|Briefs for Food, Agriculture, and the Environment - 2020 Vision : Brief 1 - 64 (IFPRI)|
Tesfaye Teklu is a research fellow in the Food Consumption and Nutrition Division of the International Food Policy Research Institute.
Employment programs, particularly labor-intensive public works (LIPW), have a long history in Sub-Saharan Africa, dating back to the 1960s. The programs expanded rapidly in the 1980s and early 1990s, especially in countries that experienced sharp declines in employment and real wages.
This rapid expansion of public works programs has mainly been driven by concern about the increasing problem of labor absorption, which worsened in the 1980s. The decline in real gross domestic product from an annual average of 5.9 percent in the 1960s and early 1970s to 2.1 percent in the 1980s contributed to a decline in the growth of employment from 2.6 percent in the 1970s to 0.5 percent in the 1980s. The decline in employment, combined with the rapid growth of the labor force, which averaged 2.4 percent a year in the 1980s, led to rising unemployment and underemployment and widespread poverty and food insecurity.
In addition to labor absorption, employment programs were also expected to protect the poor and vulnerable from policy- and weather-induced employment and income shortfalls. For example, public works programs were expanded to serve as drought-relief intervention in Botswana, Ethiopia, and Zimbabwe in the 1980s and early 1990s. Some of these programs were also integrated into structural adjustment to act as a social safety net.
AFRICAN EXPERIENCE IN THE 1980S
IFPRI survey data in several African countries show that these programs share a common set of objectives: (1) employment creation for unskilled labor, particularly in rural areas; (2) generation of income; and (3) creation of assets. However, the programs vary from country to country and even from place to place within countries in whether they emphasize asset creation or income transfer. In a crisis situation, the emphasis is on income transfer.
While the kinds of assets created vary, most of the programs fall into a few types of assets: rural road projects (Botswana, Kenya, Nigeria, and Tanzania), irrigation (Zimbabwe), or resource conservation and afforestation (the Sahel countries and Ethiopia). With some exceptions (such as urban projects in Mali, Niger, and Senegal), these projects are rural based.
Employment in most cases is open to all who are able to work. Initially, workers are usually selected through some form of administrative screening. When there is an excess supply of labor, different methods of quantitative rationing are applied (such as random selection through a lottery technique, quota setting by sex, or limit on number of participants per household). Recruitment and selection continue at work sites, particularly where there are high labor turnovers.
Wages are often set administratively or linked to public wage policies. As the evidence from East and South African countries shows, wages are set uniformly without regard for place, time of year, or qualifications of workers. This kind of wage setting often fails to recognize that rural labor markets are linked to agricultural seasons, and projects must be synchronized to meet the seasonal needs of agricultural work.
The role of the public sector in implementing public works has expanded. A number of public works institutions emerged in the 1980s with the active support of international and bilateral agencies and nongovernmental organizations. An increasing emphasis on private-sector participation in public works programs - especially in the Francophone countries of Burkina Faso, Mali, Niger, and Senegal - is also evident.
REACHING THE POOR AND FOOD INSECURE
Although targeting the poor and food insecure is not often an explicit policy in design of public works, IFPRI studies in Sub-Saharan Africa have provided some important insights on short-term effects of public works on the poor:
· While employment is often open to all working adults, the programs are self-screening in that workers who are interested in doing the kind of work provided at the wages offered are largely from households who have low, variable incomes and few assets.
· The poor, who are dependent on erratic farm income sources, earned considerably more income from public works than did nonpoor households, and they relied more on public works to stabilize their short-term food security.
· How much women participate in the program varies across programs and countries. Female participation, especially single adults, tends to be higher in areas where men have better alternative wage employment. In poor areas, older women with children are more likely to participate.
· Although no explicit targeting devices are built into the design of these programs, factors such as location of projects and wage rates implicitly target the poor.
· The effects of these programs on nutritional outcomes have not been established.
· Access to public works employment has the potential to complement private coping mechanisms like access to informal credit markets. Studies from Botswana and Ethiopia indicate that access to public works employment can serve as a substitute for collateral for the poor.
· These work schemes only reach families where there are adults who are able to work. Many destitute households, especially female-headed households, do not have an adult who can go out to work. These households are not captured in these schemes. Therefore, public works programs have to be complemented with other interventions in order to ensure that all of the poor are assisted.
POLICY ISSUES FOR 2020
The main challenge for most of the Sub-Saharan African countries in the next 25 years is to increase labor absorption without causing further declines in labor productivity and income. This calls for policies to promote high enough economic growth rates to absorb the growing labor force in remunerative employment.
The demand for LIPW is bound to remain high in such environments. Although the burden of employment creation largely falls on the agriculture sector, LIPW programs can be designed to provide additional employment opportunities for the growing labor force. And, given that the need for investment in infrastructure and direct productive assets to meet the demand for rapid economic growth and development is substantial, LIPW can be designed cost-effectively to generate these assets. In addition, the use of LIPW as a safety net instrument is likely to prevail in countries where output and employment growth are highly variable.
However, the objectives of these programs need to be clarified. This lack of clarity contributes to ambiguity in the design of programs and policies. For example, are they instruments for generating employment for all who wish to work, assuming that this will translate into a reduction in poverty? Or are they a low-cost method of producing assets? Or are they devices for screening and targeting the poor, as they are in some areas? None of the current LIPW programs are specifically tailored to meet the objectives.
It is feasible to enhance the incomes of the poor in the short term with minimum adverse effects on long-term growth, but research is needed to determine what conditions and what kinds of assets help to minimize the tradeoffs between growth and equity. More information is particularly necessary to establish the poverty, nutrition, and productivity link and to identify those assets where the loss in productivity due to employing the poor is low. For example, what kinds of assets are most cost-effective in times of relief intervention, particularly when the loss in productivity from poor nutrition is expected to be aggravated?
The long-term employment and income-creation effects of public works programs are largely contingent on whether the value of the assets created is long-lasting. Long-term food security is enhanced where the assets have large employment multiplier effects. Public works programs in some African countries emphasize asset creation, but they fail to include a maintenance component in program design: as a result, many assets deteriorate quickly.
To expand and maintain these programs successfully requires such corrective measures as proper integration of public works programs into national planning frameworks, greater commitment of public funding, sufficient provision of nonlabor inputs, and increased community-level involvement. In addition, it is crucial to build effective monitoring and evaluation components early on to internalize the learning process. The various programs need to identify and establish criteria for program success, develop systematic monitoring and evaluation systems, and devise a structured procedure for evaluating responses.
Labor-intensive public works have the potential to serve as both short-term sources of employment and long-term generators of growth and productivity increases. They can be designed cost-effectively to alleviate poverty and improve food security. This function can be further strengthened if they are combined with other food-security-enhancing policies and projects. Policymakers, donors, and researchers need to pay close attention to improving the design of public works and to searching for the right portfolio of intervention instruments.