The National Poverty Targeting Program
What is the National Poverty Targeting Program (NPTP)?
The National Poverty Targeting Program (NPTP) was launched in 2011 by the Government of Lebanon (GOL) with technical and financial assistance from the World Bank.[1] It is the only poverty-targeted social safety net program in Lebanon for the poorest and most vulnerable Lebanese families. The NPTP targets extreme poor Lebanese households, defined as households who are unable to meet their basic food needs.[2]
Today, the NPTP reaches 43,000 households. However, the current economic and financial crisis could put more than 155,000 households (850,000 individuals, equivalent to 22% of the Lebanese population) under the extreme poverty line; and 356,000 households (1.7 million individuals, equivalent to 45% of the Lebanese population) under the upper poverty line.[3]
The NPTP is managed by the Ministry of Social Affairs (MoSA) and the Presidency of the Council of Ministers (PCM) and relies on the proxy-means testing (PMT) targeting method.
What is the Targeting Methodology used in the NPTP?
The NPTP relies on a scientific method of targeting named the Proxy-Means Testing (PMT) method. The PMT is a methodology that relies on the collection of easily verifiable and measurable household characteristics to calculate and predict a household’s welfare score. Selected variables are multiple and difficult for the household to manipulate or hide and jointly predict household welfare. In order to select the most appropriate variables, a relationship is established between them and the welfare measure. The most common approach is to rely on simple regression analysis based on household budget surveys and welfare aggregates used to measure poverty. Regressions explain the variation in logarithm of total consumption (or expenditure) per capita by selected explanatory variables.
In developing the PMT model, typically many model specifications are considered in order to find the model with the best predictive power (measured by highest R-squared) and accuracy in identifying the poor. The PMT method allows the ranking of all applicants by welfare ranging from the lowest score (poorest) to highest score (less poor).
In the MENA region, the following countries employ the PMT method in their main social safety net (SSN) programs: Morocco, Algeria, Jordan, Egypt, Kingdom of Saudi Arabia, Palestine, Tunisia, Yemen and Lebanon. Globally, close to 40 countries use the PMT method.
How was the PMT for the Lebanon National Poverty Targeting Program (NPTP) calculated?
The first PMT formula in Lebanon was developed based on the 2004/2005 household budget survey (HBS). The second formula was developed using the 2011-12 HBS data and all beneficiaries were recertified using the new formula in 2018. The formula development was carried out by the World Bank, in close cooperation with national counterparts including MOSA, PCM and the Central Administration of Statistics (CAS). The Lebanon formula has high targeting performance by construction and by international standards.
What variables does the PMT formula include?
The variables included in the final PMT formula are more than 40 variables and include region of household’s home, quality of occupied dwelling, demographic structure of the household, assets availability, labor force status and occupation for the adults, among others (see NPTP PMT Questionairre).
In addition, specific categories of vulnerability included in the model are: number and share of children, number and share of elderly, number of unemployed, number of disabled members, female-headed households, head of household is widowed/ divorced/ separated.
How was the PMT Implemented in Lebanon?
1. Data collection starts with the completion of a two-page application form by interested applicants at a local Social Development Centers (SDCs). The application form consists of name, age, and address information of each of the members of the applicant household. Households also need to submit the basic documents required for verification of such information including ID cards or birth certificates.
2. Social workers are subsequently dispatched to the household homes to administer the pre-designed PMT questionnaire which includes the variables that are determinants of welfare in the PMT formula.
3. Household data is then entered into a unified household data base which is transferred to the NPTP Central Management Unit at the Presidency of the Council of Ministers (CMU-PCM).
4. CMU-PCM applies verification and consistency checks to the household data, i.e. cross-checking information with registries from other ministries and institutions.
5. Once data is verified, CMU-PCM computes Welfare Scores by applying the PMT formula to household data, and ranks households based on their score from the poorest to the least poor. All households under a certain score representing the extreme poverty line in Lebanon are deemed eligible to receive NPTP benefits.
How many people benefit from the NPTP today?
NPTP cards (Hayat Card) are issued to those scored under the extreme poverty line. Today, of the 140,000 households (580,000 individuals) in the database, 43,000 households carry the Hayat Card (entitled to access free health and education services). Of these, the poorest 15,000 households receive the e-card food voucher (debit card).
Does the current NPTP Database capture the Poor?
Yes, the current database is very well targeted in that 80 percent of the individuals in the database belong to the poorest bottom 30 percent of the population. This performance is among the top compared to other countries in the world. However, the program only reaches 25% of the current extreme poor households. Hence, there is an urgent need to scale up the program to include all extreme poor (155,000 households), as well as expand the database.
How can the NPTP Database be expanded?
New beneficiaries need to be added to the database through the solicitation of applications using the same PMT questionairre. In light of COVID19 (which prevents ability to conduct household visits), solicitation of new applications should be done online and/or over the phone through an outsourced independent entity. Once the COVID19 restrictions are lifted, verification of beneficiaires should be conducted (options include: full-sweep verification of all; household visits for a random sample of households; or risk-based profiling tools to focus on likely cases of error/ fraud.)
What is the regional distribution of beneficiaries in the NPTP database?
Today, the 43,000 beneficiaries are distributed as follows:
- 41.4% in North Lebanon
- 29.6% in Bekaa
- 16.1% in Mount Lebanon
- 8.0% in South Lebanon
- 4.5% in Nabatiyeh
- 0.4% in Beirut
[1] The World Bank has provided technical assistance and financial support ($25 million) through four emergency grant project – the First and Second Emergency Social Protection Implementation Support Projects ($1 million and $6 million, 2007 and 2011, respectively), and the Emergency NPTP ($8.2 million, 2014) and NPTP Additional Financing ($10 million, 2016).
[2] The standard international approach for setting a poverty line - which is followed in Lebanon by the CAS - is the cost-of-basic-needs approach (CBN). To estimate the extreme poverty line, a minimal nutrition requirement for healthy living is identified - usually defined in terms of minimal caloric requirements. Households whose consumption expenditure falls below this line are considered extreme poor. To estimate the upper poverty line, a non-food component is added to the food poverty line (rents, durables, education, health etc.), and households whose consumption expenditure falls below this line are considered poor.
[3] World Bank estimates