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Fiscal year 2010/11 - Poverty Alleviation Fund, Nepal

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Annex 21<br />

Summary Results of Follow-on Impact Survey <strong>2010</strong><br />

(Done by TU and the World Bank)<br />

1. PAF’s monitoring data is developed on 5 different databases<br />

which support the process of working with partner and community<br />

organizations and monitoring the sub-project activities (figure 1). These<br />

databases provide a rich source of information on PAF activities and<br />

have been increasingly analyzed to improve planning and address<br />

weaknesses in the project implementation process and to identify areas<br />

of strength that can be scaled up.<br />

2. In addition to the MIS, an independent impact evaluation has also been<br />

integrated into the design of the program. The IE has been a long-term<br />

partnership between the PAF Secretariat, Tribhuvan University (TU) (that<br />

carried out the surveys) and the WB task team (that provided Technical<br />

Assistance- TA during the design phase and carried out the analysis).<br />

Data for the PAF Impact Evaluation (IE) come from two rounds of surveys<br />

Partner<br />

Organization<br />

Selection<br />

Partner<br />

Organization<br />

Selection<br />

of 3,000 households from 200 villages. The baseline was carried out in<br />

late 2007 and the follow-up of the same households in early <strong>2010</strong>. The<br />

survey questionnaire is adapted from the <strong>Nepal</strong> Living Standards Survey<br />

(NLSS) and includes detailed information on consumption and income,<br />

socio-economic and demographic issues, including education, health<br />

and nutrition, housing conditions and physical assets, migration and<br />

remittances, employment, social environment, community relationship,<br />

voice and participation. For comparability with the national household<br />

survey based welfare measures, PAF survey includes a very similar<br />

consumption module and follows the same consumption aggregation<br />

method. The IE analysis uses panel households (2774 out of 3,000),<br />

half of which are PAF beneficiaries (treatment) the rest non-beneficiaries<br />

(control) households. Outcome indicators on PAF beneficiary households<br />

and carefully matched non-beneficiary households are compared for the<br />

periods before and after the initiation of the PAF program. This method<br />

is known as difference-in-difference combined with propensity score<br />

matching.<br />

Consumption Effects<br />

Community<br />

organization<br />

selection and<br />

registration<br />

Community<br />

organizations<br />

database-Beneficiary<br />

Assessment<br />

Community:<br />

Selection<br />

priority<br />

activites<br />

Community<br />

Agreements<br />

database<br />

Subproject<br />

Projects<br />

database<br />

Community:<br />

Implementation<br />

of activites<br />

Revolving<br />

<strong>Fund</strong><br />

database<br />

3. The estimated net program impact on per capita consumption (in<br />

real terms adjusted for price inflation) growth is 13% for PAF Income<br />

Generating (IG) participant households, 28% for PAF money recipient<br />

households and 49% for those beneficiaries who have received the<br />

money for at least six months. It is not a surprise that these impact<br />

estimates are larger for money recipients but it is interesting to note<br />

that this effect remains strong for those who have had the funds for<br />

some time and have invested them in IGAs. The magnitudes of these<br />

estimates are impressive across all three categories of treatments both<br />

in terms of per cent change and absolute change. For example, money<br />

recipients for more than 6 months recorded on net a 49 per cent growth<br />

and Rupees 6,900 (approximately US$100) absolute change in real per<br />

capita consumption in just over two <strong>year</strong>s of time. These results are all<br />

statistically significant and robust across different matching algorithms.<br />

The higher levels of welfare impact over time may suggest that IGA<br />

revenue is contributing to the welfare of these households, a result that<br />

would be desirable from a policy and sustainability point of view.<br />

4. The net impact in the growth in per capita consumption is even higher<br />

for Dalit and Janajatis, implying the program’s ability to distribute growth<br />

towards targeted groups. The net effect for money recipients among this<br />

caste/ethnic group was an increase in real per capita consumption of 34<br />

per cent, compared to 28 per cent for the overall sample of the same<br />

treatment category.<br />

Food Security Effects<br />

5. Chronic food insecurity is a particularly important concern in <strong>Nepal</strong><br />

and substantial amount is spent per <strong>year</strong> on public works programmes<br />

aimed at alleviating hardship for food insecure households. Sustained<br />

food price inflation remains a concern and an estimated 3.7 million<br />

people are currently food insecure. The impact of high prices and food<br />

insecurity is most severe on economically, geographically and socially<br />

marginalized communities. Since <strong>Nepal</strong>‟s poorest households spend<br />

more than 75% of their income on food, high prices will continue to<br />

affect poverty alleviation efforts. The analysis estimates that the net<br />

PAF impact on incidence of food insecurity (as defined as self-reported<br />

food sufficiency for six months or less) is 10 per centage points decline<br />

when the treatment group is PAF money recipients, and 14 per centage<br />

points decrease among money recipients at least 6 months prior to<br />

second-round survey. These effects are stronger for Dalit and Janajati<br />

households. However, there is no impact for PAF IG households (the<br />

base treatment category), possibly implying that the self-reported food<br />

sufficiency indicator (measure of perceived change in household’s ability<br />

to increase their food consumption) is not affected by PAF participation<br />

alone when the household is yet to receive funds and start an IG activity.<br />

Once again, these results are quite robust across different matching<br />

alternatives.<br />

School Enrolment Effects<br />

6. Due to PAF, school enrolment rate among 6-15 <strong>year</strong> old children<br />

increased by a net 7 per centage points for PAF IG households, by a<br />

net 9 per centage points for PAF money recipient households , and a<br />

net 12 per centage points for PAF money recipients for more than six<br />

months. These are all notable and statistically significant impacts. While<br />

child education is not a direct outcome associated with PAF intervention,<br />

one can think of at least two ways by which a treated household would<br />

change its behavior in relation to this outcome. First, PAF households<br />

are part of the larger PAF community organization (CO) are and likely<br />

to benefit from social-networking and mobilization. Second, actual<br />

and perceived positive change in income (PAF funds) will likely reduce<br />

potential constraints to sending a child to school.<br />

68 ANNUAL PROGRESS REPORT (<strong>2010</strong>/20<strong>11</strong>)

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