Socially Sustainable Transport Training Session 4

Poverty Anal ysis in ADB (Armin Bauer)

(Presentation + Questions/Answers/Discussion)
For inquiries:
Armin Bauer (Principal
Economist, RSDD-ADB,
abauer@adb.org, Tel: 0063-2-
6325550 )
Content
Why PSA
The essence and final purpose of development
Creating direct impact for the bottom 40%
Pro-poor transport design
How PSA
Ex ante (poverty) impact assessment is more than EIRR
Link to poverty strategy
Beneficiaries and benefits
It is not about social safeguards
Examples of making systemic impact
The apple story along the Guangxi expressway
The efficiency story in Xian
The governance story resulting in protecting the upland poor in Chittagon
Why bicycles are not good for Zambias women 2
Why PSA ?
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The essence of development:
creating direct impact for the bottom 40%
What is the purpose of transport projects mobility and connectivity,
not numbers of km run in a specific time by cars
What is the development impact of transport project
Final impact is on people, and not growth or other things
Impact on people does not automatically trickle down, but is designed the
need for ex-ante poverty and social impact assessment
What people do really benefit? Need for distributional analysis:
Poor and vulnerable (40% or 60% of Asias population) have different needs than the average or the
rich
to better design a project you need to understand beneficiaries and benefits we need to know the
socioeconomic profiles of project beneficiaries
It is not about
Sustainability (environmental, financial) is not the focus here
social safeguards
Designing only for the very poor
It is about impact on people, not counting outputs or transport outcomes
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Why PSA
Ex-ante impact analysis can change project design
What is it?
Ex-ante impact analysis
On people, especially poor people
With direct impact chains
And link to key poverty/inclusion problems of the society or in the specific region
How is it different?
Not about reporting and monitoring
EIRR is not enough
Not a must do appendix in RRP
Let us operationalize inclusive growth in transport sector, not follow the trickle down believers
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What are the social dimensions
of transport projects?
Impact channels go beyond access
Accessibility
Financial affordability; costs and opportunity costs
Safety and environmental health impact
For analyzing the systemic impact, consider the difference between beneficiaries (immediate
and final) and benefits : road: beneficiaries (truck driver); benefits those who produce goods
that go with the truck form one place to the other; dont go to far with the impact chain
Direct and provable (no trickle down)
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Typical Misperceptions
Overemphasis on resettlement
Traffic participants are only the working middle class
Road building is normally capital intensive; employment is not the
purpose of transport projects: building of roads is mostly capital
intensive; maintenance, and use of labor
transport means can employ a lot of people (40,000 jeepney drivers and
150,000 trycle drivers in Manila, street vendors)
Access is not necessarily for everybody
Measure accessibility of people, not vehicles
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Myth 1: who are the poor ?
The Base of the Pyramid (BoP)
The number of ADB
investment projects
classified as targeted
intervention (i.e.
benefitting mainly the
people below the $2
poverty line) came
down from 40% in
2006 to 20% in 2012
the rich and super rich
$20 upper middle class
$10 lower middle class
$4 low income
$3 vulnerable
poor
very poor
3.9%
The Base of the Pyramid
2 x 5 x
30 x 12
20 x 5
x 30 x
12
$36,000
% of Asia's DMC
population (million people,
2010)
21.2%
25.7%
$3,600
20.0%
10.1%
19.1%
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$1.25, PPP
$2, PPP
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(USD)
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Income Poverty
- Poverty incidence in DMCs
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What is Inclusive Growth?
International understanding
Growth that creates jobs
Promotes equity and equality (spatial, access, redistribution,
beneficiaries)
Accelerates social development for all
Addresses risks and social protection
Designed to stipulate systemic change, sustainability and
participation
reduces inequalities and opens opportunities for low income
and socially included
from $1.25 to $2-4 poor (the bottom 40%)
see session 13: ADBs Contribution to Inclusive growth in the
Transport Sector
How to do PSA?
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Poverty analysis (1)
Three major questions
1. What is the poverty and social situation in the project
relevant area? What is the situation of the poor and
vulnerable socio-economic analysis is not enough
2. How does a project impact on the poor/vulnerable
and excluded (poverty analysis) vis--vis other
beneficiaries
Impact channels, distribution analysis
3. What is the relevance and systemic contribution of
the project intervention (design) for poverty reduction
in the area/country/sector ?
systemic impact; change (not static); ex-ante
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The IPSA, PSA, and SPRSS process
IPSA: the art of asking the right questions
Ex-ante impact assessment, not socio-economic status (before and after; with-
without)
Stay within provable and direct impact channels (no trickle down automatism)
Even the self-proclaimed experts often do not know the right questions to ask,
and often do not master the art of asking the right questions to poor women
and men
PSA influencing project design accordingly
Part of PPTA
PSA is not expensive ($25,000)
Participatory rating tools can help
Do not exaggerate the field surveys: the magic 384
impact not input
Discuss impact channels and quantify

SPRSS: summarizing the relevant answers

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The IPSA
1. Poverty Impact and Social Dimensions
Links to the National Poverty Reduction Strategy
The PRS: Poverty incidence, key reasons for poverty and lack of inclusiveness
How does the project contribute to PRS sector focused analysis
How does the project promotes inclusion project features
How does the project help reducing poverty systemic impact
Targeting Classification and explanation
Poverty and Social Analysis
Key issues and potential beneficiaries
Who are the beneficiaries? Who are not beneficiaries?
How does the project change the socio-economic status of the beneficiaries?
Impact channels and expected systemic changes
What are the impact channels?
Focus of the PPTA and due diligence
Specific analysis for policy based lending
Impact channels
Short term and medium term impact
Direct and indirect impact
2. Gender and Development
3. Participation
4. Social Safeguards
5. Other Social Risks
How important (H,M,L) are the various social issues (multiple choice): employment, CLS, retrenchment,
communicable diseases, human trafficking, affordability, unplanned migration, vulnerability due to natural
disasters, political instability, social conflicts, others
How will the project address them?
6. Due diligence requirements
The PSA Principles:
Ask the right questions (1)
What is the poverty and social situation in the project relevant area?
What is the situation of the poor and vulnerable (social analysis)
How does a project impact on the poor/vulnerable and excluded (poverty
analysis) vis--vis other beneficiaries
Impact, not input
Impact channels, distribution analysis
Stay with impact channels you can prove; Indirect poverty impact
No need to make a grid connected power generation project pro
poor\
Quantify and qualify; do not only describe or tell individual stories
go beyond the individual beneficiary and ask systemic questions
use available and convincing information and data in the project
documentation
Location matters
What is the relevance of the project intervention (design) for poverty
reduction in the area/country/sector ? (systemic impact)
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PSA:
We need impact assessments, not socio-economic surveys
Key questions:
What are the benefits you assume
To whom do the benefits go
When do the benefits come
How will they be
(quantification is most important and mostly not done) why
Analyze before and after; with and without (relative change)
Estimate the counterfactual
Consider the right impact chains; attribute the right causal relationships (be careful with
simplistic regression analysis like poverty in Asia going down to 3% by 2024)
Is related to cost-benefit analysis and benefit incidence analysis
Hence use an economic approach (not sociological) and work with the
economist who is calculating the EIRR of the project
Make the sociologists speak with the project economist,
or even better engage an social economist to do the PSA
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IPSA+SPRSS
Beneficiaries
Socio-economic profile
Who are the people benefitting ?
How many? (how much is this many in comparison to
national/provincial number of poor)
Who are the poor in the project context/area, who are the
vulnerable? What type of poor Are they ($1.25. $2, $3);
how many of the beneficiaries are poor?
Who are the excluded ?
Why are they poor/vulnerable excluded ?
What poor?
Gender dimensions
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Techniques - socio-economic field surveys
- survey size the magic number 384
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5% sample error, and
95% confidence level
is enough
The magic number
is 384 or 275
How many questionnaires do I need to distribute if my
beneficiaries are 1,000,000 people? 10,000 or 3,000 or 400?
Questionnaires for assessing change (9)
transport beyond access
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The SPRSS
1. Poverty Impact and Social Dimensions
Links to the National Poverty Reduction Strategy
Results from the Poverty and Social Analysis
Key poverty and social issues
Beneficiaries
Impact channels
Other social and poverty issues
Design features
PSA for Policy Based lending
Direct/indirect, short/medium term impact channels
Impact on specific vulnerable groups
2. Participation and Empowerment
3. Gender and Development
4. Social Safeguards (involuntary resettlement, indigenous people)
5. Other Social Risks
Labor market
Affordability
Communicable Diseases and Other Social Risks
6. Monitoring and Evaluation:
Targets and indicators
Required human resources
Information in PAM
Monitoring tools
Impact of doing PSA
Examples how you can
change project design
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Inclusive transport national
roads and expressways
Often transport of people is less important for the poor than
transport of their goods
Catch the poverty/inclusive impact at source and destination
area, i.e. the project influence area (Guangxi apples)
target economic potential area for link roads (Shangxi)
connect new areas through facilities (terminal; loading
station); Guangxi
Use the traffic count analysis for policy reforms (Guangxi,
budget)
Inter-country regional roads can have negative social impact
(PRC-Laos-Thailand RN No 6: plastic from PRC vanishes
pottery from poor Lao people)
Inclusive transport - rural
need to connect to markets that provide jobs and income
Link the analysis to economic potential areas, and do not
build roads based on missing links
Road alone is not enough; analyze transport mode also
Walkways on rural roads around schools
Example: Philippines Agrarian Reform; Chittagong
Inclusive transport - urban
the poor walk and cycle, and use polluting tricycle and jeepneys
The poors transport radius is typically very local (2-3 km)
MRT and BRT is more for the middle class, unless connected
congestion is not always the main issue;
Spatial dimensions: where; alignment design (bridges for the cars
and not for the people)
Link to the health of the poor: The poor breath a different air;
accident city planning, not only traffic planning
environmental and poverty goals sometimes conflicts
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Inclusive transport
rail, waterways, air
Railway:
Long distance (180 km)
Mostly for goods
Can be designed pro-poor: stations, transport goods of the poor, railway
compartments,
In some countries it is the main transport vehicle of the poor for long distance
transport
Shangxi East Railway: coal, stations +connecting road, traffic in the night and during
day
Waterways, landing stations,
Often have strong social impact
But are neglected through investments
Air transport
Is not necessarily for the poor ( Pacific islands)
But one could use income (e.g. Mongolia radar system)
Rural airports connect isolated regions (Bhutan) bring medical facilities etc.
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Further reading
DAC InfraPoor Guidelines: http://www.oecd.org/dac/povertyreduction/36301078.pdf
DAC InfraPoor Background papers:
http://www.oecd.org/dac/povertyreduction/promotingpro-poorgrowthinfrastructure-chapters.htm
DAC (2006): A Practical Guide to ex-Ante Impact Assessment.
http://www.google.de/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&
ved=0CCEQFjAA&url=http%3A%2F%2Fwww.oecd.org%2Fdac%2Fpovertyreduction%2Fprom
otingpro-
poorgrowthexantepovertyimpactassessment.htm&ei=vpMNVKawI83d8AXbxoKIBQ&usg=AFQj
CNH45bUgFW9a_lurzg-8tBdhKk8mQw&bvm=bv.74649129,d.dGc
ADBI (2005) Transport Infrastructure and Poverty Reduction Workshop.
http://www.adbi.org/event/851.transport.infrastructure.poverty.reduction/?sectionID=27
World Bank (2001): A Sourcebook for Poverty Reduction. Vol 2 (sectors):
Chapter 22(Transport)
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