The Government of Chile was concerned that although the share of the population below the poverty line had declined during the 1990’s, the share in extreme poverty persisted. Analytical work suggested that an important determinant of persistent extreme poverty was exclusion from a variety of networks that provided access to public and private risk mitigation instruments.
Although Chile’s social protection institutions were relatively strong and well run, several weaknesses in the social protection system were making it harder for the government to address exclusion. Some of these weaknesses included:
- The inefficient use of available information.
- Weakness of the targeting instrument..
- Gaps in monitoring and evaluation of social programs and policies.
- Coordination failures at both the national and subnational levels.
In addition to poverty assessments, an analysis of the social protection system, Chile: Household Risk Management and Social Protection, informed the reforms supported by this project and the accompanying adjustment operation. The Social Protection Technical Assistance Loan ensured adequate financing and advice during the implementation of the policy reforms supported by the Social Protection Sector Adjustment Loan.
The project supported the progress made by Chile in moving from isolated interventions to a coherent, connected portfolio of programs, under a systems approach. Over the life of the project, programs improved communications, shared to a greater extent common administrative subsystems, and worked together to respond to risks and to deliver resilience, equity and opportunity to the extremely poor population.
The following results were particularly important:
- Development of a legal framework for the inter-sectoral social protection system.
- Implementation of specific mechanisms and administrative arrangements to promote coordination including inter-institutional agreements, national budgeting procedures, an integrated social information system and registry of beneficiaries through which information is exchanged among nearly 40 public and private agencies. Use of the targeting instrument was extended to other programs.
- Improvement of the take-up of transfers and programs. The results from the impact evaluations show in the short-run an improvement in the take-up of transfers and other programs, and improved education and health outcomes. The medium-term results of the program indicate positive effects on employment and income for some groups of families, as well as gains in living standards, including more stable housing conditions. Results from the longer-term evaluation show benefits in particular for those who had been excluded from the social network as well as benefits from the progressive improvements on the supply side.