over time or replaced by newer programs, e.g. the Women Support Center or the Rural Maintenance Program. According to Rahaman and Chowdhury (2012: 2) three factors have forced this process of change: i) a political process whereby the welfare responsibilities of the state have come into sharper focus; ii) a social process of erosion of informal safety nets due to the decay of the extended family system; and iii) a growing realization within the development community that safety nets are crucial to a sustainable anti-poverty strategy.

As a outcome of these aspects, over the couple of decades, Bangladesh has observed a proliferation of different categories of safety net programmes. Keeping in mind the nature and intensions of different programmes, this article categorized the safety net programmes into four broad categories; cash transfer, food-based transfer, subsidy, job generating programme and others (Table-1).

The cash transfer program[11] in Bangladesh attempts to provide assistance to poor households in the form of cash in order to reduce the risk and vulnerability, while food Assistance programs help vulnerable groups to cope with the aftermaths of natural disasters.[12] Subsidy is the highest single expenditure sector for the government of Bangladesh. Largest share (34.5 percent) within the total safety net goes to subsidies for the poor.[13]

Table -1: The Broad Categories of SSNPs in Bangladesh

Cash Transfer Food transfer Price subsidy Job generating Others
Old Age Allowances Vulnerable Group Feeding Agricultural inputs Subsidy Vulnerable Group Development Housing for the Homeless
Maternity allowance Allowance for Retard/Disable Person Test Relief,

Food for Works

Subsidy for Marginal Farmers to cope with the Fuel Price Hike Rural Employment Opportunities for Public Assets Efficiency Development Fund for Expatriate Workers
Allowance to the Widowed Gratuitous Relief Food Subsidy 100 days Employment Generation Program Ekti Bari Ekti Khamar
Honorarium for the Insolvent Freedom Fighters Primary education Stipend Project Power Subsidy Employment Project for Beggers Microcredit
Female Secondary School Assistance Community Nutrition Program health care National Service Free schooling

Source: Modified from Rahaman and Chowdhury (2012), Ahmed et al., (2010)

Ensuring social security of the poor and empowering them through employment generation are at the heart of all of the government’s poverty reduction agenda. Given omnipresent poverty, malnutrition and underemployment in Bangladesh, it is fairly rational that the governmental development policy embraces programmes to generate employment, particularly among the poor. To eliminate curse of unemployment, the government has commenced a number of programmes, e.g. the Food-for-Work (FFW) Programme, Rural Maintenance Program (RMP), and the 100-day Employment Generation Programme (EGP). Launched in 1972, SSNPs now touch 11.6 percent of the population and 30 percent of the poor (World Bank, 2008). However, since around 31.5 percent of Bangladeshi households live in poverty (HIES, 2010), the programs leave out 35 million poor people.

Safety net programs in Bangladesh are governed by various agencies, including many wings of government, non-governmental organizations (NGOs), and donar agencies. At least 23 ministries are engaged in the planning and implementation of these projects. Involvements of multiple ministries cause considerable overlap in programs. There is very little coordination among the ministries in planning, targeting and implementing the various social protection programs. Historically, disbursement for social safety net has been less than 1% of GDP till the late 1990s. However, this expense has been increasing in recent years, due to unprecedented economic growth of above 6%. Social safety net expenditure was 1.21% of GDP during 2006-07 and about 1.60% of GDP for the 2007-08 fiscal year. But now it is stand for 2.5% of GDP (Bangladesh Economic Review, 2012). There were only a few programs until the mid-1990s, and most of them were designed for income support, but from the second half of the 1990s new program types have been initiated almost every year. Due to political pressure and plebiscite, the GoB has increased budgetary allocation and identified various types of vulnerability in striving to improve social safety net during the current fiscal years.

Dynamics of Major SSNPs in Bangladesh

In Bangladesh, SSNPs are one of the key strategy-tools for poverty elevation. The dynamics of SSNPs in Bangladesh have presented a political agenda of democratic government. Therefore, day-by-day the numbers of SSNPs are increasing; up to 2013 that number became 98. It was 66 in 2008-09 fiscal year (Rahaman and Chowdhury, 2012).

Table 2: Allocation of major SSNPs

                       SSNPs

Allocation in FY 2010-11 (crore)

Allocation in FY 2011-12 (crore)

Increase (%)

Employment Generation

Employment Generation for Hardcore Poor (EGPH)

1076

1000

-7.1

National Service

36

190

422.1

Rural Employment and Rural Maintenance Programme

185

140

-24.3

Food-For-Work (FFW)

928

994

7.1

Vulnerable Group Development (VGD)

595

638

7.3

Test Relief (TR)

898

954

6.2

Conditional Transfers

Stipend for Primary Students

575

750

30.5

School feeding Programme

7

18

157.5

Transfer

Old Age Allowance

810

892

10

Honorarium for Insolvent Freedom Fighter

225

360

60

Allowances for the Insolvent Disable

94

103

10

Emergency Relief

Vulnerable Group Feeding (VGF)

1097

1536

40

Open Market sales (OMS)

1072

1190

11

Total Safety Net

16,706

22,556.05

35.01

Source: Bangladesh Economic Review (2012), Ministry of Finance, Bangladesh.

Every year the Government increases the allocation. For example, the Bangladesh government spent around USD 366 million, 7 % of its annual budget and 0.9% of real GDP, in 1995-96 (World Bank, 2006) which increased to USD 2.65 billion (22,556.05 corer Tk), 18% of its annual budget and 2.5% of real GDP, in 2011-12 (Table-2).

Efforts towards widening the SSNPs in recent years are palpable in Bangladesh. In FY 2010-11, 8 new programmes were introduced under safety net programmes. Budgetary allocations for SSNPs as a share of total budget increased from 8.4% in FY 2006-07 to 14.8% in FY2010-11.[14] The Sixth Five Year Plan (SFYP) document has proposed to increase public expenditure on SSNPs to 3% of GDP in FY 2014-15.

Even with the recent economic rise, Bangladesh seems to be spending far less than other regions.[15] World Bank (2006) showed that, on an average, South Asian economies spent 5 % of GDP in SSNPs whereas the expenditure of East Asia and Pacific was about 8 % of GDP. Developed countries spend a larger share of their GDP on safety nets than do developing countries. For example, the European Union spends about 19 percent of their GDP on safety nets, while the United States spends about 9 percent of GDP (Ahamed et al, 2010: 10).[16]  Now, let us discuss the major SSNPs in Bangladesh. It will help us to understand the political economy of SSNPs.

Vulnerable Group Feeding (VGF)

These programs are designed as a mechanism for mitigating the consequences of disasters like floods, cyclones, and other natural calamities. This is the first SSNP of Bangladesh, which was introduced by World Food Progrmme (WFP) during the famine in 1974. Now, the Government of Bangladesh (GoB) and WFP are jointly operating the program. It supplies only rice to the poorest households and covers all regions of Bangladesh with the highest number of beneficiary households compared to other programs. Community or local leaders select eligible households for this program. So there is an option to politically dominant the programmes. Every selected household receives one VGF card to get benefits continuously after selection. 10-kilo grams (kg) rice per month is provided for each card without any condition. When any disaster hits in any area, the program distributes VGF card immediately to the affected households for minimum three months. It’s an unconditional transfer progrmme. The Government has increased the allocation to Tk. 1536 crore in FY 2011-12 from Tk. 1097crore in FY 2010-11 against this programme (Table-2). The Ministry of Food and Disaster Management has allocated 4,25,000 metric tones of food grains against in FY 2010 (Bangladesh Economic Review, 2010: 203). VGF is a continuous program where cardholders receive rice every month until their eligibility is expired.

Test Relief (TR) and Gratuitous Relief (GR)

Test Relief is a food transfer programme, aimed at creating employment for the poor in the rainy season, though a labor requirement is considerably lighter than any other employment generation programme. Under this programme, a beneficiary gets 3.5 kg of food grains per day for a maximum of 30 days. It is an irregular program, which creates temporary employment in rural areas for poor people through repairing roads, bridges etc. Local government selects the eligible. The budget allocation for this programme in FY 2011-12 was Tk. 954 crore (Table-2). On the other hand, Gratuitous Relief (GR) is a transitory program. It is intended to provide emergency relief to households affected by natural disasters such as flood, cyclone. The government started it during the flood in 1998 when 51,200 metric tons of rice was distributed to flood victims. The average amount of rice received by per flood-affected household was around 15 kg.

Open Market Sale (OMS)

The current Open Market Sale (OMS) program is a significant spread out of the government’s existing safety net programs. The allocation has increased to Tk. 1190 crore in FY 2011-12 from Tk. 1072 crore in FY 2010-11 against this programme (Table-2). The program has three purposes: to enhance the purchasing power of the vulnerable group, to stabilize the market price of the food crops and to minimize the political demonstrations originated from skyrocketing inflation.[17] The OMS targets the geographical pockets, which are very vulnerable and at the same time potential too. The program covered the vulnerable that are unemployed, ultra poor and potential industry workers.

Vulnerable Group Development (VGD)

Vulnerable Group Development (VGD) programme is a job-generating scheme, which provides employment opportunities for the women.[18] The Programme was introduced in 1975 with food aid from the World Food Programme (WFP) to protect women who had lost traditional sources of male protection during the liberation war in 1971 (Morshed, 2009: p 5).  Without any condition, this program provides loan and training in addition to food to the woman. Local government officials select the VGD Programme beneficiaries and 80 to 90 percent of them are then selected by BRAC, a national NGO. Those selected for the VGD programme get special training and micro-credit from BRAC. Each beneficiary receives 30 kg wheat per month (Morshed, 2009: 5-6). Under this programme, a total of 7,50,000 distressed and ultra-poor women have been receiving food assistance and training.

100-Day Employment Scheme

100-day Employment Generation Programme (EGP) was launched in 2008 for the poorest and jobless. This is one of the newest additions to the list of the SSNPs that aim at employment generation in the lean period. It supports incomes of the poorest segment of communities.[19] In 2008, a total of two million hardcore poor were to gain this opportunity to work.

Food for Work (FFW)

Food-for-work (FFW) distributes food grains (rice and wheat) as wage payment to both male and female workers in labor-intensive infrastructure building programs (GOB, 2005). Under the Ministry of Food and Disaster Management, the allotment of food grain for this programme was 3,71,000 metric tones in FY 2011-12, worth of Tk. 994 crore (Table-2). Operated by the government, this program generates 100 days employment in the lean season for hard core poor through construction and reconstruction of rural infrastructure. [20] Each year it generates, on average, over 100 million workdays of employment in earthworks, directly benefiting around 4 million people (Barkat-e-Khuda, 2011: 94). Here, both food and money are given to the recipient.

Rural Maintenance Program (RMP)

This program started in 1983 by CARE (Hossain and Akash, 1993). It provides employment opportunities for the rural disadvantaged women through regular maintenance of rural infrastructure. [21]As per contract, women have to work 6 days a week for 6 hours a day at lower than the local minimum wage.

Honorarium Programme for Freedom Fighters

The goal of this programme is to improve the standard of living of freedom fighters. The government designs this program for households whose members participated at the liberation war in 1971. Every successive regime has changed the list of freedom fighters. Political parties created a new freedom fighters group in order to fix a supporter group. [22]  However, this programme is having pronounced positive impact on poverty reduction among the freedom fighters. In 2008- 09, 1,25,000 households each received 900 Taka (about US $13) per month under this program.  In FY 2011-12, 1.5 lac insolvent freedom fighters were provided with a monthly grant Tk. 2,000 and out of the total allocation of Tk. 360 crore (Table-2).

Allowance for Poor Lactating Mothers

The main purpose of this programme is to reduce child mortality rate and to encourage mothers in breast-feeding. By this scheme, 80000 women are getting Tk. 350 per month starting from the third month after conception for the duration of two years in order to improve their nutrition levels. This programme, introduced in 2007/08, now plans to cover 60,000 women from 3 thousand unions, or 20 mothers from each union. It is a rhetoric programme considering very little coverage.

Maternity Allowance for Poor Women

This programme was designed in 2007 and is being implemented to reduce the maternal and infant mortality rate with special focus on breast-feeding. An amount of Tk. 42.5 crore has been sanctioned among 10,200 poor pregnant women in FY 2011-12 (Bangladesh Economic Review, 2012: p 192). This programme is also too little funded to ensure mother health.

The Political Aspects of Social Safety Nets (I have added many new sub title and observations here. For example, Nexus of Politics and Bureaucracy, Corruption and Political Patronage, Irrational Resource Transfer System etc.)

Many recent SSNPs in Bangladesh have been invented with political motives, including generating a ‘vote bank’, and building support more broadly for a programme of economic adjustment. In Bangladesh, SSNPs do not introduce in purely economic context. They have some political as well as social objectives. They may seek, for example, to compensate those negatively affected by a programme of economic adjustment, in order to lessen the opposition of this group to the adjustment programme, or to the regime. The main political aspects of SSNPs discussed as below:

Politics of Poverty

Poverty remains a vital challenge for Bangladesh. Though the largest statuary of the world has made significant improvement in poverty alleviation, the overall incidence of poverty remains unacceptably high with 31.5 percent of the population below the poverty line.[23] Although the headcount rate has declined, the actual number of poor has remained roughly the same during the nineties, around 63 million people. SSNP cannot resist this trend. In a report World Bank (2006: 1) says-

Poverty remains pervasive in Bangladesh. Half the population is identified as poor. While urban poverty rates are lower, they remain substantial – over a third of those living in urban areas are poor. The poor and other groups are also vulnerable (in terms of variance in income or loss of human capital) as a result of life cycle events (e.g., seasonal employment, age) and/or more aggregate/climactic shocks affecting a community (e.g., floods). Even if Bangladesh, through a combination of sound macro-economic policies, institutional reforms, and good governance, achieves the MDG goal of halving the 1990 poverty rate by 2015, the extent of poverty/vulnerability would still be significant and, in absolute terms, the numbers would remain high.’

The SSNPs are operating aim to enhance the capacity of households to cope with risks, rather than remove of threat of vulnerability. Most existing programs limit themselves to sustaining people’s standard of living above a given threshold. Roughly two-fifth of our population appears to be poor in the logic that the resources at their disposal do not meet their basic needs. Numbers of poor today are more than the total population in 1947. Due to real political commitment the elected government could not reduce the volume of poor.

Strategic Failure

There are serious gaps in program coverage, with some of the most vulnerable groups not being assisted at all or being insufficiently covered (such as the urban poor, the elderly, and children). But most of these groups (e.g. the slum inhabitants) are poor and hapless. They need the help more. SSNPs are mainly targeted towards the rural populace and coverage in urban areas remains low. This can be justified because there are approximately 5 times as many poor who reside in rural areas in comparison to urban areas. Furthermore, and natural disasters, a major trigger for some SSNPs, affect rural areas mostly. However, given the rapid expansion of urban populations and the inadequacy of services provided to these residents, significant urban social problems are emerged. Workless, natural climatic victims, street sex workers, low paying labor are living in slum. Without the help of state how will these destitute people survive? But still they are untouched due to policy failure.

There are currently around 98 safety net programs operated by the Government. The 2005 HIES data suggests that, though the percentage of beneficiary households decreases gradually for the highest quintiles, 40 percent of beneficiary households belong to the top three quintiles (World Bank, 2008). This inclusion error, in rotate; diminish the resources to support the poorest and most food insecure households in the lowest two quintiles. To indicate the strategic fault, a critic says-

‘Most safety net programs in Bangladesh address economic vulnerability but pay little attention demographic vulnerability. The demographically vulnerable—including children, the elderly, and those who are severely disabled or chronically ill—are not able to perform the intense physical labor involved in cash- or food-based public works programs. They need more than a short-term safety net; rather, a broader social protection system is required for them (Ahamed et al., 2010: 10).’

Moreover, nearly 2 million young men and women join the ranks of the labor force every year with a large majority of them facing livelihood uncertainty. Theses labor forces are not covered by the existing SSNPs.

Stumpy Coverage of Safety Nets

A large number of people are still not getting the benefits of the social safety net programmes due to the presence of targeting errors, corruption, weak monitoring and faulty selection criteria. The safety net programs cover only a fraction of the poor.[24] Over the last three years, as much as one-sixth of the Government’s budget has been allocated to safety nets, involving a range of innovative approaches. While these efforts should be applauded, the coverage of programmes remains inadequate compared to needs. About 36 million poor and hungry people are currently excluded from safety nets. Many programs are short lived and may end implementation before achieving impact.  A study on 9 major safety net programmes done by the HIES (2005) found that only 13.5% of all households received benefits. But recent data reveled that 25-30% of the poor had in safety net coverage (HIES, 2010). That means, of course 75-70 % of the poor are still outside the safety net.[25]

Nexus of Politics and Bureaucracy

In Bangladesh, three institutions are involved in the implementation of SSNPs: political government, community leader and bureaucracy.[26] The political government is responsible for final decisions on most aspects. Community leaders are engaged in different stages of project selection and implementation at the village level. Obviously, central and local bureaucracies have played the key role in connecting local and central levels. This complex process makes a noxious of vote politics and embezzlement, where political and community leader gets vote and bureaucrat gets bribe. Bangladesh does not have a robust identification method on which to base targeting for social safety net programs. Programs then rely on different methods or combination of methods for identifying potential beneficiaries (means testing, geographical, community or self-targeting). The complexity of identification process also induces this nexus.

Little Fund and Geographical Miss-distribution

The funds provided by the SSNs are small. Though the Government of Bangladesh (GoB), Non Governmental Organizations (NGOs) and official development partners are investing in SSNPs. It is now account for 2.5% of GDP (FY 2009-10) and reach 11.6 percent of the population and 30 percent of the poor and food insecure.

There is a substantial regional and social variations in poverty exist in Bangladesh. Districts of over and under-achievers for various poverty and social indicators do not necessarily coincide with each other. Some of the districts have achieved more compared to the others for some indicators, while the others have achieved more for other indicators.[27] So Bangladesh needs special SSNPs for different region. As Sen and Ali (2009: 71) says-

‘The South-Western and North-Western districts which were historically lagging behind have done better during this period, while the Nother- Eastern and South-Western districts could do more in accelerating the pace of social development compared to the predicted level implied by their level of average affluence. Market integration facilitated by the construction of the Jamuna bridge, the peace process in the Chittagong Hill Tracts, and, perhaps, fairly intense political competition for public allocations for social and physical infrastructures may have contributed to declining spatial inequality’.

Geographical allocations of resources do not seem to match poverty rates. For example, Khulna has the second highest poverty rate (45.7%) after Rajshahi, but gets the lowest SSN coverage (World Bank, 2008).

Corruption and Political Patronage

Due to corruption and administrative control, SSNPs often fail to reach the poorest.[28] In a report, Asian Human Rights Commission (AHRC) revealed that some of the beneficiaries receiving food or cash subsidies had to pay bribes directly or indirectly to the public representatives of the Union Council. Corruption is hampering the process of selecting real beneficiaries. Local political leaders, influential individuals and even NGOs are alleged to be influencing the beneficiary selection process, leaving the actual candidates. Moreover, in countryside many of the inhabitants try to arrest public funds through political patronage. The local elites (patron) who have the hold on these public resources also try to satisfy their clients through these repayments. So there are strong correlation between political links and getting the benefit of Social Safety Net in Bangladesh. There is so much corruption in this process that allocated resources hardly find the proper people. These programmes ultimately have become the tool for political exploitation. In rural areas, selling votes in UP election and buying safety net allocation cards from those elected people look like a business. This business is profitable for both the parties; but in between, the extreme poor people- the targeted ones for these programmes are deprived, as the card buyers are not the exact target people.

In a third world country like Bangladesh, where assets are inadequate, one of the important sources of patronage distribution is a different State financed scheme. The politicians bearing powerful positions in government in majority cases might want to distribute patronage to their supporters and also to their relatives through these safety net programmes.

Error of Identification

An indicator used in the targeting process is not reflecting the true welfare of households (Sen and Begum, 2010). The targeting errors of exclusion and inclusion are large.[29] The most disturbing fact is that the majority of rural households—poor and non-poor—meet the official selection criteria for programs. These criteria, therefore, provide the scope for local leader exercising perverse discretion in the beneficiary selection process.

For example, while literacy and land tenure are relevant to analyze poverty in rural Bangladesh, they are not very useful to identify the extreme poor. Even if the design of the targeting mechanism is sound, political attachment and implementation issues at the local level dominate the programs (Iffath, 2009). The local authorities select most of the recipients. It makes the process prone to elite capture, nepotism and political interference (Mannan, 2010). Indeed, the World Bank (2008) estimates that 41% of targeted programme beneficiaries are non-poor. It is happened only for political influence.

Over Lapping and Leakage

Various ministries provide social protection independently without any inter-ministerial coordination. This also results in high administrative expenses when they are pooled together. At least 30 known programmes, raise concern that these programs are not considering an administratively viable social safety net mechanism since it is difficult to determine the accountability and responsibility of the implementing agencies. Due to lack of political vision, social safety net provision in Bangladesh has often been reactive, with new programs initially implemented in an ad hoc, fragmented, manner. As a result, programs often lack strategic planning and a clear institutional structure. This can turn into a significant problem as programs breed in size and scope, and as new programs are implemented which can overlap with existing administrative structures. This lack of coordination poses a risk for program effectiveness.

As with nearly all safety net programmes around the world, leakages and targeting errors are known to be significant in Bangladesh. Leakages in the FFW program have been estimated to be 26% (World Bank, 2003).[30]A governmental report (GoB, 2004) also illustrates that a large part (about 20-40%) of the budgetary allocations for the Female Secondary Stipend Program do not reach the beneficiaries and are perhaps appropriated by the schools and other intermediaries.

Irrational Resource Transfer System

The cost of delivering cash is cheaper than the cost of delivering food to the beneficiary. A recent study (Ahmed et al., 2007) finds that the cost of delivering Taka 1.00 worth of food is, on an average, Taka 0.20. The cost of delivering Taka 1.00 in cash benefit, however, is virtually zero. The HIES 2005 survey found that beneficiaries prefer cash to kind. About 75% of total beneficiaries from all groups and 68% of the bottom quintile prefer cash to kind.[31]

On the other hand, allocation of subsidy is spending disproportionately, as it is benefiting the society’s well offs more. [32] For instance, subsidy to the power sector takes up most of the allocation, and the high-income group, with their heavy consumption of gadgets, stands to gain the most.

Politicization of SSNPs

Bangladesh, right from its independence, has eyes glued on poverty alleviation and decrease of inequality and injustice. Pro-poor growth has been the expressed agenda of all political regimes. In this perspective SSNPs are an effective tools. But the politicization of the SSNPs is a concerned issue. No government could escape from this trend. Politics increasingly matters in SSN programs. In the context of pervasive politicization even in rural areas, politicians to carry favour with their political clients, as opposed to helping the poor, often use these socials protection programmes. They become subject to political capture (Morshed, 2009: p. 15). On the other hand, during the last two decades, the government has been pursuing a number of SSNPs. But most of them are too little funded to poverty alleviation. According to Rahman and Chowdhury (20012, P.25), 97% of annual allocations are spent through 30 major programmes (in excess of Taka 50 crores). There are also 22 minor programmes (less than Taka 50 crores). The 10 top programmes, accounting for 80.5% of total SSNP allocations for 2010-11 (Rahman and Chowdhury, 20012). That means government has no real commitment to run most of the SSNPs. The political government just increase the ‘number of SSNPs’ to attract voter and development researcher. Though these programs have little influence to poverty alleviation and human development.

Conclusion

Bangladesh has a wide range of social safety net programs targeting almost all segments of the society who are at risk. But the transfers are often too small, and programme coverage too low, to have any noticeable effect on overall poverty. The expansion of the SSNPs is a direct outcome of the recent democratic form of government in Bangladesh. The government has been reflecting on the political economy of the country for two decades where the issue for poverty alleviation received special attention. However, with a budget of 2.5% of GDP these programmes are highly inadequate in terms of satisfactory coverage. These programmes are also inflexible in terms of political commitment, unable to absorb all segments of poor, and characterized by corruption and nepotism.

Why government is keeping on its SSNPs? Answer can be two. Firstly, government is very much concerned about poor people of the country; secondly, government is anxious with its next election. If the first answer would be right then government must focus on long term development of the poor such as employment generation but they don’t do so. Obviously their main objective is to win the next election. They are just trying to buy votes with row money and manipulate the exact condition of the country. No doubt, SNPs have a political economy and it is very malicious, that create options to indulge in corruption. To avoid the corrupt practices of the social safety net programmes, the policy-makers should form a commission in an effort. Beside high-level political commitment a multi-pronged approach is needed to address the issue. The policy makers have to introduce periodic evaluation of programmes to throw light on what is working and what is not. The government should also increase its allocation to SSNPs from around 2 per cent of its GDP (compared to about 5 per cent for South Asia) to around 6 per cent (World Bank, 2006). For this, the policy makers can allocate additional resources. Government may consider cutting down the budget of non-or less productive activities (e.g military budget, rhetoric programmes). As we discussed, most of the safety net programmes have duplication and triplication problems due to an absence of proper coordination. To address these problems, government needs to establish a comprehensive database, minimizing the number and improving the accountability of intermediaries who are involved in administering Safety Net programmes.

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*     Assistant Professor, Department of Political Science, Jagannnath University, Dhaka.

[1]     In the context of agriculture, SSNPs might also alleviate liquidity constraints for smallholders, boost demands for farm products, foster income-generating strategies, and create multiplier effects throughout the local economy (Devereux et al., 2008).

[2]     Around 23 ministries now run 98 social safety net programmes. Ministry of Food and Disaster Management, Ministry of Women and Children Affairs, Ministry of Social Welfare, Ministry of Chittagong Hill tracts Special Affairs, Ministry of Local Government, Ministry of Education, Ministry of Primary and Mass Education operate most of the SSNPs. See, The Daily Star, February 24, 2013.

[3]     Welfare’ or ‘Social protection’ had long been considered an issue of domestic concern in developed countries, where institutional measures emerged in order to protect populace against risk and provide assistance to the impoverished (Norton et al, 2000). But in developing world, social protection is a new term that expands from the concept of short-term safety net programs, and emphasizes a longer-term development approach, which includes social assistance and insurance. See, Lindert (2005).

[4]     Social safety nets include all kinds of cash and kind transfers to the poor, all welfare activities, unemployment benefits for retrenched workers, subsidized health care, shelters for the homeless, and pension benefits, which prevent individuals from falling into poverty.

[5]     SSNPs can help to achieve four common objectives: these have an immediate impact on poverty reduction, enable household to make better investment in future, help households to manage risk, and help governments to make beneficial reforms. See, Grosh, et al. (2008).

[6]     It includes: (i) ensuring macroeconomic stability to ensure pro-poor growth; (ii) improving governance for sustaining growth and poverty reduction; (iii) investing in human development to enhance human capabilities; and (iv) implementing social protection programs to reduce vulnerabilities and improve income-generating opportunities (World Bank, 2006: 1).

[7]     The traditional meaning of the term political economy is that branch of the art of government concerned with the systematic inquiry into the nature and causes of the wealth of nations. But now it is often used loosely to describe political aspects of economic policy-making. Since the seventeenth century the meaning of the term has fluctuated widely. See, Ouerghi (2005).

[8]     Moreover social protection is a Universal Human Rights. Article 22 of the Universal Declaration of Human Rights says- ‘Everyone as a member of society has the right to social security and is entitled to realization, through national effort and international cooperation and in accordance with the organization and resources of each state, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality’. See, http://www.un.org/en/documents/udhr/.

[9]     The preamble of our constitution clearly declared ‘it shall be a fundamental aim of the State to realise through the democratic process to socialist society, free from exploitation-a society in which the rule of law, fundamental human rights and freedom, equality and justice, political, economic and social, will be secured for all citizens’. See, The Constitution of Bangladesh, Government of the People’s Republic of Bangladesh.

[10]   Programmes under the safety net of Bangladesh can be classified into different categories considering different criteria. The latest PRSP document (2005) classified the initiatives into five categories: cash support programme, food aid programme, poverty reduction programme, self-employment through micro credit, and some specific programmes for poverty alleviation.

[11]   Cash transfer programs could be based on employment generation or a universal program that transfers some income to underprivileged households, which can be used to spend on basic requirements. It could be used for emergency purposes in periods of crisis or could be used as short or mid term poverty alleviation program. See, Tabor (2002).

[12]   The food based transfers come from the fact that Bangladesh has achieved food self-sufficiency. Food grain production has been increased three times from 10 million ton to 35 million ton. Thus surplus food is used for helping rural and urban poor to attain a certain basic level of food consumption.

[13]   Within the subsidy programmes, 24.7 per cent is provided as food subsidy while the rest are provided as electricity and fuel subsidy. The allocation for subsidy has been kept at Tk 34,533 crore for fiscal 2012-13, a 14.5 percent rise from the previous year’s Tk 30,154 crore. It is 18 percent of the total budget of the FY 2012-13 outlay. See, Bangladesh Economic Review (2012) and The Daily Star, June 10, 2012.

[14]   As a share of GDP, allocation for SSNPs also doubled in the last five years, reaching 2.5% in FY2010-11 compared to FY2006-07 (Ahmed et al, 2010). Moreover, allocation of outlay was augmented 35 percent in FY 2011-12 compared to previous fiscal year (Table-2).

[15]   Bangladesh is normally in the news only for floods, poverty and corruption but the latest figures released by the World Bank (WB) show the country has grounds to be optimistic. It said that the development of Bangladesh is really outstanding but ‘unsettled issues’. Bangladesh has made some of the biggest gains in the basic condition of people’s lives ever seen anywhere. The country achieved a good economic growth rate of around 5 to 6.5 percent, in spite of continuous strikes and other political conflicts. Between 1990 and 2010, life expectancy rose by 10 years, from 59 to 69. Bangladeshis now have a life expectancy four years longer than Indians, despite the Indians being, on average, twice as rich. Infant mortality has more than halved, from 97 deaths per thousand live births in 1990 to 37 per thousand in 2010. Over the same period child mortality fell by two-thirds and maternal mortality fell by three-quarters. See, The Economist, November 23, 2012.

[16]   On the whole, South Asia’s expenditure on social safety nets is among the lowest in the world. In 2004, India spent 4.3 percent of it GDP on safety nets; Bangladesh 1.6%; Sri Lanka, 3 % and Pakistan 1.8 %. But now Bangladesh spends overall 2.5 percent of its GDP to mitigate the demand of the SSNPs. See, Bangladesh Economic Review, 2012.

[17]   The OMS can be useful in a common sense that in the wake of food inflation and economic slowdown it would be beneficial to the poor. It started in 2008 when the cost of food in Bangladesh began to rise vertically as a result of global price hike as well as devastating cyclones of Sidar.

[18]   It is also known as ‘Income Generation for Vulnerable Group Development (IGVGD) Programme’. The Ministry of Women and Children Affairs is implementing this programme.

[19]   Though the whole country has to be covered, priority might be given to river erosion and flood-affected, monga prone, haor and char areas.

[20]   This program is targeted to poor individual, not household. Therefore, more than one member from a household can get benefits. The local government selects eligible persons.

[21]   Local government selects eligible women and makes a contract with them for four years.

[22]   Governments between 1987 and 2002 prepared five lists of freedom fighters, but all were drawn up on the basis of political bias and are thus incomplete. The number of freedom fighters on the first list made in 1987 during the rule of HM Ershad was 69,000. The number shot up to 1.8 lakh in 1988, only to slide to 83,000 in 1994. In 1999, during the Awami League period of government, the count rose to 1.54 lakh. It rose at 1.98 lakh, in 2002. See, The Daily Star, 16 December 2011.

 

[23]   Incidence of absolute poverty (less than 2122 kcal intake per day) has declined from 55.7 percent in 1985-86 to 40.4 percent in 2005. Due to population growth, the number of absolute vulnerable people is almost same in 2010. See, The Bangladesh Economic Review, 2012.

[24]   For example, the food benefit from Vulnerable Group Feeding (VGF) is just 21% of the lower poverty line (World Bank, 2008). In a report The Asian Human Rights Commission (AHRC) has also reveled the stumpy coverage of SSNPs. It says ‘there are 4,037 villagers living in Ghorabandha village. Seventy out of 203 elderly persons receive the old age allowance whereas only 15 out of 92 widows receive the widow’s allowance.’ See, http://www.ahrchk.net/ua/mainfile.php/2010/3437/, Retrieved April 24, 2013.

 

[25]   The HIES (2005) survey also reveled that only 22% of households in the bottom quintiles had been covered by targeted programs. If miss targeting and leakages are accounted for, the actual coverage may be only about 6-7 percent of the poor.

[26]   The local government directly handles many of the safety net programmes where UP chairmen and members have been elected. There is a nexus of corruption. Vulnerable Group Development (VGD), Vulnerable Group Feeding (VGF), Food For Work (FFW), Test Relief (TR), Gratuitous Relief (GR), Allowance for Poor Lactating Mothers, Rural Maintenance Program (RMP), etc are controlled by local government, where political elites play a significant role. See, Financial Express, February 20, 2013.

[27]   The indicators are total fertility rate, child mortality, severe child malnutrition, net enrolment rate at primary level and access to sanitation.

[28]   Corruption commonly involves manipulation of beneficiary rosters; for example, registering disqualified beneficiaries to garner political support, staff accepting illicit payments from eligible or ineligible beneficiaries, or diversion of funds to ghost beneficiaries or other illegal channels. It may also occur when a claimant deliberately makes a false statement or conceals or distorts relevant information regarding program eligibility or level of benefits.

[29]   Error is an unintentional violation of program or benefit rules that result in the wrong benefit amount being paid or in payment to an ineligible applicant.

[30]   Ahmed (2005) shows also fairly high levels of leakage from the VGD and VGF programme.

[31]   In spite of dispute, Food Security and Disaster Assistance Programmes get the highest allocation (44.3%) of SSNPs. One-fourth of the SSNPs budget was allocated to employment generating programmes while allocations for allowances programmes were 16.2%. Programmes focused on human development and social empowerment received 15.3% (Rahman and Choudhury, 20012:  25).

[32]   In line with the income distribution patterns, more than 52 per cent of it goes to the top 20 per cent of the population, while the bottom 20 per cent, only receives 12 per cent of it. See, The Daily Star, June 21, 2012.

 

2 thoughts on “Political Economy of Social Safety Nets in Bangladesh”

  1. I liked your article. I need to know whether it is published in any Journal? Would you pls give the name for Harvard Referencing. I am a student in Australia.

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