# **I. Introduction**

Within the antipoverty toolkit, labor‐intensive public works (PW) programs are currently in fashion. As of 2015, 94 developing countries were implementing PW programs, and many of these were fragile and post‐ conflict states.<sup>3</sup> This popularity reflects a shift in the perceived development potential of such programs as more than instruments of mere income stabilization. In a recent review, Subbarao et al. (2013) list four major ways in which these interventions are currently being used in developing countries: (1) the mitigation of covariate shocks, (2) the mitigation of idiosyncratic shocks in response to a temporary or structural jobs crisis, (3) as a bridge to more permanent employment, and (4) poverty relief. This list suggests that PW can, at least theoretically, both create resilience against shocks and generate opportunities for escaping poverty. Is this optimism justified? Can PW programs really offer both resilience and opportunity, particularly in the context of fragile and post‐conflict states?

Theoretically, the justification for using PW to provide poor households with economic opportunities is straightforward. To the extent that PW programs produce greater, more stable incomes even in the absence of adverse shocks, they can directly and positively impact household welfare. This can occur through one or more of the following channels: increased consumption, more investment in human capital, greater investment in productive assets, and expanded opportunities to engage in higher‐risk, higher‐return activities. Furthermore, PW programs often hold significant appeal among governments because of the secondary benefit of creating community infrastructure.<sup>4</sup> Likewise, PW effectively supply contributory transfers, which, given the labor component, are not perceived as handouts. This contrasts with other social protection programs such as pure unconditional cash transfers (Fiszbein et al. 2009). Some argue that there are additional benefits of PW, including low‐ cost design features such as self‐targeting or enhanced social cohesion.<sup>5</sup> However, empirical evidence on these theorized multifaceted impacts is limited. While there are a handful of studies that show the positive impacts of PW on household income and expenditures, direct evidence of the productive potential of PW is relatively scarce.<sup>6</sup> Indeed, some studies seem to suggest that PW programs are not successful in helping participants to secure long‐term employment.<sup>7</sup> Given signs of the growing adoption and ambitious scope of recent programs, it is important to understand the full extent to which these programs impact household welfare, especially because the programs are costly.<sup>8</sup> Not only does their execution require significant administrative effort, which can be a strain on government capacity, especially in developing countries, these programs also potentially have distortionary impacts on local labor markets. Furthermore, if not designed and implemented properly,

> 3 Following the food, fuel, and financial crises of the last decade, a number of governments introduced PW. See World Bank (2015) for a list of countries currently implementing PW programs.

> 4 See Subbarao et al. (2013) for a detailed discussion.

> 5 There is little rigorous evidence to support this claim. See Andrews and Kryeziu (2013); Subbarao et al. (2013).

> 6 For comprehensive reviews of evaluations of PW programs, see Alderman and Yemtsov (2012); Hagen‐Zanker and Leon Himmelstine (2013); IEG (2011); McCord and van Seventer (2004); Subbarao et al. (2013).

> 7 See Betcherman, Olivas, and Dar (2004); Card, Kluve, and Weber (2010); Martin and Grubb (2001).

> 8 One example is the Ethiopia Productive Safety Net Program, which was introduced in 2004 and successfully reached approximately 7.6 million households in five years. More recently, India's Mahatma Gandhi National Rural Employment Guarantee scheme is said to reach approximately 56 million households and is one of the largest antipoverty programs in the world (Subbarao et al. 2013). See also Azam (2012); Dutta et al. (2012) on India and Adams and Kebede (2005); Berhane et al. (2011); Gilligan, Hoddinott, and Taffesse (2008) on Ethiopia.

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