Colleagues Anthony Hodges and Clare O’Brien have a new working paper out with Lisile Ganga from UNICEF on possibilities for social protection for the Republic of Congo. The bottom line - universal child allowances are affordable and would have a huge impact on poverty.
The Republic of Congo, also known as Congo-Brazzaville, is a country with striking contrasts between its status as an oil-rich, low middle-income country and its high levels of poverty and child deprivations. Social protection provision is largely limited to a small minority in the formal sector of the economy.
This paper presents the results of quantitative micro-simulations on the cost, impact and cost-effectiveness of different policy options for cash transfers in Congo, including universal and targeted child allowances, old-age pensions and disability benefits, along with an analysis of the existing social protection system, the policy framework and institutional capacity.
While a poverty-targeted child allowance would be the most cost-effective option, in terms of cost per unit of reduction in the poverty gap, institutional and technical constraints make large-scale poverty targeting unviable in a country with very weak governance. Universal categorical approaches would be much simpler to implement, while still being financially feasible given Congo's substantial fiscal surplus (14% on average in 2006-10). Under the assumptions employed for the simulation, a universal allowance for children under 5 would reduce the national poverty headcount by 9% while costing only 0.7% of GDP.