These debates on public assistance for the underprivileged, particularly concerning eligibility and the potential for fostering laziness, are widespread. However, studies from developing countries debunk the myth of the "lazy welfare recipient."
Firstly, cash transfers do not discourage work; rather, they may motivate job-seeking among the poor. Conversely, poverty targeting in these regions is often flawed. Notable programs like Brazil's Bolsa Familia and Mexico's Oportunidades missed 49% and 70% of their intended beneficiaries, respectively. Even Georgia's relatively efficient TSA program excludes 45% of its target demographic.
In contrast, universal approaches minimize exclusion errors, proving more effective in reaching those in poverty.
Asserting one option's superiority over another is insufficient for informed decision-making. It's crucial to examine the positive impacts and challenges of Georgia's anti-poverty program, considering the debates among experts on the country's welfare state narratives: neoliberal and pragmatic liberalism.
The neoliberal view, emphasizing potential welfare abuse, advocates minimal social aid and perceives individuals mainly as market actors, promoting limited public involvement in welfare. In contrast, pragmatic liberalism adopts a realistic approach, recognizing non-market factors essential for market functionality. While acknowledging potential program misuse, this view underscores public values and the middle class's role in economic transition, factoring in cultural attitudes towards inequality in policy planning.
Georgia’s Targeted Social Assistance Program and its implications
Georgia has implemented a Targeted Social Assistance Program (TSA) as a cash transfer program aimed at providing financial support to the most impoverished sections of its population. Administered by the Ministry of Health, Labour, and Social Affairs, the TSA focuses on fulfilling essential needs, including food, shelter, and clothing, for households below the poverty line.
This initiative not only fosters social inclusion but also addresses income disparities through a means-tested eligibility criterion, ensuring support is directed to those most in need.
The TSA program operates through a dual-phase approach. Initially, households undergo eligibility screening based on income. Subsequently, cash transfer amounts are tailored to each household's unique requirements. These monthly transfers are directly deposited into beneficiaries' bank accounts. Applications for the program come from adult family members or through referrals by social workers, utilizing a Proxy Means Test (PMT) for the Income assessment.
This test generates poverty scores by evaluating consumption, socio-demographic characteristics, geographical location, and income, indicating lower wealth with reduced scores. Presently, around 13.4% of households qualify for TSA benefits with scores under 65,000. A mandatory reassessment occurs every four years to update these scores.
Unlike Brazil's Bolsa Familia, which directs payments to women, Georgia's social aid is gender-neutral, though predominantly received by women. This approach risks reinforcing traditional gender roles, potentially restricting women's opportunities and perpetuating dependence on male family members. Conditional cash transfers, in particular, have been subject to criticism for placing the burden of enforcing compliance with program conditions solely on women, instead of sharing it with the state.
In Georgia, most social protection transfers are provided to individuals based on defined risks, except for the TSA which is directed to households. Any adult representative of the family can apply on behalf of the household, and the transfer can be designated to any adult's account.
Despite the circumstances that program does not define recipient by gender, women are more likely than males to be identified as receivers of the TSA benefit, with 77.2% of female recipients and 22.8% of male recipients as of June 2020 suggesting gender biases in resource allocation within families, warranting further research into these intra-household dynamics.
The TSA program has had a significant impact on Georgia's social protection system. The program has helped to reduce poverty and improve the living conditions of the poorest segments of the population. According to the National Statistical Office of Georgia (Geostat), the TSA program has contributed to a decline in the poverty rate in Georgia from 34.6% in 2006 to 17.5% in 2021. The program has also helped to reduce income inequality and promote social inclusion.
Since its inception, the program has undergone significant changes and improvements, including increasing the amount of cash transfers and expanding the coverage of eligible households. In 2021, the program covered approximately 150,000 households, providing monthly cash transfers of up to 60 Georgian Lari (approximately US$25 ) per eligible household member.
In addition to its impact on poverty reduction, the TSA program has also had other positive effects. For example, the program has helped to increase school attendance rates among children from poor households. It has also contributed to the improvement of the health status of beneficiaries, particularly among children.
Challenges and criticism of TSA program
While the Georgian TSA program has been successful in reducing poverty and income inequality, there are still several caveats and challenges that the program faces. Some of these include:
- Coverage limitations and lack of awareness and information: The TSA program covers less than 10% of the population living below the poverty line, with only about 150,000 households benefiting in 2022. Many eligible households remain uninformed about the program, possibly due to inadequate government outreach and limited information access in remote areas.
- Funding constraints: Despite budget increases over the years, the TSA program remains constrained. Furthermore, the COVID-19 pandemic has placed added pressure on the program's resources, as an increasing number of households require support. This is reflected in Figure 2, which shows a spike in demand during the pandemic.
- Exclusion errors: The program's targeting mechanism has a 45% exclusion error rate, resulting in some impoverished households being overlooked. This has led to public criticism, prompting authorities to adjust the program's rules and increase its budget.
- Administrative challenges: The TSA program requires a significant administrative capacity to operate effectively. However, the program has faced challenges in ensuring that eligible households receive their cash transfers on time, and there have been reports of delays and errors in the distribution of funds.
- Dependency concerns: There is also a concern that the TSA program may create a dependency on cash transfers among its beneficiaries, leading to a decrease in work motivation and labor force participation. Non-beneficiaries seem to be concerned that the program reduces incentives for formal employment.
Concerns persist about potential fraud and political manipulation within the Georgian TSA program, especially during elections. Past instances suggest political parties have exploited the program, pressuring beneficiaries to vote for them under the guise of continued support. Additionally, corruption allegations underline flaws in the program's targeting mechanism, leading to the inclusion of ineligible households and the exclusion of deserving ones.
In examining the Georgian TSA program, it's evident that despite criticism, the program has benefited Georgia's poorest. The neoliberal perspective in Georgia posits that misconstrued moral values impede effective social policies, as seen when individuals in the informal sector underreport income to gain benefits. This perspective views public involvement in welfare as potentially self-serving and believes that prioritizing economic growth through market institutions is paramount.
In contrast, the pragmatism liberal narrative emphasizes external factors that support market institutions. While sharing some views with neoliberals, this narrative underscores public values, especially regarding inequality, and sees active social policies as essential for preserving the middle class and ensuring economic reforms.
The interplay between these narratives will likely influence Georgia's future social policy decisions.