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It has been a very exciting year for social protection! In 2019, my weekly social protection links newsletter reviewed 1042 materials in 43 editions. So here is a personal selection of papers articulated around 10 major themes. Enjoy!

1. Economic and other long-term effects

Daidone et al have a great article summarizing and explaining the economic effects of cash transfers in 7 African countries. Egger et al add another precious data point on the multiplier effects of cash transfers (I counted 12 such points for the moment): in Kenya, every $ injected generates $2.6 in the local economy.

Blattman et al show that after 5 years, a one-off cash grants in Ethiopia has fading effects. Similarly, in Malawi Baird et al estimate that the impact on reduced fertility of an unconditional cash transfers on adolescent girls rapidly vanished.

In Mexico, after 20 years of operations cash transfers ex-beneficiaries showed higher ownership of durable assets (Aguilar et al); 49.2% of them experienced upward mobility (Yaschine et al); they grew 2.8-4.1cm taller and have 5.3-5.7 more years of schooling than their parents (Gutierrez et al), with enrollment in secondary school increasing by 5-10 percentage points over grades 7-12 (Behrman et al). A 10-country review by Millan et al found that the evidence is strong on school completion, more mixed on learning, and limited on employment. Another paper by Millan et al estimate that 13 years after its inception, transfers in Honduras increased secondary education completion by 50%, but also rose the chance of migration by 3-7 percentage points.

2. Health, nutrition and education

Klein et al show that cash transfer participants in Buenos Aires showed higher success rates against tuberculosis (TB); yet Rudgard et al estimate that making transfers "TB-sensitive" would require an additional budget between $165M and $298M per country. Choko et al showed that in Malawi cash plus HIV self-test kits increased HIV anti-retroviral therapy compared to other solutions. Palermo et al find that in Ghana, combining cash and health measures increased enrolment in health insurance in the treatment group from an average of 37.4% to 46.6%.

In Ecuador, Moncayo et al show that a 1% increase in the coverage of cash transfers decreases mortality from malnutrition by about 3%. In Nigeria, Okeke and Abubakar estimate that cash reduced mortality of children in utero by at least 20%. Celhay et al found that cash increased the survival rates of birth cohorts exposed to the program by up to 14.7%. and Dow et al find that in the US, a 10% increase in the Earned Income Tax Credit or in the minimum wage reduces suicides between 3.6 and 5.5%.

In Ghana, Gelli et al found that the national school meals program improved stunting among children of 5-8 years (effect size: 0.12 standard deviations). Neufeld et al on the history of nutrition evidence on cash transfers in Mexico. And a paper by Evans and Yuan shows that girl-targeted versus general interventions in education seem to deliver similar gains, including featuring cash transfers both at the top and bottom among the most effective interventions.

3. Gender

Peterman et al summarize the impacts of safety nets on gender in Africa: safety nets perform well in reducing physical violence as well as improving psychological well-being, dietary diversity and savings. But changes in labor force participation are minimal. In terms of toolkits, FAO produced great guidelines on gender-sensitive cash transfers and public works.

A review of evidence on social assistance and intimate partner violence (IPV) by Hidrobo and Roy shows reductions in physical violence between 25-41% in Bangladesh, Ecuador, and Mali. Another brief by Heise summarizes results from 22 studies across 13 countries.

4. Crime

Tuttle shows that banning convicted drug felons from SNAP food stamps in the United States makes them more likely to return to jail. Sviatschi estimates that in Peru, cash transfers reduced drug production. And in Brazil, Machado et al find that Bolsa reduced homicide rate and hospitalizations due to violence by 8-25%.

5. Crises

Barca and Beazley estimate that it takes between 2 weeks to 14 months to scale up social protection in response to natural disasters. Bruck et al show that a new generation of 7 high-quality evaluations sheds light on social protection in fragile and displacement settings. Cherrier et al produced an excellent compendium on humanitarian-social protection linkages, while Seyfert et examine the trade-offs of integrating refugees into national safety nets.

6. Universality and targeting

A new book by Gentilini et al offers a framework to navigate the analytics, evidence and practices on universal basic income (UBI), while Banerjee et al discuss how UBI may address barriers like lack of credit, insurance or psychological factors among low-income people. Jolliffe et al show that SNAP, the American "floor for the poorest", has been sinking over the past 30 years.

ILO and UNICEF have an overview note on "universal" child grants present in 21 countries, while Kidd and Athias offer a critique of proxy means testing. In Indonesia, Tohari et al estimates that the poverty-based unified database of beneficiaries improved the chance of participating in 3 core programs by 117%, while Bah et al estimate that if all households were included in such database undercoverage would be reduced by one-third. Bonus: Ndiaye et al trace the evolution of the national social registry in Senegal.

7. Insurance and labor markets

Packard et al examines how social protection could be adapted to the changing nature of work, while Jorgensen and Siegel unveil social risk management 2.0. Guven shows that in Africa only 10.6% of Africa's working-age population contributes to pension schemes. The ILO has a fascinating "living document" laying out a number of options disaggregated by occupation.

A review of minimum wages in high-income countries by Dube finds "… muted effect of minimum wages on employment, while significantly increasing the earnings of low paid workers". However, a new compilation of evidence on minimum wage in low and middle-income countries by Neumark and Corella finds that "… when minimum wages are binding and enforced, and when they apply to vulnerable workers, the disemployment effects are most apparent".

8. Tech and financial inclusion

Gelb and Mukherjee take stock of lessons from India's biometric ID (Aadhaar) in providing inclusive services; Masino and Nino-Zarazua show that transitioning to electronic cash payments in Mexico increased households' access to formal financial services. In South Africa, however, Torkelson documents abuses in using cash transfers as loan collateral by a financial company delivering cash itself.

9. Political economy

Hickey et al have an amazing open-access book on the political economy of cash transfers in Africa. Mosec and Mo found that in Pakistan those receiving BISP cash transfers increased support for their political leaders and institutions, while in typhoon-hit Fiji Rios et al show that people receiving cash transfers are up to 20% more likely to be very satisfied with the government than non-recipients. In Brazil and Turkey, Zucco et al show that conditional transfers are only marginally more popular than similar unconditional transfers. Ciminelli et al find that reforms generating large short-term adverse distributional effects are associated with electoral costs for politicians. In Mexico, Cantu documents that cash-vouchers to be used in local supermarkets were provided in exchange for electoral support.

10. Cash plus and cash versus….

In Bihar, Khemani et al asked whether people prefer cash or other services: only 13% chose cash instead of spending on public health and nutrition; in contrast, if cash came in lieu of improving roads, preference for cash rose to 35% (see counter views). In Mozambique, De Walque and Valente compare the effects of a conditional cash transfer program with the sole provision of information to parents on school attendance: information provision is as large as 75% of the effect of the CCT.

Two papers – one on Ghana by Banerjee et al and another on Uganda by Sedlmayr et al – points to the power of combining cash transfers with assets and complementary measures (as opposed to individual components). Also, Carneiro et al evaluate an integrated cash program for 3,600 mothers in Northern Nigeria: after 2-4 years, the program reduced stunting by 8%. Bonus: Bedoya et al show that a package of transfers and assets in Afghanistan increased consumption by 30% and poverty fell from 82 to 62%.

















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Ugo Gentilini
Global Lead for Social Assistance, World Bank
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The 10-year treasury yield reached an historic low this week, crossing the 1% barrier. For many observers, this was a troubling development that confirms the U.S. economy is being sucked into the mire of secular stagnation. For others, it was an unsurprising outcome given the long-run trajectory of interest rates and the ongoing safe asset shortage problem.
Both views have some merit. The decline of the 10-year treasury yield does create problems for the U.S. economy, but it has been happening for some time. There is nothing magical about crossing the 1% barrier, though it does brings closer the day of reckoning for the Fed's operating framework.


The decline of the 10-year treasury yield, if sustained, means the entire yield curve may soon run into its effective lower bound. This will render useless much of the Fed's toolbox. Fortunately, there is a fix for the Fed's operating framework that makes it robust to any interest rate environment. This fix, ironically, ties the Fed more closely to fiscal policy while making it more Monetarist in practice. 

This post outlines the proposed fix, but first motivates it by explaining how the decline in the 10-year treasury yield creates problems for the U.S. economy.

Why The 10-Year Treasury Yield Decline Matters 

The are three reasons why the fall in the 10-year treasury yield matters. First, it implies there is an excess demand for safe assets. These are securities that are expected to maintain their value in a financial crisis and, as a result, are highly liquid. The biggest sources of safe assets are government bonds from advanced economies, especially U.S. Treasuries. The global demand for them has far outstripped their supply and this has led to the global safe asset shortage problem. The 10-year treasury yield falling below 1% is the latest manifestation of this phenomenon.



The safe asset shortage is problematic because it amounts to a broad money demand shock that slows down aggregate demand growth. One solution is for safe asset prices (interest rates) to adjust up (down) to the point that safe asset demand is satiated. The effective lower bound (ELB) on interest rates prevents this adjustment from happening and causes investors to search for safe assets elsewhere in the world. Other economies, as a result, are also affected by the safe asset shortage problem and experience lower aggregate demand growth.1



The demand for safe assets, as noted above, is closely tied to the demand for liquidity. This can be seen in the figure below which shows that the use of money assets (i.e. money velocity) closely tracks the 10-year treasury yield. Over the past decade, this has meant the public's desired money holdings have increased as the 10-year treasury yield has fallen. All else equal, this implies slower growth in aggregate spending.






Below is a chart from an upcoming policy brief of mine that illustrates this point from a global perspective. It shows the average 10-year government bond yield between 2009 and 2019 plotted against the average growth rate of domestic demand over the same period. The government bond yield can be viewed as the safe asset interest rate in these advanced economies. The figure reveals a strong positive relationship between the safe asset yield and the domestic demand growth rate.









One has to be careful interpreting the causality here, but I do further analysis in the policy brief and find shocks to the bond yields do influence domestic demand growth. The safe asset shortage, therefore, appears to be a drag on global aggregate demand growth. The first reason, then, why the decline in the 10-year treasury yield matters is that it portends weaker aggregate demand growth. 



The second reason the decline matters is that it leads to a flattening of the yield curve. Financial firms that fund short term and invest long term rely heavily on a positive slopping yield curve to make this business model work. A flattening yield curve undermines it and may lead to less financial intermediation. This is one reason an inverted yield helps predict recessions. In this case, however, the  effect may be longer lasting than the business cycle as the decline in treasury yields appears to be on a sustained path.


The third reason the decline matters is that it impairs the Fed's current tool box. The Fed's target interest rate is now down to a 1-1.25% range, a small margin for a central bank that normally cuts around 5% during a recession. The Fed could turn to large scale asset purchases once it hits the ELB, but with the 10-year treasury now near 1%, there is not much space here either. Consequently, the Fed's toolbox is shrinking and soon could be rendered useless. 

Now the Fed can add to its toolbox and indeed the Fed is exploring new tools--such as negative interest rates and yield curve control--under its big review of monetary policy. Even these tools, however, are limited since the declining 10-year treasury yield is compressing the yield curve. 

The Fed's current toolbox, in short, is premised on a positive interest rate world that is slowing fading. The Fed, therefore, may soon face a day of reckoning for its current operating framework. That possibility and what the Fed could do in response is considered next.


Revamping the Fed's Operating Framework

The Fed's operating framework--defined here as the instruments, tools, and targets the Fed uses in its conduct of monetary policy--has been geared toward a positive interest rate environment. This framework has been increasingly strained by the downward march of interest rates. The 10-year treasury yield dropping below 1% underscores this challenge.

The Fed needs, consequently, an operating framework that is robust to any interest rate environment and one that is capable of stabilizing aggregate demand growth. I have proposed a fix to the Fed's operating system that addresses these challenges in a forthcoming journal article. Here I want to briefly outline that proposal. It has three parts: (1) the Fed adopts a dual reaction function, (2) the Fed adopts a NGDP level target, and (3) the Fed is empowered with a standing fiscal facility for use at the ZLB.  The three parts are explained below. 






Part I: A Dual Reaction Function. To make the Fed's operating framework robust to both positive and negative interest rate environments, I call for a two-rule approach to monetary policy. Specifically, the Fed would follow a version of the Taylor rule when interest rate are above zero percent and follow the McCallum rule when interest rate are at zero percent or below. The former rule uses an interest rate as the instrument of monetary policy while the latter rule uses the monetary base as the instrument.  Consequently, the Fed would have effective instruments to use no matter what happens to interest rates. 


Part II: A NGDP Level Target. A level target provides powerful forward guidance since it forces the central bank to make up for past misses in its target. For reasons laid out here, I prefer a nominal NGDP level target (NGDPLT) and specifically, one that targets the forecast. This combined with the first feature implies the following dual reaction function system for the Fed:









Here, in is the neutral interest rate, the NGDPGap is the percent difference between the forecasted level of NGDP and the NGDPLT for the period of t to t+h, Δb is the growth rate of the monetary base, Δx* is the target NGDP growth rate, and Δv is the expected growth rate in the velocity of the monetary base for the period of t to t+h.




Part III: A Standing Fiscal Facility. The final part of the proposal establishes a standing fiscal facility for the Federal Reserve to use when implementing the McCallum rule. That is, when the Fed starts adjusting the the growth of the monetary base according to the McCallum rule, it will do so by sending money directly to the public. My proposal, then, incorporates 'helicopter drops' into the Fed's toolkit in rule-like manner. 


I provide more details in the paper, but here are the advantages of this proposed operating framework. First, it keeps countercyclical macroeconomic policy at the Federal Reserve. This provides continuity with the existing division of labor between the U.S. Treasury Department and the Federal Reserve.  Second, it enables the Fed to provide meaningful countercyclical monetary policy no matter what happens to interest rates. Third, it provides credible forward guidance since it combines a NGDPLT with helicopter drops. Finally, since this operating framework would require the Fed to be much more intentional about the rules it follows, it would make the Fed more rules-based and predictable. 



This proposal would require approval from Congress. Given the Fed's shrinking toolbox and the ongoing expectation that it deliver countercyclical policy, this may not be as big an ask as some imagine. Moreover, it could easily be seen as return to a more Monetarist Federal Reserve since it would be relying more explicitly on the monetary base to implement monetary policy. 

Conclusion 
Some commentators have speculated that the corona virus might be a shock that forces us out of our complacency and spawns many unintended innovations. To the extent this shock leads to ongoing declines in the treasury yields and exhausts the Fed current toolbox, it might also lead to innovations in U.S. monetary policy. Here's hoping it does along the lines suggested above. 






1 The safe asset shortge can also become self-perpetuating and lead to what Caballero et al (2017) call a 'safety trap'. This problem emerges when the excess demand for safe assets pushes down safe asset yields to the effective lower bound (ELB) on interest rates. If the excess demand for safe assets is not satiated at that point (i.e. the equilibrium real safe asset interest rate is below the ELB), then aggregate demand will contract and push down inflation. Via the Fisher relationship, the lower inflation will drive up the real safe asset interest rate and increase the spread between it and the equilibrium real safe asset interest rate. As a result, aggregated demand will further contract and the cycle will repeat.  This is the safety trap.

Recently released data showed that 2014 was the hottest year since records began in 1880.
This update includes updated charts and graphs and animations that look into this further.
Read full article: Climate Change and Global Warming Introduction

[…] -Originally published on Africa at LSE. […]

19% of the world's reptiles are estimated to be threatened with extinction according to a study by the International Union for Conservation of Nature (IUCN) and the Zoological Society of London. Reptiles include snakes, lizards, crocodiles, turtles and tortoises. But some species are at more risk than others. For example, freshwater turtles alone are at a 50% risk of extinction. Reasons vary, but include the usual suspects such as climate change and loss of habitat.

A recent study also estimated that some 100 million sharks are being killed each year — an unsustainable rate, given how long some species take to mature and reproduce. Much of the demand is driven by Chinese rising affluence and demand for shark fin soup in the mistaken belief it has various health benefits.

This small update to the biodiversity loss page has further details.

Read full article: Loss of Biodiversity and Extinctions

Last year I was fortunate enough to take part in a masterclass for early career researchers on EU regional policy organised by the Regional Studies Association, the EU Committee of the Regions and the European Commission. The masterclass was part of the annual European Week of Regions and Cities, which last year it took place […]
The post Communicating EU regional policy and the EU referendum appeared first on Local perspectives on Europe.

THE ISSUE: In just over a year, the Russia investigation has resulted in 35 guilty pleas or indictments. With the investigation entering its second year, questions remain about whether a presidential pardon of former advisors like Michael Flynn or Paul Manafort would constitute obstruction of justice, and if those charges might lead to an impeachment. https://youtu.be/FpNDptGfHzM…

The UC Davis Department of Environmental Science and Policy seeks a post-doctoral fellow in Governance Network Analysis and Climate Adaptation under the mentorship of Dr. Mark Lubell.  The position will be for one year residence with possible second year renewal depending on funding. The position will begin in January 2020, or as soon as possible after that time. Salary ranges from $50,760 to $59,100 annually depending on experience.

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Around 21,000 children die every day around the world.

That is equivalent to:

1 child dying every 4 seconds14 children dying every minuteA 2011 Libya conflict-scale death toll every dayA 2010 Haiti earthquake occurring every 10 daysA 2004 Asian Tsunami occurring every 11 daysAn Iraq-scale death toll every 19–46 daysJust under 7.6 million children dying every yearSome 92 million children dying between 2000 and 2010

The silent killers are poverty, easily preventable diseases and illnesses, and other related causes.

Despite the scale of this daily/ongoing catastrophe, it rarely manages to achieve, much less sustain, prime-time, headline coverage.

This update includes updated numbers, charts and graphs. It shows that there is steady progress each year in reducing the number of children that die each year, but clearly the number is still high.

Read full article: Today, almost 21,000 children died around the world

If victors write history, and Bashar al-Assad is consolidating his grip on Syria after nearly a decade of civil war, is there any hope of justice for victims of state-sponsored abuse in Syria?

Russia and China have blocked efforts to set up an international tribunal for Syria, so Syrians in exile have been searching for ways to use national laws, and the principle of universal jurisidiction to pursue accountability.

Last year Germany arrested two Syrian men and charged them with committing crimes against humanity. When they go on trial this year, it will be the world's first prosecution for state-backed torture in Syria.
Activists have also filed cases in Norway, Sweden and Austria, and international groups are stockpiling evidence in the hope of future court cases.

But with the top members of Assad's government safely ensconced in Damascus, how much impact can these cases have?

About the speaker:

Emma Graham-Harrison is senior international affairs correspondent for the Guardian and Observer. She has covered conflicts, political crises, energy and the environment in more than 40 countries across five continents, and was based in China, Afghanistan and Spain for over a decade, before returning to London to take up her current roving role. She graduated from Oxford with a first class degree in Chinese Studies, and speaks Mandarin and Spanish. Awards include Foreign Reporter of the Year at the 2017 British Press Awards; her investigative work on the Cambridge Analytica investigations was also recognised at the British Press Awards and by the London Press Club.

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