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Public Works

Key-Facts-5 Public works programs have been important counter-cyclical program interventions in developed as well as developing countries for many years to counter weather and financial related shocks.  These programs typically provide unskilled manual workers with short-term employment on projects such as road construction and maintenance, irrigation infrastructure, reforestation, and soil conservation.  This type of program has been used in many countries (Bangladesh, India, Ethiopia, Kenya, Zimbabwe, South Africa, Tanzania, and Ghana, etc.)

 

  Why Public Works Programs?

The rationale for public works programs rests on the following considerations:

  1. The programs provide income transfers to poor households during critical times.
  2. The programs also allow households to meet any consumption shortfalls they may experience.
  3. Well-designed workfare programs construct much-needed infrastructure and thus minimize the trade-off between public spending on income transfers versus public spending on development.
  4. The durable assets that these programs create have the potential to generate second-round employment benefits as needed infrastructure is developed.
  5. The programs can easily be targeted to specific geographic areas that have high unemployment and poverty rates.
  6. In many countries, this type of program has helped many small-scale private contractors to emerge and grow.

The success of each program depends very much on its design features.  The level of the wage rate is a critical design feature.  Self-selection can be encouraged if the wage paid by the public works program is set at slightly below the market wage for unskilled labor.
 

Cooperative community works to clean muddy schools and restart classes after a huricane hit Haiti

Cross-country evidence about the cost-effectiveness of public works programs suggests that programs are worthwhile only if planners give careful attention to the quality of the assets to be created and to the potential of such assets to create second-round employment benefits.

Future benefits from public works can be substantial if the program is well designed and implemented; the program will then be cost-effective.

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