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Social Funds and Poverty Reduction:
Making Social Funds Work for Poor People

15-16 October 2003, New York

Organized by the Division for Social Policy and Development

Venue:   UN Headquarters, New York
                Conference Room 8
Time:      09:30 - 18:00

Aide-Mémoire

Background

Social Funds were first implemented in Latin America in the wake of the financial crises at the start of the 1980s as a means to counteract the negative effects of the crises on the social sector and to mitigate the effects of structural adjustment policies. Although social funds continue to be used to respond to emergency situations such as natural disasters, economic crises or conflict, they have evolved from essentially a short term response to economic crisis to become one of the key long-term mechanisms to ensure development in the social sector and facilitate poverty reduction. Social Funds intervene in numerous different sectors including the social sectors (education, health, population, nutrition, AIDS) and community infrastructure (wells, rural roads, markets, upgrading schools, health clinics, etc.). Social Funds do not propose projects, rather they respond to those suggested by local groups and in turn aid in the implementation, monitoring and evaluation of these ‘bottom up’ projects.

The key advantages of Social Funds for alleviating poverty are their size, their flexibility and their relationship with local government. By focusing on infrastructure and employment, training and productive projects, Social Funds are intended to encourage a demand-driven, participatory approach to project selection. Social funds can target poor people by building social and economic capital, and delivering services and projects in a decentralized, cost effective structure. Some funds can also focus on specific marginalized groups and, by encouraging their input and participation in the project cycle, enable them to improve their livelihoods, contribute to their community and develop a permanent voice to influence their futures. This approach when applied correctly can promote a participatory environment that focuses on transparency and sustainability.

Ultimately, the role of social funds in poverty alleviation is based on their ability to reach those most in need. To do so successfully requires accurate poverty targeting techniques to disburse funds and a heightened degree of community mobilization to attract and contribute to projects. Specific targeting of poor areas can be achieved, for example, through regional surveys of the very poor and through partnerships with local NGOs and government sectors. Such strategies can direct financing to projects that have been selected by communities according to specific development criteria.

The World Bank is the largest proponent of Social Funds and considers them to be a key element of a comprehensive approach to poverty reduction. In this view, therefore, Social Funds may provide an instrument that can support and promote efforts at the national level to achieve the Millennium Development Goals (MDGs), in particular the goal to halve extreme poverty by 2015, because they conform to the participatory and decentralization approaches highlighted in the Millennium Declaration.

Yet, evaluations of the performance of Social Funds suggest that the overall effect of social funds on poverty alleviation, social protection and risk reduction is not as uniform or as effective as anticipated. In practice, efforts to reduce poverty need to address the multi-dimensionality of the problem, and social funds do not provide a universal solution to the plight of poor people.

Conceptually, Social Funds embody many of the attributes that make them a valuable ally in the war against poverty. The challenge is to ensure that Social Funds live up to their potential in terms of their contribution to sustainable economic and social development of poor people.

Objectives  

In light of the above, the objectives of this meeting are to assess and discuss the impact of social funds, particularly for poverty reduction, drawing upon the experience of the World Bank and other multilateral financial institutions. In this regard, the meeting will also discuss the role of targeting and institutional development to improve the performance of social funds.  In addition, the meeting will also draw upon a selection of national and regional experiences with social funds and the lessons learned in order to gain better insight into and understanding of how social funds can be improved to better contribute to the achievement of the poverty reduction goal of the Millennium Declaration.

In particular, the meeting will seek to:

• Review the performance of social funds and their contribution to poverty reduction and social development;

• Examine and exchange views on ways and means to improve the impact of social funds for the reduction of poverty, including lessons learned from regional and national experiences with a variety of social funds, and the use of poverty targeting;

• Examine and recommend policy options to national governments to enhance the benefits of social funds for poor people;

• Examine the role which the United Nations system, in particular, can play in these processes.
  
  
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Papers for the meeting

Department for Economic and Social Affairs, United Nations
Background Note

Mr. Andrew Batkin
Social Funds: History, Concept, Issues (powerpoint presentation in pdf)

Mr. Adama Diarra
National Solidarity Fund
Intervention Strategy of National Solidarity Fund
Proposed Event for the Organisation for the Launching of the World Solidarity Fund
Draft Document for the Establishment of a Network of Social Funds: A Partnership for South–South Solidarity
(powerpoint presentations in pdf)

Mr. Koulou Fané
Note

Professor Raghav Gaiha
Social Funds, Institutions and Rural Poor in India

Mr. Piet Goovaerts
Experiences with Social Investment Funds (powerpoint presentation in pdf)

Dr. Liliana Vasilescu
Romanian Social Development Fund – poverty alleviation through community development (powerpoint presentation in pdf)

Dr. Clarisa Hardy
Challenges of Social Politic in Latin America: Equity and Social Protection
(click here for powerpoint presentation in pdf)

Mr. Gagik Khachatryan
Note

Ms. Meri Koivusalo
Social funds, social policy and social development (powerpoint presentation in pdf)

Dr David Warren
How have Social Funds Performed? (powerpoint presentation in pdf)

Selected publications on social funds

Andrew Batkin
Social Funds: Theoretical Background in Social Protection in Asia and the Pacific, Isabel Ortiz (ed), Asian Development Bank, 2001 

Andrew Batkin
Social Funds: Project and Program Issues in Social Protection in Asia and the Pacific, Isabel Ortiz (ed), Asian Development Bank, 2001

Giovanni Andrea Cornia and Sanjay Reddy
The Impact of Adjustment-Related Social Funds on Income Distribution and Poverty Discussion Paper 2001/1, UNU/WIDER, 2001

Ruthanne Deutsch
Good Practices in Poverty Targeting in IDB Projects in 1997 mimeo, IADB, December 1998

Sameer Dossani
Sideswiping the State: Social Funds and the Future of Health, Education and Water Services, Citizens’ Network on Essential Services, Policy Series on Essential Services, Paper No. 3, 2002.

Philippe Garnier and Marc van Imschoot
Social Funds: Lessons for a New Future, ILO, Geneva, 2003 [no link]

Armando Godinez and Julie Van Domelen
Targeting Social Programs to the Poor, Working Paper 7, Ecuador Poverty Report, World Bank, November 1995 (Report No. 14533-EC)
 
Piet Goovaerts
Employment and Social Investment Funds in Central/Eastern Europe and the Commonwealth of Independent States (CEE/CIS), Socio-Economic Technical Paper No. 10, Employment-Intensive Branch, ILO, Geneva, 2001

Inter-American Development Bank (Poverty and Inequality Advisory Unit)
The Use of Social Investment Funds as an Instrument for Combating Poverty, Washington, D.C., (12/98, POV-104, E, S)

Sanjay Reddy
Social Funds in Developing Countries: Recent Experiences and Lessons UNICEF, New York, 1998 (very long document, 99 pp.) For main findings see Executive Summary (in English, Frrench and Spanish).

Mary Beth Schmidt
Review of the Integration of Social Funds with Poverty Reduction Strategy Papers and Country Assistance Strategies, Report to the World Bank Human Development Network, World Bank, May 2002.

Gabriel Siri
Employment and Social Investment Funds in Latin America, Socio-Economic Technical Paper No. 7, Employment-Intensive Branch, ILO, Geneva, 2000

Judith Tendler
Why are Social Funds so Popular? in Local Dynamics in an Era of Globalization: 21st Century Catalysts for Development, Simon J. Evenett , Weiping Wu , Shahid Yusuf (eds), Oxford University Press, World Bank, 2000

Judith Tendler and Rodrigo Serrano
The Rise of Social Funds:What Are they a Model of? mimeo, 1999.

World Bank
Social Funds and Reaching the Poor: Experiences and Future Directions, Anthony G. Bigio (ed) World Bank, 1998 (very long document, 222 pp.) For main outcomes see Chapter 1: Main Outcomes and Recommendations pp. 3-12.

World Bank
Social Funds. Assessing Effectiveness, World Bank, 2002. (Overview, 32 pp.)

List of participants

Invited Experts

Mr. Andrew Batkin, Social Funds Specialist/Consultant, United Kingdom

Mr. Mahamadou Cissé, Responsable Communication Fonds de Solidarité Nationale, Mali

Mr. Adama Diarra, Director National Solidarity Fund, Mali

Mr. Koulou Fané, Conseiller Technique Ministere du Developpement, Social de la Solidarité et des Personnes Agées, Mali

Ms. Laila Gad, Social Fund for Development, Egypt

Prof. Raghav Gaiha, Faculty of Management Studies, University of Delhi

Mr. Piet Goovaerts, Social Funds Specialist/Consultant, United States

Dr. Clarisa Hardy, Executive Director, Fundación Chile, Chile

Mr. Selim Jahan, UNDP, New York

Mr. Gagik Khachatryan, Resident Advisor, CDD Project Implementation Specialist, Kyrgyzstan Village Investment Project

Ms. Meri Koivusalo, STAKES, Finland

Prof. Sanjay Reddy, Department of Economics, Barnard College, New York

Ms. Alwata Ichata Sahi, Représentante Afrique de l'ouest de l'Organisation Panafricaine
des Femmes, Mali

Mr. Gabriel  Siri, Social Funds Specialist/Consultant, El Salvador

Dr. Mario Torres, Social Funds Expert/Consultant, Canada

Dr. Liliana Vasilescu, Executive Director, Romanian Social Development Fund (RSDF)

Dr. David Warren, Senior Social Protection Specialist, Human Development Network, The World Bank


United Nations Secretariat

Mr. Johan Schölvinck, Ms. Gloria Kan, Mr. Donald Lee, Ms. Sarangerel Erdembileg, Ms. Felice Llamas, Ms. Nimali S. Ariyawansa [DESA, New York]

Observers

Links

The World Bank and Social Funds
World Bank and Social Capital for Development
Red Social (Network of social funds in Latin America and the Carbbean)

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Poverty Eradication and Employment Section, Division for Social Policy and Development, Department of Economic and Social Affairs, United Nations, DC2-1358, Two United Nations Plaza, New York, NY 10017, USA

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Telephone: (212) 963.8762, Fax:(212) 963.0111


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Last updated: 07 March, 2005 04:54:00 PM