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Document prepared for the Regional Policy Dialogue Poverty Reduction and Social Protection Network Inter-American Development Bank         Carlos H. Acuña and Fabián Repetto Washington, DC April 24-25, 2006


Poverty in Latin America: multidimensionality and evolution of state responses

Five issues worth highlighting…   Certain  types  of  intervention  logic  and  institutional  design  will  arise depending on the definition of poverty (including its causes)  adopted by the different governments.   The  “official”  definition  of  poverty  implies  conceptual  as  well  as  ideological and power-relation aspects.  In recent history, the region’s major milestones in the fight against  poverty  have  included  Social  Funds,  focalized  and  limited  programs, Poverty Reduction Strategies, and Conditioned income  transfer programs.  A  number  of  ideas  aimed  at  making  interventions  on  poverty  consistent are gaining strength, whether by focusing them on the  family, the life cycle or the local territory.  It  is  important  to  recognize  that  the  type  of  good  or  service  provided  by  a  poverty-fighting  program  will  determine  the  kind  of  institutional design and operational management required.

Bringing up (once again) the issue of Latin  American heterogeneity (I) National/regional differences:

By political regime

By political-regional organization

By political-governmental organization

By political-party organization

By political-state organization 

By civil society organization

By relative weight of urban vs. rural aspects

By relative weight of racial, ethnic and cultural homogeneity/heterogeneity

By type of economy and insertion into the global economy

By degree of autonomy vis-à-vis external agents

Bringing up (once again) the issue of Latin  American heterogeneity (II) Differences by type of poverty: In addition to the aforementioned issue that “poverty” as a matter of public policy implies ideological and  political construction, attention must be paid to other aspects of the phenomenon: 

Presence or absence of cultural gaps.

Presence or absence of ethnic, racial and/or religious gaps.

Presence or absence of regional and/or geographical gaps.

Presence or absence of “seasonal” conditions, like “new” vs. “historical” poor segments.

Differential impact of poverty on diverse vulnerable subgroups, including groups not affected by any of  the  gaps  mentioned  above  (poverty  and  exclusion  have  a  different  impact  on  women,  children,  teenagers, men or disabled individuals).

THE ARENAS OF POVERTY FIGHTING               Policy and Program System (PFS) 

The phrase “poverty-fighting policy and program system” (PFS) will be used to refer to the set of institutions, actors and practices (state-run, non state-run and private) aimed at reducing poverty in a certain society.

Institutionality of the Poverty-Fighting Policy  and Program System

Government/coordination subsystem (I) Responsible for the government function and entitled to: •   •   •   •   •   •   •

set the goals and objectives pursued by the policy that will guide the system; establish priorities and intervention methodology (strategies); assign duties and responsibilities to the areas and actors dependent upon the organization; allocate the funds required to fulfill the activities related to compliance with the duties and  responsibilities assigned; monitor progress of the activities, compliance with the intervention methodology and fulfillment  of goals in time and form; systematize pertinent information and evaluate the policy implementation process; redefine the policy (its implications, objectives, goals and intervention methodology) in  accordance with the conclusions drawn from the evaluation. 

Government/coordination subsystem (II) Responsible for the coordination function, which is to be understood as: “…the process whereby synergy is created between the actions and resources of the  different agents involved in a specific field of public management, coincidental with the  establishment  […] of a system of formal and informal playing rules that operate within  the  same  process  and  whose  application  represents  significant  incentives  for  the  participating  actors  to  cooperate  […].  The  process  in  question  will  create  actual  and  valuable  coordination  once  it  begins  setting  priorities,  allocating  responsibility  by  agreement, deciding which and how many resources to mobilize and, last and perhaps  most  important,  implementing  rules  in  a  manner  that  comes  significantly  close  to  the  goals set by those responsible for social policies and programs” (Repetto 2005).

THE VARIABLES OF POVERTY FIGHTING   Institutions and Actors  An analysis of the decisions concerning poverty reduction policy should consider:

a)     The Institutional Framework where the interaction takes place, by defining: formal rules informal rules b)     The participating actors defined by reference to their: Interests Resources Ideology c) Poor social groups without the resources to resolve their collective action problems and, consequently, actors : Interests Resources (existing and missing) Ideology

without becoming participating

Main lessons and conclusions of the poverty-fighting experiences over the last two decades

Decentralization, Participation and  Intersectoriality: What do we know? (I) Actors involved and political resources 

In general, impoverished sectors lack significant political power  resources (beyond their potential capacity for mobilization and electoral  influence), which facilitates the introduction of clientelist practices by  decision makers and bureaucrats.

The fight against poverty implies involvement from multiple actors inside  and outside the State, thus making collective action an increasingly  complex process.

Coordinating the multiple groups and actors involved requires a formally  credible and authoritative “catalytic agent”; in addition, the different state  sectors should receive some sort of incentive to take steps in the fight  against poverty. 

Decentralization did not stand by all its promises to promote  participation and improve the quality of democracy.

Let us not forget that strengthening the role of the poor as influential  actors will affect power relationships and (potentially) the contents of the  entire set of public policies.

Decentralization, Participation and  Intersectoriality: What do we know? (II) The importance of budgetary and organizational resources 

Dealing with poverty from a comprehensive perspective calls for a type of  budgetary allocation that does not undermine “the purpose or organizational  identity” of classic social ministries.

The importance of achieving a common vision between those allocating the  budget and those responsible for the fight against poverty, as a way to  relieve the Ministry of Finance from conducting it on its own. 

Hardly ever does the participation of impoverished groups have an influence  on the core aspects of budgetary allocation. 

There is still insufficient knowledge on the transit from mono-sectoral  solutions with dispersed allocation of resources to integrality-boosting  coordination perspectives. There is an evident lack of technical expertise in  coordination.

Municipalities tend to have very little incidence on the poverty-fighting  programs that have been decided and funded by the central government;  besides, their management capacity is usually very heterogeneous. 

Decentralization, Participation and  Intersectoriality: What do we know? (III) The rules of the game and their impact on the fight against poverty 

The path chosen to fight poverty is usually very weakly institutionalized,  and there is little clarity on the assignment of responsibilities.

Too much confidence has been placed on “formal institutional  engineering”, which has rested on heaping amounts of laws, decrees  and regulations. 

Transition has begun towards the establishment of agreements and  clear rules between the State and the citizens who receive the goods  and services of certain poverty-fighting programs (e.g.: Oportunidades,  Chile Solidario).

Although still in some exceptional cases, attempts are being made  towards a more accurate description of State responsibilities and  resources in terms of who should do what to fight poverty.  

Summary of the lessons learned? (aspects to be considered I) 

The first  aspect  to  be  considered  is  that  poverty-reduction  strategies  must  stay  away  from  the  temptation  of  applying  universal  recipes:  Latin  America  exhibits  very  diverse  social  and national conditions, and very different types of poverty. 

The second aspect to bear in mind is that the new institutional  framework designed will build upon the previous (historical) one  in  terms  of  its  formal  and  informal  rules,  and  must  conform  to  the  governing  coalition’s  definition  of  poverty,  its  causes  and  possible  consequences  (the  coalition  includes  other  sectors  besides the government itself).

Summary of the lessons learned?  (aspects to be considered II) 

Greater empirical information seems to be required (especially in view of Latin  America’s  characteristic  heterogeneity)  on  how  the  different  types  of  decentralization,  participation  and  intersectoriality  affect  the  fight  against  poverty and, more importantly, what happens when different types of each of  these three institutional arrangements are combined.

Designing better  poverty-fighting  institutions  also  implies  the  recognition  of  significant potentialities of centralized, non-participatory and sectoral matters.

Building and  increasing  capacities  must  be  the  guiding  principle  of  any  institutional  design  aimed  at  fighting  poverty,  not  only  in  the  state  sphere  (at  the national, sub-national and local levels), but also in the civil society arena.  When  referring  to  “capacities”,  we  must  avoid  a  reductionist  vision  and  concentrate  on  the  entire  set  of  political,  budgetary  and  organizational  capacities.

Although the  institutional  framework  and  its  hierarchical  structures  deserve  some  attention,  the  main  focus  should  be  on  strengthening  intermediate  institutions that help create the conditions to ensure continuity of those social  policies that are pertinent to a successful fight against poverty.

In brief... Budgets for poverty-fighting actions: Poverty-reduction  strategies:  a)  must  conform  to  the  specific  national  characteristics  by  considering  the  peculiarities  of  the  poverty  they  are  geared  at  as  well  as  the  political,  economic  and  organizational  capacities  that  establish  the  limits  to  feasibility;  and  b)  must  be  designed,  decided  and  implemented  by  analyzing  the  strengths  and  weaknesses of the institutional framework surrounding them. The first step of institutional strengthening: The  national  government/coordination  subsystem  must  be  the  starting  point  of  any  political,  institutional  and  organizational  strengthening  of  each  country’s  poverty-fighting  system.  Without  sufficient  autonomy,  cohesion  and  collective  action  capacity  for  this  national  management/leadership  body  to  perform  its  duties,  the  chances  to  generate and support a poverty-fighting strategy will be non-existent. 

institutionality of poverty reduction policies and programs in latin america  

this presentation was commissioned by the poverty reduction and social protection network of the regional policy dialogue for the viii hemis...

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