Social Safety Net Primer Series Incentives and the Role of Institutions in the Provision of Social Safety Nets

Institutions matter in the design and implementation of social programs in general and for social safety net programs in particular. This paper argues that what matters most for the success of programs are the incentives that are provided to stakeholders and actors through institutions. The paper critically examines the effects of different incentive structures that operate between program providers and the sponsors of programs and between providers and clients, illustrated with reference to developed and developing country examples. In light of these incentive effects, the paper then examines possible strategies for safety net implementation under three distinct institutional settings, including limited institutional capacity, nascent development, and more mature environments.