Excluding the Needy from Social Programs?

How can you prove you’re needy, if you can’t even prove who you are? That’s the dilemma many individuals face as they try to qualify for social programs in Latin America. The region has moved rapidly to modernize targeting systems and adopt new methods of distributing program benefits, often requiring proof of identity to participate. Unfortunately, however, given the problems of underdocumentation, these efforts have often had the unintended consequence of excluding the most vulnerable from social assistance programs.

In a context of scarce resources and concerns about fraud and leakage in social programs, including the capturing of program benefits by people who don’t need them, technocrats in Latin America have embraced methodological advances in the delivery of social assistance. Usually, the search for greater accountability has resulted in procedures to verify eligibility for program benefits and monitor the transfer of funds. Rather than providing nonindividualized benefits on a geographical basis, program administrators utilize specific information on families and individuals to determine program eligibility and benefit levels. Practically speaking, this means that individuals must produce identity documents in order to participate. For some people, particularly the most disadvantaged, this is a tall order.

How many people lack documentation in Latin America? Among children younger than five in Latin America, UNICEF calculates that approximately 15 percent lack a registered birth certificate. National estimates of the underregistration of births range from 7percent in Peru to 23 percent in Bolivia and 26 percent in the Dominican Republic. Although regional numbers for adults are unavailable, in Peru, an estimated 1.5 million adults did not have a national identity card in 2005; in Bolivia and Paraguay the figures are 750,000 and 127,000, respectively. In Ecuador, some 15 percent of the country’s total population is not registered.

From a social equity standpoint, it is even more worrisome that traditionally excluded groups tend to have higher rates of underdocumentation. Throughout the region underregistration of births is higher in rural areas than in urban areas. Children from low socioeconomic backgrounds are less likely to be registered by age 5, and in many countries certain ethnic and racial groups have higher rates of underregistration. Although the birth registration of children does not vary significantly by gender, in some countries rural adult women are less likely to possess national identity documents than rural men.

This underdocumentation means that many of the neediest people in the region lack the documentation they require to be covered by social programs. The emphasis has been on developing screening procedures to reduce “errors of inclusion,” that is, the leakage of benefits to nontargeted individuals. However, there is a trade-off: the push to reduce errors of inclusion has magnified errors of exclusion of targeted individuals. Social programs can therefore unintentionally intensify the social exclusion of the undocumented by treating official identification documents as strict requirements for program participation.

Conditional cash transfer programs are struggling with these documentation issues as they forge ahead in adopting new targeting and benefit distribution technologies in the region. Programs with relatively strict documentation requirements have effectively excluded undocumented populations through screening or verification procedures. Other conditional cash transfer programs, however, have taken a more flexible approach to eligibility requirements, incorporating the acquisition of identity documents into program objectives.

By way of example, the Bono Desarrollo Humano (BDH) program in Ecuador, like many conditional cash transfer programs, uses an information system to target beneficiary households. Ecuador’s SELBEN (Beneficiary Identification and Selection System) includes information from a short survey on dwelling characteristics as well as the human capital and earnings potential of family members. The SELBEN database includes the national identification number of all household members and the birth certificate number of all children up to age 16. Families who score in the lowest two quintiles are eligible to participate in a series of targeted programs. However, families cannot be entered into the SELBEN if the head of the family or her spouse does not have a national identity document, effectively excluding them from all social programs that use the SELBEN for targeting, including Ecuador’s conditional cash transfer program. The targeting system is only the first filter for inclusion; the conditional cash transfer program itself, the BDH, additionally requires documentation from the head of the family as defined by the program.

The targeting system designed by Brazil in 2002, the Cadastro Único, no longer requires identity documents to be included in the database. However, as in the case of the BDH in Ecuador, in order to enroll in Brazil’s conditional cash transfer program, Bolsa Familia, the head of household must provide an official form of identification, such as a social security card, taxpayer identification card, or voter card. Reportedly, the lack of documentation among family heads has resulted in a rejection rate of 10 percent from the program. Traditionally excluded groups have been found to be particularly vulnerable to omission: 16 percent of residents of Quilombo communities, isolated areas inhabited by descendants of escaped Afro-Brazilian slaves, were found to lack any form of an official identity document, placing them on the path of exclusion from new programs being extended to these areas.

Some countries attempt to limit potential clashes between eligibility rules and underdocumentation by undertaking civil registration campaigns in communities immediately before a program is launched. In Colombia, for example, communities with high rates of underregistration that are scheduled to be included in the conditional cash transfer program, Familias en Acción, are provided with information about civil registration before the program is launched locally.

Some social programs have incorporated documentation as a program target rather than a prerequisite. The most proactive stances are taken by Chile (Chile Solidario), Argentina (Plan Familias), and Peru (Juntos), where identity documents have become objectives for participating families with members lacking identity cards or birth certificates.

In the first year of its Programa Puente, Chile Solidario issued over 26,000 identity cards to poor families who were undocumented at the start of the program. In the design phase of Plan Familias, pilot surveys in two Argentine municipalities indicated that 15–17 percent of intended beneficiaries lacked national identity cards, and the program subsequently developed procedures to help families acquire identity documents. In the first year of the Juntos program in Peru, 85 percent of the 15,000 cases of mothers and children lacking identification were resolved.

The shift to distributing welfare subsidies through financial institutions represents a further modernizing trend that may have magnified exclusion. Banking institutions in Latin America and the Caribbean generally require official documentation for face-to-face transactions or opening individual accounts. While the shift from cash to electronic payments may reduce the possibilities for corruption and crime, these benefits may come at the price of excluding the most vulnerable families in the program.

Surely social programs must keep up with the times and continue to modernize their targeting and delivery systems. However, these efforts are best coupled with reforms to extend coverage. Until countries universalize identification, the rules that govern social programs must carefully address the issues of underdocumentation.

Suzanne Duryea is a senior economist in the Research Department of the Inter-American Development Bank.

This article is reprinted from IDEA, the newsletter of the Research Department of the Inter-American Development Bank. The views expressed herein are those of the author and do not necessarily represent the views and policy of the IDB.