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  5. Social Protection in Low and Middle Income Countries
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Social Protection in Low and Middle Income Countries

Paper Session

Saturday, Jan. 4, 2025 2:30 PM - 4:30 PM (PST)

Hilton San Francisco Union Square, Franciscan D
Hosted By: American Economic Association
  • Chair: Rema Hanna, Harvard University

Financial Spillover Effects from Electronic Government Transfers: Evidence from an At-Scale Experiment in Indonesia

Abhijit Banerjee
,
Massachusetts Institute of Technology
Rema Hanna
,
Harvard University
Elan Satriawan
,
National Team for the Acceleration of Poverty Reduction and Gadjah Mada University
Sudarno Sumarto
,
National Team for the Acceleration of Poverty Reduction and SMERU Research Institute

Abstract

Does introducing electronic vouchers in government food assistance affect financial inclusion and business development? The Government of Indonesia randomized across 105 districts the transition from in-kind transfers to approximately equivalent electronic vouchers redeemable at a network of private agents. Examining areas with no agents at baseline, we find very large increases in the number of agents:  the treatment increased the total number of bank agents in a village by 68 percent relative to the control group. Despite this, we find no observable impacts on savings accounts, although households are more likely to use vouchers to receive other government programs as well. We find very small increases of the types of business that households use their vouchers at to claim their transfer, but no effect on other types of businesses.

Access to Justice and Social Protection

Diogo Britto
,
University of Milan-Bicocca
François Gerard
,
University College London
Lorenzo Germinetti
,
Queen Mary University of London
Joana Naritomi
,
London School of Economics
Breno Sampaio
,
Federal University of Pernambuco

Abstract

Various forms of social protection are increasingly becoming part of government roles across developing countries. The effectiveness of these policies in benefiting the population hinges on their proper implementation. This paper examines the role of the justice system in Brazil in enforcing access to social protection benefits, utilizing a comprehensive dataset of civil and labor court cases. We explore how access to the judicial system can assist citizens in securing these benefits, particularly in cases where third parties, such as employers in the context of job displacement insurance policies, are responsible for providing them. We discuss the relevance of access to justice for social protection within the setting of an upper-middle-income country and examine how unequal access to justice can impact targeting of social protection programs.

Heterogeneity in Effects of Unconditional Transfers

Robert James Garlick
,
Duke University
Kate Orkin
,
University of Oxford
John Walker
,
University of Oxford

Abstract

The debate over targeting methods for cash transfer programs—whether to prioritize recipient need or predicted recipient benefit—is gaining momentum. We study the effects of a large unconditional transfer on 1814 households in rural Kenya on economic outcomes. We collected data on a range of participant characteristics, including demographic and psychological characteristics. Using both conventional regression and principled, machine learning-based approaches, we find that cash transfers have significantly larger benefits for beneficiaries with higher initial cognition. We verify other findings that beneficiaries with higher asset wealth and existing enterprises also benefit more. No other psychological characteristics modify treatment effects. Simulation evidence indicates that implementing a targeting rule based on cognition has non-trivial economic benefits. These results raise normative questions. Machine-learning-based targeting rules are often opaque. Our results suggest they may make use of information about factors like cognition, which is largely determined in early childhood or by medical comorbidities. Our results highlight the complexity of the equity impact trade-off faced by policymakers.

Targeting Social Assistance: The Evolution of College Financial Aid in Colombia

Catherine Rodriguez
,
University of the Andes
Fabio Sanchez
,
University of the Andes
Luis Esteban Alvarez-Arango
,
National Planning Department of Colombia
Juliana Londoño-Vélez
,
University of California-Los Angeles and NBER

Abstract

Financial aid programs typically target individuals based on academic ability and socioeconomic status, with their design shaped by social preferences and the political economy of redistribution. This paper analyzes the evolution of Colombia's flagship college financial aid programs, Ser Pilo Paga and Generación E-Excelencia. It examines how the government initially designed these programs based on social objectives and available funds, then adjusted them in response to behavioral changes, political pressures, and competing priorities. Finally, it discusses the impact of these changes on equity and efficiency.

Discussant(s)
Francis Annan
,
University of California-Berkeley
Juliana Londoño-Vélez
,
University of California-Los Angeles
Manuela Angelucci
,
University of Texas-Austin
Susan Dynarski
,
Harvard University
JEL Classifications
  • H5 - National Government Expenditures and Related Policies
  • I2 - Education and Research Institutions