Association for Public Policy Analysis & Management

Antipoverty transfers have been increasingly employed by governments in developing countries, especially in the last two decades. The growing literature evaluating the outcomes of these programmes has paid close attention to identifying reliably the changes associated the introduction of these programmes, on the beneficiaries themselves and on the local economy. Much less attention has been paid to evaluating the outcome changes in welfare terms, employing welfare weights representing the marginal contribution of each individual. Evaluations of transfer programmes necessarily involve welfare weights, but in most cases they are not explicitly addressed. For example in estimating the poverty reduction effectiveness of a transfer programme, the implicit welfare weight is equal to 1 for all individuals in poverty and 0 for individuals above the poverty line.

The choice of welfare weights can therefore be crucial in the estimation of programme impacts. And, as welfare weights ultimately reflect social preferences, it is important to make them explicit. A further complication derives from the fact that the empirical literature on welfare weights, despite providing useful information on them, cannot be relied to produce empirical estimates. The main estimation methods used in the literature are also presented in the paper.

The importance of social weights in the evaluation of antipoverty transfer programs is then tested for the case of Uganda and its new social protection program. First an experimental approach has been used to generate welfare weights. Second, these weights, together with relevant estimates found in the literature, have been used in the empirical analysis. The analysis simulates the potential welfare effects of recently launched cash transfer programs and demonstrates the significance of the welfare weights choice in the estimation of welfare impacts of these programs.

This paper is part of the NWO-WOTRO project: "Building the Economic Case for Investments in Social Protection in Uganda"

This project was officially launched with a Kick-off Workshop in Kampala, Uganda. It includes a consortium of researchers of Maastricht University, the University of Manchester and Makerere University in collaboration with the Expanding Social Protection Program (ESP) of the Ministry of Gender, Labor and Social Development

Authors of the paper and project

Stephan Dietrich and Franziska Gassmann (MGSoG/UNU-Merit, Maastricht University), Armando Barrientos and Daniele Malerba (University of Manchester), Susan Kavuma, Fred Matovu (Makerere University)