A team of national and international researchers conducted a qualitative evaluation of the program’s implementation and beneficiaries’ perceptions 7 months after the start of the program¹. A number of lessons were derived based on insights from this evaluation, with the goal of drawing lessons for other interventions in Nicaragua that might similarly aim at physical or human capital accumulation and poverty reduction. The first 2 lessons below have been further supported by evidence from the quantitative evaluation (see earlier) and the ex-post quantitative evaluation will allow shedding further light on some of the other lessons.

Large gains in nutrition, preventive health care, early childhood cognitive development, and education outcomes can be achieved through targeting demand-side constraints

Many nutrition and health programs in Nicaragua typically focus on supply-side interventions, such as the increased coverage of health services, the provision of nutritional packages for babies, young children and pregnant or lactating mothers, and school meal programs. The evidence from the crisis program indicates however that important gains in children’s nutrition, health, cognitive development and education can also be achieved through demand-side interventions that directly target the constraints that households face to invest in the human capital of their children, and attempt to induce behavioral changes through information (and possibly conditionalities). This suggest that it is important to consider the potential advantages and disadvantages of these different approaches, and in particular the possible synergies between them, before launching new programs aimed at reducing hunger and improving nutrition, health and education outcomes.

Community targeting can greatly enhance social capital and the creation of powerful social networks

Participation of a large number of households in a community can result in the adoption of common goals and associated social norms, strengthen social capital, and foment the creation of social networks for information sharing and risk coping in the community. Community dynamics can also be instrumental for the informal enforcement of program rules (e.g. in the case of the crisis program, use of cash transfers consistent with the program objectives). Such community dynamics point to important positive externalities that can substantially enhance the gains of an intervention, and indicate that programs designed to increase physical and human capital of individual households can also have a powerful impact on social capital. Such gains are unlikely to occur when only few households or individuals are selected for program participation in each community. A critical mass of beneficiaries may be needed to create this type of dynamic networks and to ensure effective information sharing.

The choice of targeting approach can be key for equity, transparency, program ownership and effectiveness

In choosing targeting approaches, it is important to consider possible trade-offs related to equity, efficiency, costs, transparency, and program ownership. Overall, a few lessons that can be derived from the crisis program for targeting are:

(i) there are important trade-offs between targeting based on objective data-based methodologies versus selection by leaders. Techniques using data to define eligibility based on geographical and household attributes provide more rigor, and avoid subjectivity, but involve data gathering costs, and can lead to some exclusion errors because of estimation error. On the other hand, selection by leaders leaves room for subjective inclusion or exclusion, and might therefore not be perceived as transparent and fair;

(ii) the transparency and perceived fairness of the targeting mechanism can be key for the widespread acceptance and buy-in of the program, and hence for its sustainability. In the crisis program, the selection of different packages through the community lotteries in which everybody attended, were widely accepted, while some misgivings existed about the community selection and the household selection. While lotteries will not be the most optimal allocation mechanism for all levels of targeting, the experience of the pilot indicates that using a selection procedure with objective rules and attended by the beneficiaries can greatly enhance the acceptance of the program, and therefore it’s effectiveness.

(iii) excluding less poor communities and individuals from program participation before any lottery or targeting mechanism is applied can be imperative when the objective of the program is poverty reduction. Inclusion of such communities or people can seriously affect the credibility of a program, and therefore its effectiveness.

A number of lessons were also derived from comparing the targeting of the crisis program with targeting mechanisms used by many other programs in the region, and in particular from the contrast between a program that targets all poor and vulnerable households in a community, versus programs that target a small subset of households within a community that match certain criteria. In the region where the crisis pilot was implemented, many other programs that are targeted to only a selected group of beneficiaries and rely on the help of local leaders for beneficiary selection, had a beneficiary pool that was better endowed (e.g. more land, better social capital, more entrepreneurship) and often excluded many of the poorest households. This type of targeting therefore often appears to increase local inequality, while the lack of transparency often reduced their overall acceptance level in the community. Before using such targeting mechanisms, it might be important to consider their distributional consequences in a particular setting, by evaluating how many and what type of households are likely to be benefit. In contrast, targeting all poor and vulnerable households in a community based on objective criteria can not only enhance equity, but can also contribute to ownership and acceptance and create positive community dynamics.

Income generating programs that facilitate choice of preferred activities by participant households can advance program ownership, empowerment and sustainability

Allowing households to choose their preferred activity possibly can enhance the effectiveness and sustainability of a program aimed at increasing households’ income generating potential.  The observed heterogeneity in terms of training and business choices in the crisis program suggests that facilitating and allowing flexibility in program design for beneficiaries to select appropriate income generating opportunities might have been a key factor for creating a strong sense of ownership, empowerment, and commitment for project implementation. Households and individuals might engage better in activities where they feel they have a comparative advantage or prior experience. Different households are likely to select different activities, based on different preferences as well as physical, human and social capital endowments. Importantly, encouraging variation of income strategies can also help to prevent negative externalities effects, such as market saturation from one or few activities.

Market constraints might need to be addressed for sustainable increases in households’ income generating potential

Programs aimed at increasing households’ income generating capacities need to consider the various constraints that households might face in their new activities. In addition to addressing constraints on the production side (e.g. through asset or income transfers) it is crucial to consider the market demand for various goods and services. Given that local demand is often very limited, it is key to consider the constraints that might prevent households to engage with broader markets where a wider demand might exist.  When program design fails to incorporate mechanisms to address such constraints, sustainability of the income gains can be jeopardized.

Technical assistance can potentially play a role in helping households to recognize and address the demand constraints, but only if the technical assistance providers themselves are sufficiently trained to identify and understand these constraints. This indicates the need for thorough and appropriate training-of-the-trainers, in particular since many local NGOs and other entities might have more experience with addressing supply-side constraints (e.g. micro-credit). Such training, as well as continuous follow-up and monitoring, might be key to guarantee that new income-generating activities will have sufficient added value, and can lead to a successful pathway out of poverty.

In decentralized programs, it can be important to build in capacity training, appropriate incentives, continuous assistance, good information flows, and monitoring of local counterparts

As local capacity and incentives are often constrained, ongoing technical assistance and capacity training of local counterparts can be crucial to maintain the original design and guarantee achievement of stated objectives of decentralized programs. It might also be important to include appropriate incentives for local providers and municipal counterparts, as well as regular monitoring by the technical staff of the central implementing agency. This can be key not only to ensure sufficient understanding of the program’s objectives and responsibilities of all actors involved, but also for accountability throughout the implementation of the program. Decentralized program implementation is likely to work better when there is clarity among implementing actors on the design and the objectives, and when there is a clearly defined system in place with transparent accountability mechanisms for each operational level. This cannot be achieved without a minimum level of presence in the field by staff of the central agency to inform, assist and monitor program implementation by local agents. As such, relationships between central and local actors need to be articulated and followed through. Monitoring and technical assistance cannot be a one-time event, and is important during the implementation of all the steps of the program.

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