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The effects of social protection on economic development









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    Journal, magazine, bulletin
    Local economy impacts and cost-benefit analysis of social protection and agricultural interventions in Malawi 2019
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    Using rural economy-wide impact simulation methods and cost-benefit analysis, this study examines the impacts of individual and combined social protection and agricultural interventions in Malawi on incomes, poverty and production. The goal of this analysis is to provide evidence on policy options to increase coordination and coherence between social protection and agricultural programmes, with the objective of reducing poverty, increasing incomes and enhancing agricultural production and productivity. Impacts of interventions on targeted households can be estimated using experimental or quasi-experimental methods, but there are little rigorous evaluations available on the impacts of Malawi’s social protection and agricultural interventions. Therefore, to estimate the impacts of a range of policy options for standalone and combined interventions, the study uses micro-data from household surveys to model the production of targeted and non-targeted households in rural Malawi, as well as their impacts on poverty and inequality. Research shows that significant income gains in rural areas can extend beyond the direct beneficiary households, as a result of consumption and other local linkages. Given the income gained by these vulnerable households, and its multiplier effects in local economies, the result could be substantial benefits for ineligible households living in the local economy. It is quite possible that the impacts of these programmes on communities as a whole are larger than the direct impact originating from interventions directly targeted to the beneficiaries themselves. The analytical approach taken in this paper makes it possible to quantify the impacts of a range of social protection and agricultural interventions on households living in Malawi’s rural economy, which are usually missed by other types of (programme) evaluations. These economy-wide impacts are then used to undertake an economy-wide cost-benefit analysis of individual or combined interventions.
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    Brochure, flyer, fact-sheet
    Rural Social Protection - Promoting resilient livelihoods and the economic potential of the rural poor and vulnerable 2019
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    Three-quarters of the world’s poorest and most undernourished people live in rural areas. They are predominantly family farmers (including youth, fishers and foresters) with few to no assets, engaged in low-quality, low-paid labour, dependent on agriculture and natural resources for their livelihoods. They struggle to access social and financial services, infrastructure, markets or innovative technologies and practices, preventing advancement to more efficient, sustainable and productive livelihoods. They are particularly vulnerable to economic, climatic and conflict-related risks and shocks. Such shocks can have devastating impacts on income and livelihoods, and push people into negative coping strategies, such as the sale of productive assets, over-deforestation or cutting the quality of children’s diets, exacerbating the cycle of food insecurity and poverty. Women and girls face extra challenges due to gender-related inequalities. FAO is working to support governments and key stakeholders in expanding basic social-protection coverage to protect the world’s poorest and most marginalized. Access to social protection has not only been proven to keep people from hunger and extreme poverty, but can also enhance their livelihood options, most of which are agriculture-related.
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    Book (stand-alone)
    The role of social protection in inclusive structural transformation 2020
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    Structural transformation involves the reallocation of resources from less to more productive uses. It involves growth in agricultural productivity and generation of higher productivity jobs in other sectors. In addition, in the longer-term, it can support poverty reduction. However, the transition process and its outcomes are frequently challenging – especially among the poor and vulnerable people and households, given the economic and social forces that pressure them to adapt to realities faster than they are able to. The objective of the paper is to show how social protection policies and programmes can contribute to structural transformation, smoothen the transition for the poor and vulnerable and facilitate changes in their livelihoods such that they are able to actively participate in the process of structural transformation. Social protection interventions help households to engage in new economic activities generated by structural transformation, allow them to better manage the risks of such transitions and provide a safety net for those who are not adequately equipped to adapt to the changing circumstances rapidly enough. The paper draws from an extended review of the literature to assess how social protection influences human capital, labor mobility, reallocation of resources, productive capital and access to technology. The paper shows that the potential for major benefits from social protection in smoothening transitions and transforming the income generating activities and livelihoods of individuals and households is significant, the actual impact however is smaller than actually desired or expected.

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