25536 December 2002 11~~~~~~(1 WORLD BANK INSTITUTE Tc UTEr tnn Promoting knowledge and leaming for a better world T H E W O R L D B A N K Social Safety Net Primer Series Ensuring Access to Essential Services: Demand-Side Housing Subsidies Harold M Katsura and Clare T. Romanik December 2002 WORLD BANK INSTITUTE IotJn Promohng knowledge and learning for a boeter world k J rot rtI:IA T H E W O R L D B A N K The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Social Safety Net Primer Series The World Bank Social Safety Nets Primer is intended to provide a practical resource for those engaged in the design and implementation of safety net programs around the world. Readers will find information on good practices for a variety of types of interventions, country contexts, themes and target groups, as well as current thinking of specialists and practitioners on the role of social safety nets in the broader development agenda. Primer papers are designed to reflect a high standard of quality as well as a degree of consensus among the World Bank safety nets team and general practitioners on good practice and policy. Primer topics are initially reviewed by a steering committee composed of both World Bank and outside specialists, and draft papers are subject to peer review for quality control. Yet the format of the series is flexible enough to reflect important developments in the field in a timely fashion. The primer series contributes to the teaching materials covered in the annual Social Safety Nets course offered in Washington DC as well as various other Bank-sponsored courses. The Social Safety Nets Primer and the annual course are jointly supported by the Social Protection unit of the Human Development Network and by the World Bank Institute. The World Bank Institute also offers customized regional courses through Distance Learning on a regular basis. For more infornation on the primer paper series and papers on other safety nets topics, please contact the Social Protection Advisory Service; telephone (202) 458-5267; fax (202) 614-0471; email: socialprotectiongworldbank.org. Copies of related safety nets papers, including the Social Safety Nets Primer series, are available in electronic form at www.worldbank.org/safetynets. The website also contains translated versions of the papers as they become available. An ambitious translation plan is underway (especially for Spanish and French, some in Russian). For more information about WBI courses on social safety nets, please visit the website www.worldbank.org/wbi/socialsafetynets. Recent and Forthcoming Papers in the Safety Nets Primer as of August 2002' Theme Author Program Interventions Cash transfers Tabor Food related programs Rogers and Coates Price and tax subsidies Alderman Fee waivers in health Bitran and Giedion Fee waivers in housing Katsura and Romanik Public works Subbarao Micro credit and informnal insurance Sharma and Morduch Cross-cutting Issues Overview Grosh, Blomquist and Oucrghi Institutions de Neubourg Targeting Coady, Grosh and Hoddinott Evaluation Blomquist Political Economy Graham Gender Ezemenari, Chaudhury and Owens Community Based Targeting Conning and Kevane Country Setting/Target Group Very Low Income Countries Smith and Subbarao Transition Economies Fox Non-contributory pensions Grosh and Schwarz 1. Papers may be added or deleted from the series from time to time. Abstract This paper examines the strengths and weaknesses of demand-side subsidy approaches for improving poor households' access to housing services. It begins with a discussion of the rationale for stand-alone housing assistance programs and a description of the ongoing transition away from traditional supply-side housing assistance to demand-side subsidies. The paper presents model demand-side approaches, but also draws on real world examples to highlight various aspects of program design related to targeting, transparency, price distortion, institutional capacity, administrative complexity, and funding. It also describes how variations in the design of housing-related subsidy programs can appear in response to philosophical, political, and resource considerations. The paper concludes with a discussion of the appropriateness of different subsidy approaches for various situations. Table of Contents I: Introduction ........................................ 1 II: Rationales for Government Intervention .........................................1 III: Trends in the Housing Sector .........................................2 IV: Program Descriptions .........................................4 Capital Grants .........................................5 Housing Allowances .........................................5 V: Program Design and Implementation .........................................9 Participation Rates ........................................ 10 Turnover and Recertification .........................................1.1 Means Testing ........................................ 12 Monitoring ........................................ 13 Controlling Administrative Costs ......................................... 13 VI: Determining an Appropriate Approach ........................................ 13 References ........................................ 16 Boxes Box 1: The Gap Formula ........................................8 Tables Table 1: Direct Demand-Side Subsidies by Country: 1996 ......................................... 6 Table 2: Program Examples ..............................................9 Table 3: Summary of Key Program Attributes ........................................ 14 Ensuring Access to Essential Services: Demand-Side Housing Subsidies Harold M Katsura and Clare T Romanik, The Urban Institute' I: Introduction This paper presents an overview of several demand-side subsidies that governments of developing countries have been using to increase access to housing services among the poor. It is based on a review of existing literature and is intended to be a non-technical guide to help government officials, policymakers, and others to assess their options for assisting the poor. Because any of the approaches presented here might be appropriate depending on the situation in question, this paper does not attempt to define "best practices." Policymakers will have to weigh the strengths and limitations of each approach in deciding which one to use. The remainder of this paper consists of five sections. The following section presents common reasons for governments to intervene in the provision of housing services. The third section contains a brief overview of trends in the housing sector that have led to the kinds of programs that governments are implementing today. The fourth section describes basic demand-side approaches for subsidizing the housing expenditures of households and discusses their theoretical advantages and disadvantages. This is followed by a fifth section that explores several key implementation topics and discusses how institutional capacity and administrative costs can affect outcomes. The sixth and final section summarizes the pros and cons of these approaches and describes situations for which each might be appropriate. II: Rationales for Government Intervention The relative importance of the various rationales for government intervention in the housing sector depends on one's point of view. From the perspective of a social safety net, the main justification for providing housing assistance is that adequate shelter is a basic need that governments have a responsibility to help to fulfill, especially during times of hardship. Although housing assistance programs may already form part of a country's basic economic security system, governments often introduce new programs or expand existing ones as remedial measures following unexpected severe economic shocks or natural disasters. Housing assistance programs can keep families from sliding into poverty after such shocks. In transition countries, instead of simply being a response to a crisis, programs providing the poor with assistance with their housing-related expenditures have been set up in anticipation of them experiencing hardship from planned price increases. In these cases, the introduction of housing assistance makes it possible to implement reforms such as price increases or deregulation. iWe would like to thank John Blomquist, Michael Haney, and Chris Jones for their constructive comments. Housing assistance programs can also satisfy other goals that are important to many policymakers. For example, some programs may promote homeownership and the development of the private sector. Housing and housing-related infrastructure programs can encourage community development or neighborhood revitalization initiatives. Promoting labor mobility has also been increasingly used as a rationale for housing assistance. Housing programs can also support economic development by helping people to set up home-based businesses. At a much broader level, a shift away from supply-oriented subsidies to demand- side subsidies can form part of a strategy to develop a market-based housing sector. There are several reasons for implementing a stand-alone housing assistance program instead of incorporating it into a general cash benefit program. Ensuring a minimum level of consumption of these goods among the poor is one reason, but other reasons are more pragmatic. Housing expenditures can make up a large portion of the budget of low-income households, and benefit levels are often correspondingly high. Securing political support for expensive programs is easier when benefits are earmarked. The funding source also influences the choice of the subsidy delivery system. When international donors are involved, they may express a preference for stand-alone programs because they may have earmarked funds that cannot be used as general cash assistance. III: Trends in the Housing Sector Several trends have emerged in the housing sector that have influenced government policies. Governments everywhere have faced increasing fiscal constraints, and this has motivated them to seek ways to enhance their revenues and cut costs. The relatively high cost of many housing programs makes them obvious candidates for reform. On the revenue side, governments have introduced fees, raised rents and fees, and increased collection rates. On the expenditure side, governments have looked for ways to cut and rationalize subsidies. Often these measures are implemented as a part of a broad package of sector reforms, which might aim, for example, to decentralize responsibility for housing and housing-related services or to privatize state-owned housing. With this pressure to extract a greater contribution from households comes the need to protect the poor from the impact of sector reforms. In the housing sector in developing countries, there has been a trend away from traditional supply-side assistance to demand-side subsidies. Traditional supply-side housing programs include government-built public housing and other so-called "bricks and mortar" subsidies given to the producers of housing, including, for example, subsidized financing, contributions of land and materials, and tax credits and deductions. With all such programs, producers are obligated to pass on part of the subsidy to households by charging below-market rents for the units that they produce. From the perspective of households, the key characteristic of any supply-side housing program is the lack of choice, in that a household must take or leave what the producer offers. In contrast, demand-side housing programs channel subsidies directly to the household through cash-like allowances or grants. Typically, the household pays the market price and is allowed to select its home from a. variety of suppliers. Demand-side subsidies have been used in transition economies to protect households from rent increases during these countries' shift to a market-based system of housing provision. In market economies, demand-side subsidies have been used to increase the transparency and effectiveness of subsidies. 2 The story of the supply-oriented 1970s and 1980s demonstrates the pitfalls of direct government involvement in the production, financing, and allocation of housing. This experience provided the impetus for the market-driven demand-side approaches that took hold during the 1990s (see World Bank 1993).2 In the 1970s, the main objectives of governments and donors were to provide affordable land and housing for the poor, attain a high degree of cost recovery, and to replicate the results. Policymakers emphasized "sites and services" projects that were intended to demonstrate the feasibility of providing minimum-standard houses with secure tenure and basic services. Unfortunately, these projects encountered many problems. Too often, targeting was weak so units ended up in the hands of higher-income households, either through the initial allocation of units or the subsequent turnover of units. In some instances, projects failed because people would not occupy undesirable sites that were too far from their jobs and important services. Also, poor households often lacked the additional resources needed to finish their homes, and the limits of the concept of self-help became evident. Cost recovery efforts were often very poor, and this effectively increased the subsidy received by households and made it less likely that the projects could be replicable. In the 1980s, there was a shift toward implementing projects aimed at providing the poor with financing to buy housing, often through public financial institutions. One of the main goals was to create self-supporting financial agencies that would lend to low- and moderate-income households. Finance was seen as a mechanism that could increase households' own contributions and thereby reduce subsidies. Unfortunately many housing finance projects encountered problems that threatened their long-term viability. Interest rates on loans were often highly subsidized, and in countries with high inflation, the value of repayments in real terms quickly declined, limiting the ability of financial institutions to recover costs. High default rates combined with weak foreclosure laws often made it even more difficult to recover costs. In some instances, the public financial institutions that were running the loan programs hesitated to take harsh actions against households for defaulting on their repayments, which reduced their incentive to pay. Even with heavily subsidized interest rates, the terms of the loans were often not affordable to the truly poor. Frequently the loans were tied to the purchase of newly constructed units built by the government or by private developers to the government's specifications.3 By the 1990s, governments concentrated on making the housing sector function better through an integrated approach that focused on both demand and supply issues. On the demand side, policymakers started focusing on clarifying and strengthening property rights, instituting market-rate housing finance, and targeting subsidies to households using demand- side approaches. On the supply side, policymakers began to upgrade existing housing instead of building "sites and services" housing and new housing. Some program sponsors began to incorporate beneficiaries' input into the design and implementation of their projects, thus making them feel like stakeholders. Policymakers also focused heavily on introducing regulatory and institutional reforms that would better serve everyone involved in the housing sector, especially the private sector. Governments increasingly aimed to facilitate the 2 This is an invaluable document for gaining a basic understanding of current ideas in housing policy. 3A good example of this type of lending is the homeownership credit program (KPR) operated by the state savings bank (Bank Tabungan Negara) in Indonesia in the late 1970s and 1980s. See Struyk, Hoffrnan, and Katsura (1 990) for an evaluation of this program. 3 development of a vibrant private sector capable of adequately sheltering a large share of the population, thus reducing the need for public housing assistance. In 1993, the World Bank articulated the views that the global housing policy community had begun to embrace when it recommended: (i) making subsidies transparent; (ii) targeting subsidies on the poor; (iii) switching to demand-side subsidies; and (iv) monitoring subsidies. It discouraged: (i) subsidizing public housing construction; (ii) hidden subsidies; (iii) using subsidies that distort prices; and (iv) rent control.4 It has not been easy for many policymakers to break out of the traditional supply-side mentality. However, as experience with these newer principles has grown, policymakers and beneficiaries have gradually accepted them. While most countries today still continue to operate a range of supply-side programs, the newer approaches are often given a high priority by governments and donors when additional funding becomes available. IV: Program Descriptions This section focuses on capital grants and allowances targeted to poor households as these are the kinds of demand-side subsidies that are most likely to be recommended and implemented today in the housing sector. Capital grants and allowances typically have many of the characteristics of direct cash transfers. To simplify the following discussion, we focus on a few specific variants of these subsidies. These "models" will help to highlight the key theoretical advantages and disadvantages of the various kinds of subsidies. However, in practice, governments can alter and implement these approaches in ways that can have a profound impact on the actual effectiveness of the subsidies.5 In evaluating the relative merits of social assistance programs, it is particularly important to focus on targeting, efficiency, transparency, and administrative simplicity. There are several dimensions to targeting including the coverage of the poor and the distribution of the subsidies among those covered. Leakages to higher-income households are also an important targeting issue.6 A subsidy is efficient if it encourages market- compatible behavior, avoids price distortions, minimizes program costs, and discourages the waste created when households do not fully appreciate the value of the subsidies they receive. Demand-side solutions tend to be efficient because they offer a high degree of consumer choice, which helps achieve a high level of satisfaction among beneficiaries at the lowest possible cost. A subsidy is transparent when it is possible to clearly identify the beneficiaries as well as the cost of the subsidy. In general, demand-side subsidies that are given directly to households are more transparent than supply-side subsidies in which benefits trickle down through producers to households. Finally, administrative simplicity is yet another criterion to consider in evaluating subsidy approaches from an implementation 4 From table I in World Bank (1993). 5 It is important to understand that variations in the way programs are designed can produce outcomes that are not normally associated with a particular subsidy approach. For example, a program that gives a housing allowance as a direct cash transfer that forces a household to rent a unit from a limited selection of units may produce outcomes that differ little from a traditional supply-side program that discounts rents. In Russia, military personnel relocating from the Baltics were given capital grants to purchase new units but initially were largely forced to purchase units from builders with near monopoly control over new construction. This took away many of the advantages of this demand-side approach. 6 Exclusion errors occur when needy households fail to receive assistance. Inclusion errors occur when non- poor households are mistakenly given aid. The goal of policymakers is to minimize both types of error. 4 point of view, as administrative costs can have a major impact on the targeting and effectiveness of a subsidy. Capital grants and housing allowances are examples of demand-side subsidies, that is, subsidies that are given directly to households or directly paid to service providers on behalf of the households. We now look at each of these subsidies in turn. Capital Grants In the housing sector, capital grants are one-time subsidies to households that they can use to purchase, build, or complete (new or existing) units or to rehabilitate existing units.7 The grants are usually funded via an explicit appropriation process within the government's budget, which makes their cost transparent to the public. The fact that it is not necessary to seek repeated funding to assist a given pool of beneficiaries makes this kind of subsidy attractive to some politicians. On the other hand, capital grants often involve sizeable amounts of money per beneficiary, which can make it difficult for politicians to appropriate funding. To protect against fraud and waste, households may be given their grants in tranches according to what progress has been made or how much work has been completed. The amounts involved can range from the modest (for example, the cost of connecting a house to a utility) to the price of an entire dwelling (although typically not the entire cost). It is clear from table 1 that capital grants have been popular in South America but are less common in other countries. Latin American countries have tended to implement variations on the so-called "Chilean mnodel." This emphasizes government policies that: (i) shift the responsibility for housing production away from the government to the private sector; (ii) provide one-time grants for home purchase while curtailing all indirect subsidies; and (iii) institute transparent mechanisms for selecting beneficiaries based on household income and a savings contribution. The Latin American experience contrasts sharply with that of Europe and the United States, where demand-side programs have largely taken the form of allowances given to renters. Outside Latin America, the capital grant approach has occasionally been adopted not as an ongoing program but as a response to a particular problem. For example, in Russia, capital grants were used to re-house military personnel returning from the Baltic states, and in Armenia, they are currently being used to help earthquake victims to buy existing apartments. In South Africa, political pressure to improve the housing situation rapidly probably prompted the government to adopt the capital grants approach. Housing Allowances A housing allowance is a regular ongoing subsidy to households that offsets some of the costs of their housing and housing-related services. Allowances can be provided to either owners or renters, and they may be used for new or existing housing. Allowances can take two forms. Under one approach, the household receives a fixed subsidy based on norms of the typical prices prevailing in the housing market and must pay the difference between this amount and the total rent (or total housing-related expenditures) of its housing unit. As a result, each household's contribution will vary depending upon how successful it is in finding an economical unit. If the household finds an acceptable unit that costs less than the subsidy 7 They are also used in conjunction with housing finance programs to "buy down" the prices of units. The idea is to eliminate interest rate subsidies by lowering prices to the point where a household can afford a market rate loan for the difference. 5 amount, it may keep the remaining amount of the allowance. This approach gives households a powerful incentive to shop for the best housing deal. Table 1: Direct Demand-Side Subsidies by Country: 1996 Country Subsidy type Tenure Dates' Funding Ongoing programs Latin America Chile Capital grant Owner 1978-present National Costa Rica Capital grant Owner 1986-present National Colombia Capital grant Owner 1991-present National Uruguay Capital grant Owner 1991-present National El Salvador Capital grant Owner 1991-present National Chile Capital grant Owner 1978-present National Paraguay Capital grant Owner 1991-present National Western Europe Germany Allowance Owner/renter 1955-present National/local Sweden Allowance Renter 1930-present National/local United Kingdom Allowance Renter 1970-present Local Netherlands Allowance Renter 1970-present National/local France Allowance Renter 1948-present National/local Austria Allowance Renter 1960-present National/local Switzerland Allowance Renter 1950-present Local Norway Allowance Owner/renter 1960-present Nationallocal Finland Allowance Owner/renter 1941 -present National Denmark Allowance Renter 1955-present National Eastern Europe Poland Allowance Renter 1995-present National Czech Republic Allowance Owner/renter 1993-present National Slovakia Allowance Owner/renter 1997 National Estonia Allowance Renter 1994-present National Latvia Allowance Renter 1994-1995 National/local Lithuania Allowance Renter 1994-present National Ukraine Allowance Owner/renter 1995-present National Russian cities Allowance Renter 1994-present Local Other Australia Allowance Renter 1945-present National Canadian provinces Allowance Renter 1970-present Local South Africa Capital grant Owner 1996-present National United States Allowance Renter 1979-present National Limited-Time Programs Panama Capital grant Owner 1990 National Mexico Capital grant Owner 1985 National/World Bank Russia Capital grant Owner 1994-present United States/Russian national government a. This table was prepared in mid- 1996 and represents the situation at that time Source: Adapted from Conway and Mikelsons (1996), based on data contained elsewhere, including Howenstine (1986), Mikelsons (1996), World Bank (1985), and other sources. 6 Under the second approach, the government specifies a fixed amount of money that a household must pay towards its own housing costs (usually a percentage of its income) regardless of the total amount of its rent. The government pays the difference between what it deems that the household is able to pay and the rent (or total housing-related expenditures). Under this system, the size of the subsidy varies depending on the household's contribution. There is little incentive for a household to shop for a good deal because it pays the same amount under any scenario. In fact, a household has an incentive to find the most expensive eligible unit that it can find, making this a less cost-effective approach than the first. The attractiveness of this approach is that a household can be sure that it will have to pay no more than a fixed percentage of its income on its housing-related expenses. This approach is sometimes called a burden limit. Some housing allowance programs have features of both the norm-based and burden limit approaches. For example, the Russian housing allowance program sets a limit for acceptable housing expenses based on social norms and family size. An eligible family living in a unit that has more space than necessary according to the social norm for the family size will either have to relocate or pay the difference between the subsidy based on the norm and their total housing-related expenditures. However, the Russian program does not reward families that find an acceptable unit for less money than it is entitled to according to the social norm. Thus, the Russian program has the "stick" of the first approach but not the "carrot." It is like the second approach in that under no circumstances does it hand out cash to program beneficiaries. The size of subsidies under a housing allowance program is determined by "the gap formula." According to this formula, the subsidy amount is equal to the "payment standard" minus the household contribution (see box 1). The payment standard is usually tied to market prices and social norms. It can vary according to households' characteristics (for example, size) and geography and is often based on the gross rent concept, which includes rent and utilities. The household contribution is defined as a proportion of the household's income. Usually, the formula uses a measure based on adjusted income that takes into account the household's characteristics, tax liabilities, and assets. The gap formula makes it easy to see how, once income is defined, subsidy costs are sensitive to two variables that are within the control of policymakers-the payment standard and the percentage of income that a household must devote to its housing-related expenditures. Several points are worth noting about this formula. First, the same method applies whether the subsidy is used to assist households with their rental payments or their home purchase payments. Second, this methodology is equally applicable to the calculation of one- time capital grants. The principle is the same: a one-time subsidy equals a payment standard minus the household contribution. However, in this case, the payment standard may be the average price of a new dwelling or the cost of an upgrade, and the household contribution may be expressed as a factor of annual household income. Finally, accurate income data may not be available for the income variable in the formula. In this case, the household contribution may have to be determined using proxy measures or simply be decided by program administrators. 7 Box 1: The Gap Formula Subsidy Amount = Payment Standard - Household Contribution S =P - cY where: S = periodic subsidy payment P = payment standard The payment standard is typically based on: - social norms/market prices - household size or other characteristics/geographic price variation - gross rent (rent plus utilities) or any component of gross rent (for example, utilities only) cY = household contribution The household contribution has two components: - percentage of income devoted to housing-related expenditures (c) - household income (Y) which may be defined and adjusted in many ways Source: Authors A housing allowance, in spite of its name, represents one way to subsidize a variety of housing-related expenditures such as utilities and maintenance fees. In fact, many housing allowance programs are based on the concept of "gross housing expenditures," which, in addition to a rent component, usually includes fees for energy, water, sewage, and solid waste disposal. Conceptually, it is useful to think of housing as something that produces a "flow of services," which includes the services provided by utilities. In transition countries that have transferred ownership of large public housing stocks to sitting tenants, housing allowances often help households to pay for maintenance services and utilities rather than rent. Table 2 outlines the major parameters of three capital grant programs and one housing allowance program. Two of the capital grant programs (in Armenia and Panama) assisted disaster victims, and the third helped Russian military personnel to resettle in Russia after serving in the Baltic countries, while the housing allowance program was also in Russia. The number of beneficiaries in these three programs ranged from about 2,300 households (in Panama) to 5,000 households (in Russia). The maximum value of the subsidies provided varied tremendously (from just $3,000 in Armenia to $25,000 in Russia), which is a reflection of different market conditions and supply constraints. An incentive was included in the Armenian and Russian capital grant programs, as beneficiaries were allowed to retain the remaining amount of the subsidy that exceeded the price of their accommodation. The Panama example is interesting because participants in the program were allowed to combine their capital grant with other, less transparent subsidies. The Russian housing allowance program reminds us that it is possible to take more than one approach in any given country. This program does not provide very large monthly payments but does reach a larger number of poor households than Russia's resettlement grant program does. 8 Table 2: Program Examples Armenia Earthquake Russia Officer Panama Plan Chorrillo Russia Housing Zone Resettlement Allowances Purpose of program Provide housing for Provide housing in Rehouse families from Provide means-tested uncompensated victims Russia for military Chorrillo neighborhood assistance for monthly of 1988 earthquake officers resettled from of Panama City housing and utility fees bases in the Baltic destroyed by fire in 1990 countries Number of beneficiaries 300 (Pilot project) 5,000 (US-funded 2,300 Nationwide 3,000 (Extended program) approximately 6% of the program beginning in population, according to 2001) survey data Period 1998 to present 1993 to present 1991 - 1993 1995 to present Subsidy Maximum amount $ 3,000 $25,000 $6,750 Approximately $10 Amount paid out Subsidy (even in excess Subsidy (even in excess Lower of subsidy or monthly (in 1996) of sales price) of sales price) sales price [allowance is difference between the maximum social rent and the share of household income expected to be paid for rent] Other resources Supply-side subsidies No No Yes (for public housing No Construction financing No No only) No Loan financing No No Yes (for public housing No only) Orientation program Yes Yes Yes Yes Yes Eligible uses of subsidy New housing Yes (anywhere in the Yes (only in selected Yes (anywhere in the Yes Existing housing country) city or state) country) Yes Other Yes (anywhere in the Yes (only in selected Yes (anywhere in the country) city or state) country) Yes (long-term contract with retirement home) Eligible sources of housing Yes Yes Yes Yes Private developers Yes Yes No Yes State-owned housing Yes Yes Yes Yes Current owners No No No No Non-profit Sources: Struyk (1997), Conway and Mikelsons (1996), Urban Institute (2000), and Romanik and Struyk (1995). V: Program Design and Implementation Policymakers routinely introduce variations into the design of housing subsidy programs in response to philosophical, political, and resource constraints. As mentioned earlier, the model subsidy approaches we have discussed up until now can take on substantially different attributes depending on how they are implemented. Considerations about limited institutional capacity or the need to contain administrative costs may prompt policymakers to make compromises in the design and features of a program. In this section, we examine several interrelated design and implementation topics that have a significant impact on the targeting, 9 efficiency, and transparency of programs. We conclude with a brief discussion of ways to control administrative costs. Participation Rates To target subsidies effectively, policymakers must successfully enroll the intended beneficiary households in the program. For housing allowance and capital grant programs, participation involves more than simply enrolling in the program. Households must also find housing units that satisfy the program's requirements regarding quality and social norms before they can receive payments. In these programs, the participation rate (in other words, the share of eligible households that actually receive a subsidy) can be mathematically expressed as the product of the percentage of eligible households that enrolls in the program and the percentage of the enrolled households that qualifies to receive payments. It is helpful to think of participation in terms of a two-stage process because it suggests there are two chances for policymakers to manipulate the participation rate. Policymakers seeking to increase participation can intervene in a number of ways during the enrollment phase. An obvious way to increase enrollment is to increase the benefit level by raising the subsidy or reducing a household's expected contribution. Another approach is to improve outreach efforts by disseminating information through the media, community organizations, or social workers. Part of the outreach efforts may involve reducing the social stigma associated with accepting public assistance. Policymakers can also stimulate enrollment by reducing households' transaction costs. Enrollment remains low when people find it difficult to travel to the locations where they must apply to the program because of time constraints, transportation expenses, or a disability. Having to produce expensive documentation of their eligibility for the program (such as birth certificates or proof of residency) also increases their transaction costs and, thus, restricts enrollment. The need for documentation also introduces the possibility of corruption on the part of those who issue the required paperwork. Enrolling in a housing allowance or capital grant program does not ensure that an eligible household will receive a subsidy. This is because these programs typically require households to find a housing unit that meets minimum quality standards or social norms. For example, a household may have to move from its existing house to receive a housing allowance because, by the program's specifications, the existing unit is physically substandard or too small for the size of the family. If the burden of moving is too great relative to the benefits that they would receive from the program, then the household is likely to forego the subsidy and stay put. Improving the quality of housing and utility services for the poor may be a goal of the program, but policymakers must be aware that setting quality standards will increase the administrative costs and institutional capacity required for the program. Usually when minimum quality standards are part of a program's design, professional inspectors must be employed to verify that the beneficiary's unit meets these minimum standards. In Russia's housing allowance program, families are not required to prove that their houses meet particular quality standards; rather, they apply based on their existing housing. The most pressing need for poor Russian families is to cover their current housing expenses, not to improve their housing situation. However, in a country such as South Africa where the poor 10 historically have lived in substandard housing, the inclusion of quality standards may be a politically important aspect of the program. In a tight housing market, it can be extremely difficult for households to find affordable housing that meets a program's requirements even with their subsidies. By lowering quality standards or norms, policymakers can make more housing available to participants, but this can be controversial. Neither the sponsors nor the beneficiaries of allowance and capital grant programs may like the idea of the beneficiaries having to accept housing of lower quality than that enjoyed by the beneficiaries of other programs. Housing allowance and capital grant programs usually set a time limit on how long a household can take to search for a unit or to negotiate and complete a deal with a builder. After this time limit expires, the allowance or grant is then given to another household. Sometimes a deal with a landlord or developer falls apart but not because of the actions of the household. In these instances, households are usually given a second chance to qualify for their allowances or capital grants. Governments usually help people to find acceptable units, sometimes by working with private sector developers and brokers to assist prospective buyers or tenants. Also, governments can instigate media campaigns to attract landlords and builders and establish information centers where individuals, landlords, brokers, and developers can post listings. In situations where households are reluctant to use the services of brokers because they regard them as an unnecessary expense, the government must provide consumer education. In tight housing markets, this marketing assistance is critical to the success of a program. Housing programs can be fairly complicated. In most cases, participants and potential suppliers may need to be informed about how the program works and about any program- related obligations they may face. In countries where the population is not used to market- based transactions, beneficiaries may have difficulty negotiating deals with the private sector suppliers and may need additional counseling. In the case of home purchases using a capital grant, for example, an illiterate elderly beneficiary may require a high degree of "hand- holding" to negotiate legal and financial documents. Turnover and Recertification In designing or evaluating a housing subsidy program, policymakers cannot ignore the effect that turnover among beneficiaries has on the program's costs and outcomes. The only information available in many cases is a snapshot of how many households are participating in a program at a given moment. This snapshot, however, does not reveal how many households have participated or will participate over time. High turnover can increase the total number of beneficiaries to the point where it has a major impact on administrative costs, particularly the costs of outreach efforts and of certifying eligibility. Turnover in housing programs is influenced by external factors that are particular to a country, such as household mobility and the rate at which households move in and out of poverty over time. From the point of view of program design, such factors determine the frequency with which a program requires a household to reestablish its eligibility to receive assistance. There is a tradeoff between the costs of recertifying households and the savings generated by eliminating those who are no longer eligible for receiving benefits. There are administration costs incurred by the program as well as the time and other costs incurred by I1 the beneficiaries who must provide new documentation. While fairly frequent recertification would seem to be an obvious way to improve targeting, the costs of this are often prohibitive. Means Testing Housing allowances and capital grants can use means testing to determine eligibility, benefit levels, or both. Conducting means tests can improve the targeting of benefits substantially but can be difficult to implement administratively. Reliable income data are in short supply in many countries, especially when the poor obtain a large share of their income from informal sources. If means testing is used, the government must ensure that the poor can participate in the program despite the difficulty of verifying their income from these sources. Because reliable income and asset data are often nonexistent, some countries rely on proxy measures of income to determine eligibility and benefit levels. An income proxy is a non-monetary indicator that is assumed to be highly correlated with income. For example, the acreage of farmland owned by a household, the ownership of a car, or the volume of electricity consumed by a household all might be used to estimate a household's wealth. However, even the best proxy systems can suffer from substantial exclusion and inclusion errors.8 To minimize exclusion errors, the governments who use proxy systems usually establish some sort of procedure for protesting decisions about eligibility. Some governments reserve discretionary funds to help those whom the system may fail.9 Some countries may simply decide to rely on self-reported estimates of income combined with a system that attempts to verify as much information as possible within reason. This approach can be enhanced by imposing harsh legal penalties for lying and putting strong social pressure on applicants by educating the public about the program's eligibility requirements. In some programs, the names of beneficiaries are publicly posted, which results in a certain degree of public policing. When a government wants to use means testing, it has to weigh the tradeoffs between potential abuses by households in a self- reporting system and the limitations of a proxy income system. Despite these problems, means testing is the surest way to target subsidies to the poor. It is not surprising to find non-poor households benefiting from housing programs when eligibility is not tied to income. For example, programs that offer assistance to pensioners, veterans, civil servants, disaster victims, widows, or orphans cannot guarantee that benefits will go largely to poor households. In the case of housing, waiting lists may have been compiled with little regard to income, instead relying on criteria such as social norms for living space.'0 Waiting lists often suffer from transparency problems where it is not clear how a household moves up the list or why other households continue to be far down the queue. In designing new programs, it may be desirable to circumvent existing lists in favor of other eligibility criteria. 8 Some countries with proxy systems, such as Armenia, have a strong bias against inclusion errors. From a political perspective, failing to assist a truly needy household (in other words, an exclusion error) may be preferable to mistakenly allowing an undeserving household to benefit (in other words, an inclusion error), especially when there is a high level of government distrust. 9 Care must be taken to not give too much discretionary power to government bodies or the program may not be sufficiently transparent. 10 A social norm for living space is typically expressed in terms of square meters per person. A household occupying a housing unit with insufficient living space would be regarded as overcrowded. 12 Monitoring By monitoring key aspects of a program's performance, a government can gather the information that it needs to modify or fine-tune the program. The cost of this monitoring should be built into the project from the start. The government should define performance indicators in advance so arrangements can be made to collect the necessary data, including indicators on the beneficiaries as well as on the implementation and administration of the program. Information on beneficiary characteristics, subsidy costs, administrative costs, and other aspects of the program can be used to demonstrate the benefits, transparency, and cost- effectiveness of the program. ControllingAdministrative Costs. A recurring theme in this section is that the outcomes of the program depend a great deal on the institutional capacity of the government body responsible for its implementation. Building institutional capacity increases the administrative cost of programs. Outreach efforts, recertification, means testing, and monitoring all require substantial staff and resources. Funding is required for personnel, training, transportation, record-keeping systems, office space, and equipment. There are a number of ways to hold down administrative costs. In some instances, it may be possible to piggyback part of a housing program onto another government program. For example, a new program could take advantage of a means-testing system that is already in place for a general cash assistance program. A network of health social workers might be enlisted to disseminate information about a housing program. Governments can also enlist the aid of non-governmental organizations (NGOs) to educate consumers and perform outreach activities. VI: Determining an Appropriate Approach Finally, we describe the situations for which each of the various subsidy approaches is likely to be most effective. Table 3 summarizes the key advantages and disadvantages of the programs described in this report with respect to targeting, transparency, price distortion, institutional capacity, administrative costs, and funding. The table helps to highlight some of the tradeoffs that policymakers must make in selecting a particular approach. If economists and policymakers were to have their choice of an ideal approach to subsidizing housing expenditures, they would probably avoid programs earmarked for housing altogether in favor of a general means-tested cash benefit in which the subsidy is partly based on housing consumption norms. However, as noted at the outset, the desire by society or government to encourage consumption of these goods and the potentially high expense of these programs often makes this option impractical. Nevertheless, a government that already has a cash benefit program may want to consider the possibility of using it to deliver housing-related subsidies, especially if the subsidies are not large. A capital grant is a flexible transparent subsidy that does not distort prices. Capital grants can be used for any kind of housing-related expenditure, but they are often used to support homeownership in some manner. The main drawback of this approach is that it is often administratively complex and requires a considerable amount of institutional capacity (although less than an allowance program). The administrative burden is partly a function of 13 the size of the grant. Programs featuring larger subsidies typically require more sophisticated systems for enrollment, verifying eligibility, and monitoring. The one-time nature of the grant frees a government or donor from having to make a long-term commitment to the program, although grant programs can be operated on a sustained basis. Table 3: Summary of Key Program Attributes Program Type Program attribute Capital grant Allowance (norm-based) Allowance (burden limit) Targeting Good targeting potential depends Same. Same. on outreach, benefit levels, and other factors affecting enrollment and participation; coverage limited by budget constraints. Transparency High level of transparency; easy Same. Same. to identify costs and beneficiaries. Price Distortion No price distortion if household Little price distortion if Can strongly distort faces market prices for units or household faces market prices prices because the services provided by the private for units or services provided by household contribution sector. the private sector, and payment toward expenditures is standard is correctly set. fixed. Institutional Places fairly high demand on Same. Same. Capacity staff and other resources; requires skills and capabilities that may not presently exist. Administrative Similar to allowances, but Can be relatively high per Same as norm-based Costs somewhat simpler due to one- beneficiary due to outreach, allowance. time nature of subsidy. processing, and hand-holding requirements; ongoing nature requires institutional strengthening. Funding Does not require ongoing Requires ongoing funding; may Same as norm-based funding; subsidy costs can vary have to appropriate through allowance. depending on the size of grants, budget request; subsidy amounts which can range from the cost of depend on which housing-related a minor upgrade to the price of a services the program covers. new unit. Source: Authors and World Bank (1993) Capital grants have proven to be particularly useful in the aftermath of natural disasters, in supporting relocation efforts, and in complementing housing finance programs. Despite having a certain degree of administrative complexity, it is possible to put a grant program into operation fairly quickly. Because they can be used to purchase or rehabilitate existing units or to build new units, capital grants can be effective in both tight and loose housing markets. A capital grant program works best where there is a well-developed private sector that can readily supply and rehabilitate units. If a country has a housing finance system, a capital grant program can make market-rate loans affordable to households (by lowering the 14 principal on loans). By requiring households to make contributions, the subsidy level of the capital grant can be reduced. A housing allowance program is most likely to be acceptable in a relatively well-off country with a solid institutional capacity, secure tenure, and a relatively sound, high- quality housing stock. An allowance program is unlikely to be appropriate in a very poor country where the government may have trouble sustaining recurring subsidy payments and where there is not much support for providing cash assistance to renters or owners who remain in the substandard or informal housing that may make up a large share of the total housing stock. Also, housing allowances probably will not work well in tight housing markets in which the supply of affordable units is limited as they are not as effective as capital grants in directly encouraging new construction. Given these attributes, it is not surprising that, in the past decade, housing allowances have primarily been used in transition countries. In these countries, allowances form a part of the social safety net and are often intended to help protect households from reform-related increases in the prices of maintenance fees, utilities, and rent. All else being equal, a norm-based allowance is preferable to a burden-limit allowance because of the price distortions introduced under the burden-limit approach. The approaches are otherwise similar in that they are both transparent and have good targeting potential."I The expense of these programs, however, may make it necessary for the government to ration the subsidies, thus limiting the coverage of the poor. Also, many poor people may be discouraged from participating by low benefit levels, burdensome enrollment procedures, and other program requirements. The ongoing nature of allowances makes them more administratively complex than capital grants, and, in some countries with a lack of institutional capacity, this may deter some policymakers from adopting this approach. The on-budget nature of allowances may be politically difficult to accept, but the cost may be more palatable if the government can show that replacing inefficient traditional supply-side programs with allowances will generate savings. The high cost of many capital grant and housing allowance programs means they are not always useful ways to expand housing assistance to cover poor households, especially in low- income countries. Upgrading existing housing and infrastructure is usually the most cost- effective way to improve the living conditions of large numbers of geographically concentrated poor households, particularly in situations wlhere many of the poor occupy informal housing with insecure tenure. Some types of upgrading or renovation by individual households can be financed by small capital grants. However, upgrading many basic services (such as water supply, sanitation, and drainage) requires the cooperation of entire communities. Perhaps one of the best uses of capital grants and allowances is to help to phase out traditional supply-side programs. Capital grants and allowances can help a government to reduce its involvement in the direct production of housing and to encourage the development of the private sector. In replacing a direct construction program with a capital grant or allowance program, the government does not have to procure new funding. It can simply use the money it has already committed to the sector in a more efficient manner. " Targeting is usually less effective under the burden-limit approach, depending on the size of the subsidy and the responses of households to the price distortions introduced by this approach. 15 References Conway, Francis J., and Maris Mikelsons.1996. "A Review of Demand-Side Housing Subsidy Programs: The Case of Latin America." Report 06623-000-00. The Urban Institute, Washington, D.C. Howenstine, Jay E. 1986. "The Consumer Housing Subsidy Approach Versus Producer Housing Subsidies: An International Experience". Cities vol.3: 24-40. Fall. Mikelsons, Maris. 1996. Designing a Housing Allowance for Slovakia." Urban Institute for USAID, Washington, D.C. Processed. Romanik, Clare, and Raymond Struyk. 1995. "Assisting Demobilized Russian Officers Obtain Housing: The Housing Certificate Option." Review of Urban and Regional Development Studies 7 (1995): 97-118. Struyk, Raymond, ed. 1997. Restructuring Russia 's Housing Sector: 1991-1997. Washington, D.C.: The Urban Institute Press. Struyk, Raymond J., Michael L. Hoffman, and Harold M. Katsura. 1990. The Market for Shelter in Indonesian Cities. Washington, D.C.: The Urban Institute Press. Urban Institute. 2000. "Program Design for the Pilot Earthquake Zone Housing Certificate Program." Urban Institute for USAID, Washington, D.C. Processed. World Bank. 1993. "Housing: Enabling Markets to Work." Urban Development, World Bank Policy Paper. World Bank, Washington, D.C. 16 Social Protection Discussion Paper Series Titles No. Title 0233 Public Attitudes Matter: A Conceptual Frame for Accounting for Political Economy in Safety Nets and Social Assistance Policies by Carol Graham 0232 Ensuring Access to Essential Services: Demand-Side Housing Subsidies by Harold M. Katsura and Clare T. Romanik 0231 Gender and Risk in the Design of Social Protection Interventions by Kene Ezemenari, Nazmul Chaudhury, and Janet Owens 0230 Vulnerability and Poverty Measurement Issues for Public Policy by Jean-Yves Duclos 0229 Emerging from Ethnic Conflict: Challenges for Social Protection Design in Transition Countries by Christian Bodewig 0228 Child Work in Zambia: A Comparative Study of Survey Instruments by Niels-Hugo Blunch, Amit Dar, Lorenzo Guarcello, Scott Lyon, Amy Ritualo and Furio Rosati 0227 Strengthening Public Safety Nets from the Bottom Up by Jonathan Morduch and Manohar Sharma 0226 Incentives and the Role of Institutions in Provision of Social Safety Nets by Chris de Neubourg 0225 Food-Based Safety Nets and Related Programs by Beatrice Lorge Rogers, Ph.D. and Jennifer Coates, M.S. 0224 Subsidies as a Social Safety Net: Effectiveness and Challenges by Harold Alderman 0223 Assisting the Poor with Cash: Design and Implementation of Social Transfer Programs by Steven R. Tabor 0222 Effectiveness of Lending for Vocational Education and Training: Lessons from World Bank Experience by S. Canagarajah, A. Dar, R. Nording and D. Raju 0221 Participation of Children in Schooling and Labor Activities: A Review of Empirical Studies by Amit Dar, Niels-Hugo Blunch and Bona Kim Social Protection Discussion Paper Series Titles continued No. Title 0220 The World Bank and Children: A Review of Activities by Iqbal Kaur and Zafiris Tzannatos 0219 Managing Public Pension Reserves Part II: Lessons from Five Recent OECD Initiatives by Robert Palacios 0218 Guidelines for Assessing the Sources of Risk and Vulnerability by Karin Heitzmann, R. Sudharshan Canagarajah and Paul B. Siegel 0217 Czech Pension System: Challenges and Reform Options by Esperanza Lasagabaster, Roberto Rocha and Patrick Wiese 0216 Extending Social Protection to Informal Workers in the Horticulture Global Value Chain by Armando Barrientos and Stephanie Ware Barrientos 0215 Social Fund Support of Microfinance: A Review of Implementation Experience by Alexandra Gross and Samantha de Silva 0214 Income Support Systems for the Unemployed: Issues and Options by Milan Vodopivec and Dhushyanth Raju 0213 Social Protection @ Your Fingertips. Using Information & Communications Technologies in Social Protection by Knut Leipold 0212 Short-and Long-term Impacts of Economic Policies on Child Labor and Schooling in Ghana by Niels-Hugo Blunch, Sudharshan Canagarajah and Sangeeta Goyal 0211 Supporting and Expanding Community-Based HIV/AIDS Prevention and Care Responses: A Report on Save the Children (US) Malawi COPE Project by Susan S. Hunter 0210 World Vision's Experience Working with HIV/AIDS Orphans in Uganda - 1990-1995 by Joe Muwonge 0209 The Reformed Pension Systems in Latin America by Jose E. Devesa-Carpio and Carlos Vidal-Melia Social Protection Discussion Paper Series Titles continued No. Title 0208 Mandatory Annuity Design in Developing Economies by Suzanne Doyle and John Piggott 0207 Long-Term Welfare and Investment Impact of AIDS-Related Changes in Family Composition: Evidence from Uganda by Klaus Deininger, Anja Cromrmelynck and Gloria Kempaka 0206 Child Labor Handbook by Alessandro Cigno, Furio C. Rosati and Zafiris Tzannatos 0205 An Overview of Labor Markets World-Wide: Key Trends and Major Policy Issues by Gordon Betcherman 0204 Options of Public Income Support for the Unemployed in the Philippines and Social Protection by Jude H. Esguerra, Makoto Ogawa, and Milan Vodopivec 0203 Unemployment Insurance and Unemployment Assistance: A Comparison by Wayne Vroman 0202 Does Eurosclerosis Matter? Institutional Reform and Labor Market Performance in Central and Eastern European Countries in the 1990s. by Michelle Riboud, Carolina Sanchez-Paramo and Carlos Silva-Jauregui 0201 Pension Reform and Capital Markets: Are There Any (Hard) Links? by Eduardo Walker and Fernando Lefort 0131 Child Labor, Nutrition and Education in Rural India: An Economic Analysis of Parental Choice and Policy Options by Alessandro Cigno, Furio Camillo Rosati and Zafiris Tzannatos 0130 Social Protection and the Informal Sector in Developing Countries: Challenges and Opportunities by Sudharshan Canagarajah and S.V. Sethuraman 0129 Chile's Pension Reform After 20 Years by Rodrigo Acufia R. and Augusto Iglesias P. 0128 Labor Market Regulation: International Experience in Promoting Employment and Social Protection by Gordon Betcherman, Amy Luinstra, and Makoto Ogawa Social Protection Discussion Paper Series Titles continued No. Title 0127 Generational Accounting and Hungarian Pension Reform by R6bert I. Gal, Andras Simonovits and Geza Tarcali 0126 Orphans and Other Vulnerable Children: What role for social protection? edited by Anthony Levine 0125 Child Farm Labour: The Wealth Paradox by Sonia Bhalotra and Christopher Heady 0124 What Can Be Done about Child Labor? An overview of resent research and its implications for designing programs to reduce child labor by Bj0rne Grimsrud 0123 Measuring and Analyzing Child Labor: Methodological Issues by Bj0me Grimsrud 0122 Family-Controlled Child Labor in Sub-Saharan Africa-A Survey of Research by Jens Christopher Andvig 0121 Is Child Work Necessary? by Sonia Bhalotra 0120 The Cost and Benefits of Collective Bargaining: A Survey by Toke Aidt and Zafiris Tzannatos 0119 The Informal Sector Revisited: A Synthesis Across Space and Time by Niels-Hugo Blunch, Sudharshan Canagarajah and Dhushyanth Raju 0118 Social Services Delivery through Community-Based Projects by Dinah McLeod and Maurizia Tovo (available in Spanish) 0117 Eamings Inequality in Transition Economies of Central Europe Trends and Patterns During the 1990s by Jan J. Rutkowski 0116 Viewing Microinsurance as a Social Risk Management Instrument by Paul B. Siegel, Jeffrey Alwang and Sudharshan Canagarajah 0115 Vulnerability: A View from Different Disciplines by Jeffrey Alwang, Paul B. Siegel and Steen L. Jorgensen 0114 Individual Accounts as Social Insurance: A World Bank Perspective by Robert Holzmann and Robert Palacios Social Protection Discussion Paper Series Titles continued No. Title 0113 Regulating Private Pension Funds' Structure, Performance and Investments: Cross-country Evidence by P.S. Srinivas, Edward Whitehouse and Juan Yermo 0112 The World Bank and the Provision of Assistance to Redundant Workers: Experience with Enterprise Restructuring and Future Directions by Yi Chen 0111 Labor Markets in Transition Economies: Recent Developments and Future Challenges by Mansoora Rashid and Jan Rutkowski 0110 Operating Instruction Included: A Review of Social Investment Fund Operations Manuals by Juliana Weissman 0109 Risk and Vulnerability: The Forward Looking Role of Social Protection in a Globalizing World by Robert Holzmann 0108 Australia's Mandatory Retirement Saving Policy: A View from the New Millennium by Hazel Bateman and John Piggott 0107 Annuity Markets and Benefit Design in Multipillar Pension Schemes: Experience and Lessons from Four Latin American Countries by Robert Palacios and Rafael Rofman 0106 Guide for Task Teams on Procurement Procedures Used in Social Funds by Jorge A. Cavero Uriona 0105 Programmes Actifs Pour Le Marche Du Travail: Un Aper,u General Des Evidences Resultant Des Evaluations by Zafiri's Tzannatos and Amit Dar 0104 Kazakhstan: An Ambitious Pension Reform by Emily S: Andrews 0103 Long-tern Consequences of an Innovative Redundancy-retraining Project: The Austrian Steel Foundation by Rudolf Winter-Ebmer 0102 Community Based Targeting Mechanisms for Social Safety Nets by Jonathan Conning and Michael Kevane (available in Spanish) Social Protection Discussion Paper Series Titles continued No. Title 0101 Disability and Work in Poland by Tom Hoopengardner 0024 Do Market Wages Influence Child Labor and Child Schooling? by Jackline Wahba 0023 Including the Most Vulnerable: Social Funds and People with Disabilities by Pamela Dudzik and Dinah McLeod 0022 Promoting Good Local Governance through Social Funds and Decentralization by Andrew Parker and Rodrigo Serrano 0021 Creating Partnerships with Working Children and Youth by Per Miljeteig 0020 Contractual Savings or Stock Market Development. Which Leads? by Mario Catalan, Gregorio Impavido and Alberto R. Musalem 0019 Pension Reform and Public Information in Poland by Agnieszka Chlon 0018 Worker Reallocation During Estonia's Transition to Market: How Efficient and How Equitable? by Milan Vodopivec 0017 How Poor are the Old? A Survey of Evidence from 44 Countries by Edward Whitehouse 0016 Administrative Charges for Funded Pensions: An International Comparison and Assessment by Edward Whitehouse 0015 The Pension System in Argentina: Six years after the Reform by Rafael Rofman 0014 Pension Systems in East Asia and the Pacific: Challenges and Opportunities by Robert Holzmann, Ian W. Mac Arthur and Yvonne Sin 0013 Survey of Disability Projects. The Experience of SHIA, Swedish International Aid for Solidarity and Humanity by Kaj Nordquist Social Protection Discussion Paper Series Titles continued No. Title 0012 The Swedish Pension Reform Model: Framework and Issues by Edward Palmer 0011 Ratcheting Labor Standards: Regulation for continuous Improvement in the Global Workplace by Charles Sabel, Dara O'Rourke and Archon Fung 0010 Can Investments in Emerging Markets Help to Solve the Aging problem? by Robert Holzmann 0009 International Patterns of Pension Provision by Robert Palacios and Montserrat Pallares-Miralles 0008 Regulation of Withdrawals in Indlividual Account Systems by Jan Walliser 0007 Disability Issues, Trends and Recommendations for the World Bank by Robert L. Metts 0006 Social Risk Management: A New Conceptual Framework for Social Protection and Beyond by Robert Holzmann and Steen J0rgensen 0005 Active Labor Market Programs: Policy Issues for East Asia by Gordon Betcherman, Amit Dar, Amy Luinstra, and Makoto Ogawa 0004 Pension Reform, Financial Literacy and Public Information: A Case Study of the United Kingdom by Edward Whitehouse 0003 Managing Public Pension Reserves Part I: Evidence from the International Experience by Augusto Iglesias and Robert J. Palacios 0002 Extending Coverage in Multi-Pillar Pension Systems: Constraints and Hypotheses, Preliminary Evidence and Future Research Agenda by Robert Holzmann, Truman Packard and Jose Cuesta 0001 Contribution pour une Strategie de Protection Sociale au Benin by Maurizia Tovo and Regina Bendokat Social Protection Discussion Paper Series Titles continued No. Title * The papers below (No. 9801-9818 and 9901-9934) are no longer being printed, but are available for download from our website at www.worldbank.org/sp 9934 Helping the Poor Manage Risk Better: The Role of Social Funds by Steen J0rgensen and Julie Van Domelen 9933 Coordinating Poverty Alleviation Programs with Regional and Local Governments: The Experience of the Chilean Social Fund - FOSIS by Jorge C. Barrientos 9932 Poverty and Disability: A Survey of the Literature by Ann Elwan 9931 Uncertainty About Children's Survival and Fertility: A Test Using Indian Microdata by Vincenzo Atella and Furio Camillo Rosati 9930 Beneficiary Assessment Manual for Social Funds by Lawrence F. Salmen 9929 Improving the Regulation and Supervision of Pension Funds: Are There Lessons from the Banking Sector? by Roberto Rocha, Richard Hinz, and Joaquin Gutierrez 9928 Notional Accounts as a Pension Reform Strategy: An Evaluation By Richard Disney 9927 Reform Options for Pay-As-You-Go Public Pension Systems by Sheetal K. Chand and Albert Jaeger 9926 An Asset-Based Approach to Social Risk Management: A Conceptual Framework by Paul Siegel and Jeffrey Alwang 9925 Migration from the Russian North During the Transition Period by Timothy Heleniak 9924 Pension Plans and Retirement Incentives by Richard Disney and Edward Whitehouse 9923 Shaping Pension Reform in Poland: Security Through Diversity by Agnieszka Chlon, Marek G6ra and Michal Rutkowski Social Protection Discussion Paper Series Titles continued No. Title 9922 Latvian Pension Reform by Louise Fox and Edward Palmer 9921 OECD Public Pension Programmes in Crisis: An Evaluation of the Reform Options by Richard Disney 9920 A Social Protection Strategy for Togo by Regina Bendokat and Maurizia Tovo 9919 The Pension System in Singapore by Mukul G. Asher 9918 Labor Markets and Poverty in Bulgaria by Jan J. Rutkowski 9917 Taking Stock of Pension Reforms Around the World by Anita M. Schwarz and Asli Demirguc-Kunt 9916 Child Labor and Schooling in Africa: A Comparative Study by Sudharshan Canagarajah and Helena Skyt Nielsen 9915 Evaluating the Impact of Active Labor Programs: Results of Cross Country Studies in Europe and Central Asia by David H. Fretwell, Jacob Benus, and Christopher J. O'Leary 9914 Safety Nets in Transition Economies: Toward a Reform Strategy by Emily S. Andrews and Dena Ringold 9913 Public Service Employment: A Review of Programs in Selected OECD Countries and Transition Economies by Sandra Wilson and David Fretvell 9912 The Role of NPOs in Policies to Combat Social Exclusion by Christoph Badelt 9911 Unemployment and Unemployment Protection in Three Groups of Countries by Wayne Vroman 9910 The Tax Treatment of Funded Pensions by Edward Whitehouse Social Protection Discussion Paper Series Titles continued No. Title 9909 Russia's Social Protection Malaise: Key Reform Priorities as a Response to the Present Crisis edited by Michal Rutkowski 9908 Causalities Between Social Capital and Social Funds by Jesper Kammersgaard 9907 Collecting and Transferring Pension Contributions by Rafael Rofman and Gustavo Demarco 9906 Optimal Unemployment Insurance: A Guide to the Literature by Edi Kami 9905 The Effects of Legislative Change on Female Labour Supply: Marriage and Divorce, Child and Spousal Support, Property Division and Pension Splitting by Antony Dnes 9904 Social Protection as Social Risk Management: Conceptual Underpinnings for the Social Protection Sector Strategy Paper by Robert Holzmann and Steen Jorgensen (available in Russian) 9903 A Bundle of Joy or an Expensive Luxury: A Comparative Analysis of the Economic Environment for Family Formation in Western Europe by Pierella Paci 9902 World Bank Lending for Labor Markets: 1991 to 1998 by Amit Dar and Zafiris Tzannatos 9901 Active Labor Market Programs: A Review of the Evidence from Evaluations by Amit Dar and Zafiris Tzannatos 9818 Child Labor and School Enrollment in Thailand in the 1990s By Zafiris Tzannatos 9817 Supervising Mandatory Funded Pension Systems: Issues and Challenges by Gustavo Demarco and Rafael Rofman 9816 Getting an Earful: A Review of Beneficiary Assessments of Social Funds by Daniel Owen and Julie Van Domelen 984f5 This paper has been revised, see Discussion Paper No. 9923 9814 Family Allowances by Suzanne Roddis and Zafiris Tzannatos Social Protection Discussion Paper Series Titles continued No. Title 9813 Unemployment Benefits by Zafiris Tzannatos and Suzanne Roddis 9812 The Role of Choice in the Transition to a Funded Pension System by Robert Palacios and Edward Whitehouse 9811 An Alternative Technical Education System: A Case Study of Mexico by Kye Woo Lee 9810 Pension Reform in Britain by Edward Whitehouse 9809 Financing the Transition to Multipillar by Robert Holzmann 9808 Women and Labor Market Changes in the Global Economy: Growth Helps, Inequalities Hurt and Public Policy Matters by Zafiris Tzannatos 9807 The World Bank Approach to Pension Reform by Robert Holzmann 9806 Government Guarantees on Pension Fund Returns by George Pennacchi 9805 The Hungarian Pension System in Transition by Robert Palacios and Roberto Rocha 9804 Risks in Pensions and Annuities: Efficient Designs by Salvador Valdes-Prieto 9803 Building an Environment for Pension Reform in Developing Countries by Olivia S. Mitchell 9802 Export Processing Zones: A Review in Need of Update by Takayoshi Kusago and Zafiris Tzannatos 9801 World Bank Lending for Labor Markets: 1991 to 1996 by Amit Dar and Zafiris Tzannatos Summary Findings This paper examines the strengths and weaknesses of demand-side subsidy approaches for improving poor households' access to housing I services. It begins with a discussion of the rationale for stand-alone housing assistance programs and a description of the ongoing transition away from traditional supply-side housing assistance to demand-side subsidies. The paper presents model demand-side approaches, but also draws on real world examples to highlight various aspects of program design related to targeting, transparency, price distortion, institutional capacity, administrative complexity, and funding. It also ( describes how variations in the design of housing-related subsidy programs can appear in response to philosophical, political, and resource considerations. The paper concludes with a discussion of the appropriateness of different subsidy approaches for various § situations. HUMAN DEVELOPMENT NETWORK About this series..." The World Bank Social Safety Nets Primer is intended to provide a practical resource for those engaged in the design., and implementation of safety: net progranis around the world. Reader's will find information on good practices for a- variety of types of interventions,coun'try contexts, themes and target groups, as well-as current thinking of specialists ' and practitioners on the role of social safety nets in the broader development agenda. Primer papers are designed to reflect a high standard of quality as well as a degree of consensus amgng the World Bank safety nets team and general practitioners on good practice arnd policy. Primer topics are initially reviewed by a steering committee composed of both World Bank and outside specialists, and draft papers are subject to peer review for quality control. Yet'the.format of the series is flexible enough to reflect important developments in the field in a timely fashion. The primer series contributes to;ihe teaching matefials covered in the annual Social Safety Nets course offered in Washington, DC, as well as vari'ous other Bank-sponsored courses. The Social Safety NetswPrimer and the annual course are jointly supported by the Social Protection unit of the Human Development Network and by the World Bank Institute. The World Bank Institute also offers customized regional,courses through Distance Learning on a regular basis. For more information on the prirner paper series and papers on other safety nets topics, please contact the Social Protection Advisory Service; telephone (202) 458-5267; fax (202) 614-0471; email: socialprotection@worldbank.org. Copies of related safety nets pa~pers, incliuding the Social Safety Nets Primer series, are available in electronic form at www.worldbank.org/safetynets.'The website also contains translated versions of the papers as they become available.' An ambitious translation plan is underway (especially for Spanish and French, some in Russian). For more information about WBI courses on social safety nets, please visit the website www.worldbank.org/wbi/socialsafetynets.