The Static and Dynamic Incidence of Vietnam's Public Safety Net

What are the outcomes for the poor of Vietnam’s public safety net? Although centrally mandated, social welfare programs are locally implemented according to local norms and local poverty standards, and are often heavily reliant on local financing. This paper examines the coverage, incidence and horizontal equity of the programs that can be identified in the VNLSS data. The paper looks at the role of location in determining whether the poor are assisted nationally. Dynamic incidence between 1993 and 1998 is explored, as is the degree to which programs performed a safety net function. Coverage and payments to households are found to be low and to have had negligible impact on poverty. The impact of current outlays could in principle also be improved through better targeting. The system was also ineffective in protecting households who were vulnerable to shocks. Finally, although there is a greater concentration of poverty-related programs and household participation in poorer communes, the results suggest that more is spent absolutely and relatively on the poor in richer communes. 1 Correspondence: [email protected] These are the views of the author and do not necessarily reflect those of the World Bank. Special thanks go to Dorothyjean Cratty. Helpful comments were received from Paul Glewwe, Jennie Litvack, Martin Ravallion, and participants at the May 2001 research workshop Economic Growth and Household Welfare in Hanoi. The support of the World Bank's Research Committee is gratefully acknowledged.