Exploring Impact on Landholdings, Health and Income of the Ultra Poor in Bangladesh Evidence from CFPR-TUP Program

This paper attempts to provide an understanding to what extent institutional change of the functioning of microfinance influences some specific outcomes of interventions like landholdings, health and income of the ultra poor in Bangladesh. It examines impact of the „Challenging the Frontiers of Poverty Reduction-Targeting the Ultra Poor‟ (CFPR-TUP) program on those outcomes using a large balanced panel dataset (2002, 2005 & 2008) from rural Bangladesh. The main objective of this paper is to examine short- and long-term impact on landholdings, health, income and distribution of income of the ultra poor using conditional and unconditional difference-in-differences (DID). In addition, fixed effects estimation is also applied to check the robustness of our estimates on certain outcomes like total landholdings, access to land, land-man ratio, chronic food deficit, income and its distribution. In particular, this paper examines the distinction between treatment and control group in base year and the impact on coping ability. This study uses two different units for measuring the impact on landholdings: proportion of households and decimal. This study (based on proportion) finds the robustness of impact estimates in the long-term for homestead, cultivable and total landholdings using both DID approaches, which also find short- and long-term robust impact for cultivation of others‟ land, access to land and leasing. After using decimal as a unit of measurement, we find the long-term robust impact on homestead, total land owned, access to land and land-man ratio. Here we do not find robust impact on cultivable land and cultivation of others‟ land both in short- and long-term. Fixed effects method is applied along with DID on total land owned, access to land and land-man ratio. The findings suggest that the CFPR has robust impact on total land owned, access to land and land-man ratio only in the long-term irrespective of the approaches. To check the channel between landholdings and food security, fixed effects method is applied only for chronic food shortage and DID methods are applied to all self-perceived food safety issues like chronic and occasional food deficit, break-even and food surpluses. All three approaches provide very much consistent results for short- and long-term impact. All three approaches validate robustness of impact on chronic food deficit suggesting households belong to the program face significantly less chronic food shortages compared to the control. Based on DID approaches, it finds though the CFPR contributes to chronic food security, it accelerates occasional food insecurity. All three approaches confirm the significant impact of the CFPR on income both short- and long-term. However, this study finds no consistent and significant impact on the distribution of income except the richest quintile. The findings from distribution of income suggest the CFPR is working for those living in the richest quintile. Finally, this study finds the significant impact of the CFPR on investment in health and consciousness indicator like usage of sanitation though we are suspicious about its sustainability. The CFPR program therefore has sustainable impact on landholdings, income those living in the richest quintile, health investment and to some extent, on coping ability. Relevance to Development Studies Recently, impact assessment has received increasing attention in policy making in both developed and developing country contexts as it helps to answer key questions for evidence-based policy making: what works, what doesn‟t, where, why and how much? It is an important component of evaluation tools and integral to efforts to improve the effectiveness of the asset transfer program like BRAC‟s „Challenging the Frontiers of Poverty Reduction-Targeting the Ultra Poor‟ (CFPR-TUP) program in improving the living standards of the most shock-prone and disadvantaged segment of the population, the vulnerable ultra poor in Bangladesh and thus playing a crucial role in the study of development economics. Previous studies have demonstrated the CFPR impact but not much is known about the channels that link the program inputs and the poverty impact. Existing studies have so far also neglected the long-term impact of the CFPR on landholdings, health and distribution of income of the ultra poor households in rural Bangladesh in detail. This paper addresses these two gaps, which would be important in policy implications for re-shaping the existing policies and interventions and thus promoting livelihoods of the ultra poor.