Resource information
The objective of this study is to help
the government to decide what role safety net and transfer
programs should play in the coming 5 to 10 years. It seeks
to answer following three questions: (i) can increased
spending on transfers accelerate poverty reduction in the
medium to long term?; (ii) which groups and aspects of
poverty will it make sense to target with transfers?; and
(iii) which programs will have the greatest impact at an
affordable cost? This study examined such programs in
Lesotho both ones that currently exist, and the potential
scope for using instruments that may not currently exist. It
also widened its scope to examine all programs that transfer
public resources directly to households such as agricultural
subsidies and university bursaries. It analyzed them through
the lens of their impact on the poor because it is important
to evaluate public spending and trade-offs in the context of
where public funds are currently being spent and what
distributional impact they are having. The assumption
underlying this analysis throughout the report is that the
over-riding objective of both the government and its
development partners is to reduce the high levels of poverty
and inequality that persist in Lesotho. This report is
organized as follows: chapter one explores the country
context and fiscal space for public expenditure on social
safety nets. Chapter two examines the dynamics of poverty in
Lesotho and the characteristics of the major vulnerable
groups and discusses which of these groups it will make most
sense for the social safety net to target. Chapter three
analyzes Lesotho's existing transfer programs. Chapter
four reviews institutional and capacity issues. Chapter five
presents options for a long-term package of social safety
nets and associated costs, makes some recommendations for
strengthening existing programs, and suggests which type of
programs it might be cost-effective to expand.
