Rema Hanna on Delivering Public Services in Developing Countries

by Doug Gavel, interviewed 10/31/13

Understanding how to improve the delivery of public services in developing countries has long been a challenge for citizens, NGOs and international development scholars. Harvard Kennedy School Associate Professor Rema Hanna has focused much of her writing and research on testing models of corruption and bureaucratic absenteeism in the field in hopes of better understanding how discrimination affects disadvantaged minority groups. Her current field project is designed to learn what types of individuals are selected to receive social programs under different forms of targeting mechanisms.

Q: Please tell us more about your current field projects.

Hanna: In collaboration with the government of Indonesia, I have been working on a series of projects concerning how to better identify the poor in order to provide them with essential public services. In developing countries, this is not very easy to do. In the U.S., there’s a formal system in place, and so if somebody loses their job, there are ways to track their unemployment. If somebody is earning wages below the poverty line, we provide services through the tax system. In developing countries, where an informal economy is often the norm and there are no paper records, it’s extremely hard to figure out who’s actually poor, in order to be able to help them. So much of the work I’ve been doing is figuring out different cost-effective methodologies to best identify the poor who qualify for social services, and then, once identified, making sure that they actually receive those services.

Q: Please discuss the ID program that you’ve been working on in Indonesia.

Approximately two years ago, after thinking through how to better identify the poor, we began to come to terms with another challenge – that many of the poor didn’t actually know that they were eligible for social programs. So, for example, in the food subsidy distribution program in Indonesia, called Raskin, our surveys indicated that only 30 percent of people who were eligible for the subsidized rice knew that they were actually eligible for the program. The government of Indonesia was very motivated to improve access to information and to ensure that citizens were cognizant of their rights. Our idea was to test whether or not by issuing personal ID cards that identified individuals who were eligible for specific social protection programs would increase knowledge of eligibility status, and also allow people to better negotiate and be able to apply for the social programs that they actually deserve.

Q: One of your previous projects investigated the impact of so-called “elite capture” on the allocation of targeted government welfare programs in Indonesia. Tell us about your analysis.

In the development sector, we tend to be very skeptical about local leaders. Because of fears of corruption, they tend to be excluded from the development process. So, for example, there is a big emergence of community-driven development projects in which local village leaders are bypassed entirely. But at the same time, in doing so, you might actually be harming the village because these local leaders often possess very valuable and essential skills, so if you are not investing in their skills at the lower level, you might end up with very untrained leadership at the higher levels of government.

One of the things we wanted to better understand is whether or not there was a lot of “elite capture” taking place at the local level. So within Indonesia’s major aid programs for the poor we tested how much of it is being lost to elite captures – how much village leaders are taking for themselves and their relatives. And we did find some of this activity occurring, but it was relatively small. Most of the error that was actually occurring was due to the difficulty in administrating these programs; collecting data at a large scale to figure out who’s actually poor is difficult. The data is not perfect, and a lot of the administrative challenges of running these programs in the field were actually quite large, and if you can solve the administrative problems rather than just focusing on elite capture, you might better improve the efficacy of these services. And at the same time, if we adjust our thinking regarding the levels of corruption among village leaders, and, instead, invest in their skills, we might end up with a better-functioning bureaucracy.

Q: Out of curiosity, why Indonesia? Is there something special about it that you’re using it for research purposes?

I started working in Indonesia about eight years ago. It was a bit by chance. I was approached by the IFC, the International Finance Corporation, which is a part of the World Bank, to evaluate some of their technical assistance programs. There was a program that seemed really interesting in Indonesia, and I started working on that project, and as I started working more in the country, I became quite fascinated by it. I’ve met a lot of very interesting people, there are many interesting projects to work on, and there’s been a real openness on the part of the Indonesian government to really begin thinking about evidence, and how can you use evidence for policymaking.

Q: Considering your work in Indonesia, are there other countries that are dealing with these same challenges but offer up solutions which could be applicable elsewhere?

I think many countries are struggling with these similar issues. One of the most renowned social programs, Progressa in Mexico, is one example of a very effective targeted transfer program. These targeted transfer programs are an essential part of poverty reduction strategies in many countries. With respect to Indonesia’s point of view, I think there are lessons to be learned from the Latin American countries who are leaders in this area – Mexico with the Progressa, and Brazil with Bolsa Familia. But in terms of thinking through very specific targeting strategies I do believe that the Indonesian government has been quite innovative in its thinking about how to improve their methodologies, to really think about how to best identify the poor when it’s expensive to do so, and it’s difficult, and so, I think Indonesia has become a leader in this area and can hopefully share their findings with other countries.

Q: How is your research having an impact on policy?

: From the start, I have been working very closely with government partners – for example, organizations such TNP2K and the State Ministry of National Development Planning and with the World Bank. And a lot of the research has really been designed to understand what’s policy-relevant now and down the road as we think about policy design. And the fact that it’s been such a close collaboration, where we’ve really made a lot of essential research decisions together, I think, makes the research much more useful, in terms of the policy debate. One very concrete example of the impact of the research on the ground is the decision by the Indonesian government to scale up some of our work on community-based targeting as a complaint mechanism for the targeting methodologies. Also, our research on evaluating the effectiveness of social protection cards to ensure that poor households actually know they’re eligible for social programs, and know their rights, has also been scaled up nationally this past summer. And, so, I hope that a lot of the work we’ve done has been useful for policy.

Q: Why is the work you’re doing, as a whole, important for the world and to the citizens of developing countries in particular?

Hanna: My research focuses on thinking through how we can improve essential public services for the poor, given limited resources. And so I’ve done a lot of work in collaboration with the government in Indonesia, with both the nonprofits and the government in India, to really think through how can we solve a lot of the problems that the poor face, in terms of accessing services – discrimination, the fact that bureaucrats are often not present; for me, I think this is very important. My parents immigrated to the U.S., and I feel like a large part of my success has been due to the fact that I had access to a lot of public services along the way: healthcare, public schools.  Having traveled a lot in developing countries and seeing the quality of services, I really, truly appreciate the opportunities I’ve had, having grown up here in U.S. and, so, for me, thinking through what can we do to improve those types of services for others is extremely important.

"In the U.S., there’s a formal system in place, and so if somebody loses their job, there are ways to track their unemployment. If somebody is earning wages below the poverty line, we provide services through the tax system. In developing countries, where an informal economy is often the norm and there are no paper records, it’s extremely hard to figure out who’s actually poor, in order to be able to help them."

—Rema Hanna

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