| Abstract: |
The Egyptian Social Fund for Development was established in 1991 with a
mandate to reduce poverty. Since its inception, it has disbursed about $2.5
billion, of which nearly two-fifths was devoted to supporting microcredit and
financing community development and infrastructure. This paper investigates
the size of the impact of the Fund’s interventions, whether the benefits have
been commensurate with the costs, and whether the programs have been targeted
successfully to the poor. The core of the impact evaluation applies
propensity-score matching to data from the 2004/2005 national Household
Income, Expenditure and Consumption Survey. The authors find that Egypt’s
Social Fund for Development programs have had clear and measurable effects, in
the expected direction, for all of the programs considered: educational
interventions have reduced illiteracy, health and potable water programs have
lowered household spending on health, sanitation interventions have cut
household spending on sanitation and lowered poverty, and road projects have
reduced household transportation costs by 20 percent. Microcredit is
associated with higher household expenditures in metropolitan areas and urban
Upper Egypt, but not elsewhere. The Social Fund for Development’s road
projects generate benefits that, by some estimates, exceed the costs, as do
health and potable water interventions; this is less evident for interventions
in education and sanitation. The Fund argues that its mission is primarily
social, and so should not be judged using a cost-benefit analysis. The Fund
support for microcredit is strongly pro-poor; the other programs analyzed have
a more modest pro-poor orientation. |