Are public works an appropriate policy choice to address chronic poverty (defined as poverty experienced over an extended duration)? This paper from the Public Works Research Project of SALDRU, at the School of Economics in the University of Cape Town, examines the role of public works as a social protection instrument (that aims to reduce poverty and vulnerability) in the context of chronic poverty, focusing on South Africa and Malawi. The adoption of public works in situations of chronic poverty is based mainly on ideological preferences rather than on empirical evidence.
Public works simultaneously create public goods and provide employment for those unable to find alternative employment. In Malawi and South Africa, they play a central role in national social protection policy. The selection of public works over alternative social protection instruments is based on four assumptions. Firstly, they are consistent with the dominant development ideology. The poor work in exchange for social protection, avoiding the perceived dependency effects of direct income transfers. Secondly there is no trade-off between productive investment in infrastructure and expenditure on welfare as public works provide social assistance and create assets. Thirdly they create employment. Finally, low wages leads to self-targeting by the poor. Public works tend to dominate social protection policies as a result of these ideological preferences and assumptions rather than on the basis of empirical evidence and theory. Empirical evidence suggests that public works function well as responses to temporary poverty, but are unlikely to succeed in providing social protection in situations of chronic poverty. The potential for the accumulation of assets to move out of chronic poverty through public works is low:
- The assets created may not contribute to long-term sustainable livelihoods for the poor.
- Employment provided tends to be short term and temporary.
- There may be a diversion of labour away from other long term production activities in favour of gaining immediate cash income from public works.
- Low wages are not sufficient to ensure adequate self-targeting by the poor.
Instead of providing temporary, one-off social assistance that promotes the smoothing of short term consumption, if public works programmes are adopted in situations of chronic poverty they need to facilitate the accumulation of productive assets. This involves:
- Providing sustained employment opportunities, for example, providing year round public works employment.
- Creating assets that expand livelihood opportunities for the poor such as rehabilitating irrigation facilities and improving access to roads.
- Integrating public works programmes with other developmental initiatives.
- Creating linkages with micro-finance, and micro-enterprise activities.
- Flexible or piece based employment, which allows participants to combine public works employment with activities such as agricultural production that provide income in the longer term.
- Providing higher wages since low wages may be contrary to social protection objectives.
- Poverty targeting measures.
