2008 Evaluation Report on Social Development Policy in Mexico by CONEVAL

2008 Evaluation Report on Social Development Policy in Mexico

INTRODUCTION ………………………………………………………………4 1. SOCIAL DEVELOPMENT EVOLUTION IN MEXICO ……………..7 1.1.

Coverage of basic services …………………………………8

1.2.

Quality of services …………………………………………...9

1.3.

Income and Food Poverty ………………………………….13

1.3.1. Income poverty in 2006 ………………………………..13 1.3.2. Evolution of income poverty ……………………………..15 1.4.

Access to Food and Nutrition ……………………………..21

1.5.

Disaggregation by source of income ………,,…………..24

1.6.

Income poverty and government and private transferences …31

1.6.1. Oportunidades and Procampo. ………………………..31 1.6.2. Remittances ……………………………………………….33 1.7.

Social Security and Protection ……………………………..34

1.8.

Inequality, Social Cohesion and poverty maps in Mexico ……39

1.8.1. Inequality and Social Cohesion ……………………………….39 1.8.2. Income poverty maps: Incidence ……………………………..42 1.8.3. Income poverty maps: Population ……………………………48 1.8.4. The multidimensionality of poverty: The 2005 Social Gap Index ……………………………………………………………….51 1.9.

Poverty and the Indigenous population …………………………54

1.10. Environment ………………………………………………………….56

2. EVALUATION ON SOCIAL DEVELOPMENT POLICY IN MEXICO ……58 2.1.

Strengths of Social Development Policy ……….………………..58

2.1.1. Expenditure in Social Development …………..……………...58 2.1.2. Focalization, decentralization and aid to basic capabilities .62 2.1.3. Social Development Policy Institutionalization ……………..66 2.2.

The challenges of social development policy in Mexico ………70 2

2.2.1. Problems with the definition of social development, regulations and compliance with social rights ………………70 2.2.2. Program dispersion and lack of coordination ………………..75 2.2.3. Distributive Incidence of Social Programs ……………………79 2.2.4. Coordination of social security policy, of labor policy and of the collection of social programs .………………………..86 2.3.

External Evaluations of Federal Social Programs ……………86

2.3.1. Institutional Context of the External Evaluation of Federal Social Programs …………………………………………………86 2.3.2. Systematization and Analysis of Results ………………….87 2.3.3. Main Finds ………………………………………………………88 2.4.

In Summation. Challenges of Social Development Policy ……94

2.5.

Vivir Mejor Strategy ………………………………………………….98

3. CONCLUSIONS AND RECOMMENDATIONS ……………………………101 3.1.

Conclusions …………………………………………………………..101

3.2.

Recommendations ………………………………………………….105

BIBLIOGRAPHY ……………………………………………………………………..112

INTRODUCTION

Social Development Policy has its origins in the 1917 Constitution, although different stages of it can be recognized throughout the 20th century. The contents of the Magna Carta promote an inclusive nation project where legal equality is proclaimed, as well as the social rights* of the Mexican population –education, health and housing1. Thus, the Constitution was an answer to early last century’s economic and social problems, especially to poverty and inequality.

Public policy and intervention by the State to support social groups has been changing in shape and name throughout the last century. Rolando Cordera states that agrarian distribution in the thirties and the creation of the Mexican Social Security Institute (Instituto Mexicano del Seguro Social, IMSS), the State Workers Security and Social Services Institute (Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado, ISSSTE), the National Popular Subsistence Company (Compañía Nacional de Subsistencias Populares, CONASUPO) and the National Workers Housing Fund Institute (Instituto del Fondo Nacional de la Vivienda de los Trabajadores, INFONAVIT) in subsequent decades, were an integral part of social policy institutionalization, which coincides with the worldwide boom of the State of Wellbeing2. The subsequent years –sixties and seventiesgave place to the creation of programs and strategies such as the Coordinated Program for Public Investment in Agriculture (Programa Coordinado de Inversiones Públicas para el Medio Rural) the Rural Development Public Investment Program (Programa de Inversiones Públicas para el Desarrollo Rural), the National Plan General Coordination of Depressed Areas (Coordinación General del Plan Nacional de Zonas Deprimidas), the Mexican Food System (Sistema Alimentario Mexicano), which were focused on improving wellbeing in the rural sphere3.

__________________ 4

*In this document, the term social rights and social development rights will be used indistinctively, and they refer to those mentioned in the General Law of Social Development 1

Oehmichen Bazán, Cristina. State Reform (Reforma del Estado). Social policy and indigenism in

Mexico, 1988-1996 (Política social e indigenismo en México, 1988-1996). Mexico, Institute for Anthropological Research (Instituto de Investigaciones Antropológicas, UNAM, 1999). 2

Cordera, Rolando. “Market and Equality: from State crisis to social policy,” in: Social policy in

Mexico: trends and perspectives (“Mercado y Equidad: de la crisis del Estado a la política social” en: La Política social en México: tendencias y perspectivas.) Rolando Cordera Campos and Carlos Javier Cabrera Adante, coordinators. Faculty of Economy, UNAM, 2007. 3

Palacios Escobar, Ángeles. “Differences, limitations and scope of the strategies to fight poverty in

Mexico,” in The Social policy in Mexico: trends and perspectives (“Diferencias, limitaciones y alcances de las estrategias de combate a la pobreza en México”, en La Política social en México: tendencias y perspectivas. Rolando Cordera Campos and Carlos Javier Cabrera Adante, coordinators. Faculty of Economy, UNAM, 2007.

In the eighties, social policy became hazy mainly due to the oil crisis, but it is retaken in 1989 with the National Solidarity Program (Programa Nacional de Solidaridad) and in 1997 with Progresa, today the Oportunidades Human Development Program. Current social development policy has as its sources, in greater or lesser measure, a combination of the programs and strategies which survive the 20th century, innovations proposed in recent administrations, as well as various legal mandates, of which the most important are: the Constitution and the General Law of Social Development (LGDS).

Current social development policy has an important element which differentiates it from past strategies: although we find academic documents which analyze and even evaluate prior social policies, it wasn’t until the creation of the National Council for the Evaluation of Social Development Policy (CONEVAL), whose origin derives from the LGDS, that we systematically counted with a formal evaluation of social development policy and programs.

This report is pursuant to Article 72 of the General Law of Social Development (LGDS) that states the evaluation of Social Development Policy shall be under the responsibility of the CONEVAL. This work’s objective is to perform a general evaluation – a prompt diagnostic – of social development policy as of the nineties including current available information. Although evaluating previous years is important, it is not the subject of this study. Likewise, despite any possible changes in social development variables in 2007 and 2008 due to recent economic phenomena, we still don’t have the information to perform an evaluation on this period. Said analysis will take place whenever said information is available.

This Report aims to analyze Mexico’s performance in matters of social development, with two important goals: contribute to the Federal Government’s accountability; and issue recommendations for the improvement of social development policy. 6

For said purpose, since 2006 the CONEVAL has developed measurement and analysis instruments, same that are summarized in this document. On one hand, a rigorous measurement of income poverty, with comparable data since 1992, using information generated by the National Statistics and Geography Institute (INEGI). Likewise, we now count with poverty and social gap maps by state, municipality and by localities with 2005 information.

Taking into account that income is not the only dimension affecting wellbeing and poverty, the CONEVAL has also gathered other indicators that show different aspects of social development evolution; the Social Gap Index is one of them.

On the other hand, the CONEVAL has also developed evaluation instruments that have been applied to different Federal Public Administration social programs. The analysis of the information obtained in evaluations is important input for the realization of this report.

The document is divided into three chapters: the first shows the evolution of various social development indicators in Mexico, since the early nineties. The second chapter presents the evaluation of social development policy in Mexico, and the third presents, in detail, the conclusions and recommendations derived from the analysis made.

1. SOCIAL DEVELOPMENT EVOLUTION IN MEXICO ……………..7

The National Council for the Evaluation of Social Development Policy (CONEVAL) has as a purpose to establish the guidelines and criteria for the definition, identification and measurement of poverty, according to the General Law of Social Development (LGDS). Based on said Law, the CONEVAL is also in charge of evaluating Social Development Policy. Therefore, in order to speak about the state 7

of social development, analyzing the evolution of poverty unidimensionally isn’t enough, but other variables and dimensions affecting social development should also be analyzed. Social development policy evaluation should be based on the state of Mexico’s social development in all its dimensions. This is what will be done in this first section.

Table 1 shows the evolution and current situation of key Mexican social development indicators. The CONEVAL will systematically provide follow-up to these variables in order to perform ongoing monitoring of the situation Mexico’s social development keeps. The following items will study this information in depth.

1.1.

Coverage of basic services

Several health and education indicators have improved in Mexico since 1992, even for the 20 percent poorest population. In great measure, this is due to the fact that the coverage of basic services has increased since then. In the health area, according to the National Population Council (Consejo Nacional de Población, CONAPO), life expectancy at birth at national level increased from 71.7 to 74.8 years from 1992 to 2006. Regarding education, the percentage of heads of household with basic or further education went from 29.9 percent in 1992 to 47.0 percent in 2006, as is shown in Table 1.

According to CONEVAL estimations based on the 1992-2006 National Household Income and Expense Survey (ENIGH), progress has been made in Mexico regarding the coverage of basic services. For example, for the 20 percent poorest population in the 1992 – 2006 period, the percentage of girls and boys between the age of 8 and 12 who worked and did not attend to school dropped from 15.6 to 9.8 percent; the percentage of illiterate people 15 years of age and older decreased from 26.8 percent to 20.8 percent, and the percentage of people 15 years of age and older with incomplete primary school went from 64.8 to 44.8 percent. 8

For the same population group, the percentage of homes without electric power dropped from 19.9 to 3.1 percent. Additionally, the percentage of dirt floor homes was 46.2 percent and in 2006 it decreased to 22.3 percent. Likewise, the percentage of homes without piped water dropped from 43.9 to 23.0 percent.

Regarding education, in 2006, the coverage of primary and secondary education covered over 90 percent of the population in age to receive basic education. However, coverage of middle-high and high education is still under 60 percent.

The coverage of basic services has increased although major differences between Mexicoâ&#x20AC;&#x2122;s states and regions persist, as we will see further on. Public policyâ&#x20AC;&#x2122;s current challenge, in matters of basic services, is to equal coverage between regions and improve their quality and reach universal coverage.

1.2.

Quality of services

Table 1 shows mother mortality has dropped in the past 14 years, but is still far from reaching the 22.0 deaths per 100 thousand births Millennium Goal fixed for 2015, given in 2004 there were 62.4, for with currently available technology over 90 percent of these deaths are preventable. Mother mortality reflects the difficulties Mexican women have in counting with health services and timely and quality care 24/7 year round. The lack of information and geographical obstacles prevent women, most of the time, from reaching the appropriate clinics.4

Although coverage is a major factor to improve healthcare and educational progress, service quality is just as important. The Ministry of Health (SSA)5 states Mexico had 1.4 physicians in contact with the patient per 1000 inhabitants in 2006, while Cuba, Uruguay and Argentina count with 6.2, 3.9 and 3.2, respectively. Additionally, geographic dispersion is a factor that hinders access to healthcare, for while in the Federal District (Capital City) the top rate is 3.1, in Chiapas and the State of Mexico it is 0.8, when the World Health

Organization (WHO) sets forth that the minimum acceptable threshold is 1.0 physician per thousand inhabitants. Regarding the number of nurses, in 2006, Mexico had 2.0 nurses in contact with the patient per 1000 inhabitants, while the United States and Cuba count with 7.9 and 7.6, respectively. The state with most nurses is the Federal District (Capital City) counting with 4 per thousand inhabitants, while states such as Oaxaca, Puebla, Quintana Roo, Chiapas, State of Mexico and Michoacán merely count with 1 per 1000 inhabitants.

With these results, reaching the mother mortality goal will be difficult in Mexico, for although 93.2 percent of deliveries were tended to by medical personnel in Mexico in 20066, there are major differences by entity: in Chiapas and Guerrero only 68.0 and 78.4 percent of deliveries were cared for by medical personnel, respectively. These two entities, next to Durango, are the ones with the highest mother mortality in Mexico: 90.1 and 128.0, respectively.

In matters of education, the challenges regarding quality are huge. Table 1 shows that, compared to non member countries of the Organization for Economic Cooperation and Development (OCDE) who participated in the 2006 PISA test, in 2006 Mexico ranked 18 out of 26 countries in Mathematics tests, and progress has been slow since 2000, for Mexico records 23 points below the average of this group of countries. Likewise, the set of ENLACE tests for primary, secondary and recently for middle high education, confirm that the student’s school performance isn’t optimal to face the productivity, competitiveness and human development challenges required by Mexico. ___________________ 4

Freyermuth Enciso Graciela (CIESAS-Sureste), Ivonne Villalobos (UAM-A) et al. Obstetric Urgency and Popular Knowledge in Tenejapa, Chiapas. Perinatology and Human Reproduction (Urgencia Obstétrica y Saber Popular en Tenejapa, Chiapas. Perinatología y Reproducción Humana). Vol. 20, No.4; OctoberDecember 2006. 5

Mexico, Ministry of Health, Health: Mexico 2006 Information for Accountability (México, Secretaría de Salud, Salud: México 2006 Información para la Rendición de Cuentas). México, SSA, 2007,278 p. 6

Percentage of women 20 years of age or older, whose last child was liveborn during the five-year period prior to the Survey.

Table 1 Social development indicators in the population nationwide and the poorest 20 percent, 1992, 2000 and 2006* Dimension

1992 Poorest Nationwide 20 %

Education Children between 8 and 12 that do not attend school a Illiterate people over the age of 15 a People over the age of 15 who didnâ&#x20AC;&#x2122;t finish primary school Heads of household with basic education or more a

8.9 26.8 64.8 5.4

Coverage 1 Primary Secondary Middle high High Quality of education

5.1 11.3 36.2 29.9

2000 Poorest 20 % 6.2 25.0 57.2 11.1

95.2 67.8 36.5 13.9

PISA Mathematics test average in Mexico 2 PISA Mathematics test average in non OECD member countries Place Mexico stands in with respect to non OECD member countries in the PISA Mathematics test

2006

Nationwide 3.4 10.1 28.8 38.8

Poorest 20 %

Nationwide

3.5 20.8 44.8 21.6

1.9 8.5 23.6 47.0

94.8 83.8 48.4 20.2

94.4 93.0 59.7 24.3

386.8 425.1

404.2 427.0

9th out of 13

18th out of 26

73.9 19.4

74.8 16.2

Health Life expectancy (years) 3 Infant mortality rate (deaths of children under one year of age per each thousand nationwide) Mother mortality rate (deaths per each thousand nationwide)

71.7 31.5 89.0 [1990]

Housing features Dirt floor homes a Homes without electric power a Homes without piped water a Home equipment Homes without telephone a Homes without refrigerator a Homes without washing machine

Environment Occupants in homes that use coal or wood as fuel for cooking

National surface covered by forests and jungles

72.6

46.2 19.9 43.9

15.8 6.5 18.5

33.3 7.5 38.9

9.7 2.0 16.1

22.3 3.1 23.0

7.2 0.9 9.8

98.6 81.5 90.5

75.9 39.7 60.1

94.6 67.5 82.5

60.1 26.1 46.9

80.7 47.7 66.2

48.8 19.6 34.9

19.8 23.4 [1990] 34.3 [1993]

a, 14

Social security People 65 years old or older who do not work and donâ&#x20AC;&#x2122;t receive pension Employed population without access to healthcare a, 5 Heads of household without access to healthcare a, 5 Households without coverage by social programs or social security a, 6

62.4 [2004]

15.8

33.5 [2002]

29.0 [2004]

94.1 90.6 89.1 89.1

80.0 64.1 69.3 69.3

97.1 93.8 93.8

75.1 66.2 70.9

90.8 90.6 89.8 38.3

71.5 67.0 71.0 50.1

$364.11 51.6

844.0 34.4 21.4 0.071 0.033

$323.73 48.6

743.2 29.3 24.1 0.084 0.041

$424.61 42.7

831.8 28.3 13.8 0.042 0.019

Access to food Monthly food expenditure per capita 7, 8 Food expenditure with regard to the total income People in food poverty a Intensity of food poverty 9 Food poverty inequality 10

a, 13

Continues

Dimension

1992 Poorest 20 %

Nutrition Low weight prevalence among children under 5 Low size prevalence among children under 5

Low size prevalence among children under the age of 5 in the indigenous population a Overweight prevalence among women between the age of 20 and 49 a Obesity prevalence among women between the age of 20 and 49 years of age a Income Average total monthly current income per capita People in capabilities poverty a People in patrimony poverty a GNP per capita annual average a Average inflation

$641.53

Social cohesion Inequality (Gini coefficient) Proportion between the total income of the tenth and first decile Equal Opportunity Women in the Chamber of Representatives Women in the Chamber of Senators a Female professionals and technicians a

Poorest 20 %

14.2 [1988] 22.8 [1988] 6.0 [1988] 48.1 [1988] 25 [1988] 9.5 [1988]

Emaciation prevalence among children under 5

2000

Nationwide

3191.3 29.7 53.1 1.9 [1991-92] 15.4 [1991-92]

2006

Nationwide

Poorest 20 %

Nationwide

7.6 [1999] 17.8 [1999] 2.1 [1999] 44.3 [1999] 36.1 [1999] 24.9 [1999]

$610.54

3127.4 31.8 53.6 3.8 [1999-00] 10.6 [1999-00]

5.0 12.5 1.6 33.2 36.9 32.4

$862.47

3641.5 20.7 42.6 3.1 [2005-06] 3.7 [2005-06]

0.5 31.3

0.6 36.0

0.5 26.1

8.8 3.1

16.8 18.0 39.5

22.2 16.4 40.4

Discrimination Discrimination against women, homosexuals, indigenous, disabled, religious minorities and older adults a, 12 * a 1 2 3 4 5 6 7 8 9 10 11 12 13 14

30.4

The poorest 20% corresponds to the 1st quintile. The quintiles were built using the total net income per capita. Percentage. Coverage: Indicates the percentage of students serviced in an educational level, with regard to the population that represents the age to study said level. PISA is an aptitude test applied to a sample of students between the age of 15 and 16 who are not in primary school in OECD member countries Demographic indicators, 1990-2050 CONAPO The data of homes with more than one household have been imputed to additional households. Access to healthcare refers to IMSS, ISSTE, PEMEX, Marine, Army and Universities Comprises those households that do not count with aid from Procampo and Oportunidades programs, those where no household member counts with Popular Insurance and where the head of the household doesnâ&#x20AC;&#x2122;t count with access to healthcare as a labor benefit. Figures in august 2006 Mexican pesos Food expenditure refers to monetary expense and non-monetary income on food This indicator is a measure of the distances of the income of poor households to the food poverty line. The closer its value is to the proportion of population in situation of food poverty, the deeper the poverty. It is calculated based on the Foster-Green-Thorbecke (FGT(a)) index This indicator is a measure of the inequality of income between people in situation of food poverty. It is calculated based on the Foster-Green-Thorbecke (FGT(a)) index The income measure corresponds to the total net income per capita employed in the measurement of income poverty Percentage of people in one of these groups that claimed has suffered an act of discrimination. The percentage is calculated based on the monetary expense For years 1993 and 2002 the data were taken from the 2006 UN Mexico Millennium Development Goals Progress Report. The 2004 data was taken from the INEGI 2004 Forest Production Statistical Yearbook. Sources: CONEVAL estimations based on ENIGH 1992, 2000 and 2006 estimations. 2006 PISA: Science Competences for Tomorrowâ&#x20AC;&#x2122;s World. OECD. First Survey on Discrimination in Mexico, 2005. Sedesol and Conapred Mexico Millennium Development Goals: 2006 progress report. UN System for the analysis of educational statistics, Version 7. SEP INEGI, ENE and ENOE Tabs (second quarter of the year in question. Rivera Dommarco J et Al., Nutrition and Poverty : Sustained Public Policy, 2008

1.3.

Income and Food Poverty

The LGDS sets forth that, for the measurement of poverty, one of the variables to be used is total current income. Given we count with an income poverty series with estimations since 1992 and Mexico has committed to provide follow-up to the Millennium Goals, among other, using this methodology, the CONEVAL Steering Committee deemed it indispensable to continue with this estimation.

According to this methodology, three levels of poverty were defined:

1) Food poverty: Incapability to acquire a basic food basket, even if the entire income available to the household were used just to buy said basket goods.

2) Capabilities poverty: Insufficiency of the available income to acquire the food basket value and make the necessary expenses in health and education, even if the total household income were devoted solely to these purposes. 3) Patrimony poverty: Insufficiency of the available income to acquire the food basket, as well as to make the necessary expenses in health, clothing, housing, transportation and education, even if the entire household income were used exclusively for the acquisition of these goods and services. 1.3.1. Income poverty in 20067

Income poverty estimations, at national level and in the rural and urban spheres, for the year 2006, were made based on information by the 2006 National Household Income and Expense Survey (ENIGH), which was disclosed on July 16, 2007, by the National Statistics and Geography Institute (INEGI). 7

All poverty information and data at national level, as well as the poverty and social gap maps presented

below, may be found and downloaded at www.coneval.gob.mx

According to 2006 ENIGH information, 44.7 million Mexicans, which represented 42.6 percent of the inhabitants total in Mexico, lived in patrimony poverty. This means each inhabitant had a total income below 1,625 pesos a month in the urban area and below 1,086 pesos in the rural area, which prevented them from acquiring their basic food, health, clothing, footwear, housing and public transportation requirements, even if their total income were devoted exclusively to satisfy these needs.

In rural localities with less than 15 thousand inhabitants, patrimony poverty afflicted 54.7 percent of the population, while in urban areas it amounted to 35.6 percent. The above defines that around 21.1 and 23.6 million people suffered patrimony poverty at rural and urban level, respectively in 2006.

According to the same source, it is estimated that in 2006, 13.8 percent of Mexicans were under the food poverty line, which represents around 14.4 million people. A person under the food poverty line is that which has a monthly total income below 810 pesos in the urban area and below 599 in the rural area â&#x20AC;&#x201C;at 2006 prices-. Any income under this amount would be insufficient to acquire a minimum food basket, even if the entire income were devoted solely to this purpose.

In 2006, out of the 14.4 million people under the food poverty line, 5.0 million lived in urban areas and 9.4 million in rural areas, which indicates that two out of three people under the food poverty line lived in rural areas. Urban food poverty is 7.5 percent, and in rural areas it amounts to 24.5 percent (Chart 1).

1.3.2. Evolution of income poverty

Changes in income poverty from 2004 to 2006 Income poverty at national level in all its levels shows a reduction from 2004 to 2006, in spite the fact that between 2004 and 2005 a specific increase of poverty was recorded in the rural sphere. The number of people under the food poverty line dropped from 17.9 to 14.4 million, that is, from 17.4 to 13.8 percent. The number of people in patrimony poverty went from 48.6 to 44.7 million, which means a change from 47.2 to 42.6 percent of the population. In rural areas a specific reduction is recorded at all levels of poverty during this period, although this reduction is not statistically significant. Food poverty in urban areas dropped from 11.0 to 7.5 percent. The number of people under the food poverty line decreased from 7.1 to 5.0 million and of people in patrimony poverty went from 26.5 to 23.6 million. 1992-2006 Evolution of Income Poverty

From 2000 to 2006, patrimony poverty at national level dropped from 53.6 to 42.6 percent, which implies the number of people in patrimony poverty condition went from 52.7 to 44.7 million. Likewise, food poverty dropped from 24.1 to 13.8 percent, that is, from 23.7 to 14.4 million people. 15

In rural localities with less than 15 thousand inhabitants, the number of people in patrimony poverty condition dropped from 26.5 to 21.1 million, that is, a change from 69.2 to 54.7 percent of the population. In these same localities, the number of people under the food poverty line went from 16.2 to 9.4 million, which represents a change from 42.4 to 24.5 percent.

In urban areas the number of people in patrimony poverty condition went from 26.2 to 23.6 million, which represents a change from 43.7 to 35.6 percent. Food poverty went from 7.5 to 5.0 million, which represents a drop from 12.5 to 7.5 percent.

Chart 2 and Table 2 show food poverty increased from 21.2 to 37.4 percent at national level from 1994 to 1996, which means the number of people in this condition went from 19.0 to 34.7 million. During the same period, patrimony poverty went from 52.4 to 69.0 percent, which increased the number of poor people from 47.0 to 64.0 million.

At national level, food poverty dropped from 37.4 to 13.8 percent from 1996 to 2006. Patrimony poverty dropped from 69.0 to 42.6 percent during the same period. The number of people in food poverty conditions during this period went from 34.7 to 14.4 million, while the population in patrimony poverty dropped from 64.0 to 44.7 million (Table 2).

In the entire period, from 1992 to 2006, patrimony poverty dropped from 53.1 to 42.6 percent; the number of people in this poverty condition went from 46.1 to 44.7 million, from 1996 to 2006 being the period with the greatest drop. In fact, from 1996 to 2006 the number of people who were not in any type of poverty, went from 28.7 million to 60.1 million.

Food poverty dropped from 21.4 to 13.8 percent from 1992 to 2006, which meant having gone from 18.6 to 14.4 million people in this poverty situation. In the 14

years comprised in this period, the number of people under the food poverty line dropped by 4.1 million, 2.3 million in the rural area and 1.8 million in the urban area. In this same period, patrimony poverty dropped by 1.5 million people, as a result of a reduction by 2.0 million people in the rural area and an increase by 500 thousand people in the urban area (Table 2).

Chart 2 1992-2006 Evolution of National Poverty Poverty incidence (percentage of people)

In spite of the reduction of poverty from 1992 to 2006, the increase of poverty from 1994 to 1996 should be highlighted. As a result of the macroeconomic problems that caused the GNP to drop by around 7 percent in 1995, the populationâ&#x20AC;&#x2122;s purchasing power dropped considerably. From 1994 to 1996 food poverty increased by close to 16 million people.

As can be seen in Table 1, the populationâ&#x20AC;&#x2122;s average monthly income per capita was 3,191.3 pesos in 1992 and 3,127.4 pesos in 2006. The value of monthly food consumption per capita also dropped during this period, going from 844.0 pesos in 1992 to 831.77 pesos in 2006. This means poverty, measured through income, is closely linked to the economy as a whole.

There is a close relationship between the countryâ&#x20AC;&#x2122;s economic performance and its social development, especially reflected in poverty measured through income, as is shown in Chart 3. The 1994-1996 period shows poverty rapidly increased when the GNP growth was reduced and inflation rose.

Likewise, during the 1998-2000 period, when economic growth was relatively high and inflation dropped, the reduction of income poverty was significant. What happens to economy on the medium and long term has an opposite impact on poverty, as is shown in Chart 3. It shows that overall, the GNP and poverty have mirror evolutions: in general, poverty is counter-cyclical. During the 1992-2006 period, the growth of the annual average GNP per capita was 1.6 and the average annual reduction of food poverty was 1.8 percent.

Table 2 1992-2006 Evolution of Poverty* People Percentage Food

Capabilities Patrimony

Number of People Food

Capabilities Patrimony

Standard error 4 Food

Capabilities Patrimony

National

Rural

Urban

* The figures correspond to the new databases that incorporate modifications made after the demographic conciliation performed by the INEGI and the CONAPO. 1 Food poverty: refers to people whose income is below the required to cover the food needs corresponding to the requirements established by the INEGI â&#x20AC;&#x201C; CEPAL food basket. 2 Capabilities poverty: refers to people whose income is below the required to cover the basic consumption pattern in food, health and education. 3 Patrimony poverty: refers to people whose income per capita is below the required to cover the basic consumption pattern in food, clothing and footwear, housing, health, public transportation and education. 4 Standard errors are reported in percentages Source: CONEVAL estimations based on 1992 to 2006 ENIGHs

Poverty level trends shown here have the same profile as the November 2007 estimations by the Economic Commission for Latin America and the Caribbean (CEPAL), as shown on Chart 4.

Chart 4 Evolution of poverty and indigence in percentage of people according to information by the CEPAL 1994-2006.

Source: The CEPAL figures were gathered from the document: Economic Commission for Latin America (Comisión Económica para América Latina, CEPAL) (2007) and (2006), “Social Overview on Latin America” ("Panorama Social de América Latina"), at http://www.eclac.org.

1.4

Access to Food and Nutrition

Monthly food consumption per capita has had a cyclical evolution, therefore it responds as a mirror to the evolution of food poverty, as shown on Table 1. Nevertheless, it is important to stress that according to the same chart, the average food consumption per capita of the poorest 20 percent of the population in Mexico in 2006 was only 424.6 pesos, below the urban or rural food poverty line. The above indicates that, given the population in poverty conditions has to devote

resources to other needs (health, education, transportation, clothing, etc.), besides food, what they can spend in food is even less than the minimum food basket. This proves the fragility of the nutritional situation of the population in poverty conditions.

The above is stressed when we see that, while national child malnourishment, measured through the low weight prevalence, low size or emaciation of children under 5 in 2006 recorded levels amounting to 5.0, 12.5 and 1.6 percent respectively, a trend that has been dropping since 1988; malnourishment levels are still significantly high within the indigenous population. According to Table 1, the low size prevalence among indigenous children under the age of 5 was 33.2 percent in 2006, compared to 48.1 percent in 1988.

Mexicoâ&#x20AC;&#x2122;s nutritional reality also shows a relatively new phenomenon, but that already affects public health and will worsen in the following years: obesity. This disease in general affects the entire population and is responsible for the high diabetes and heart disease levels. Obesity is the result of energy unbalance, that is, of the ingestion of a greater amount of energy than that which is spent. This is caused by consumption of high energetic density foods and beverages with calorie value, and/or consumption of big portions and/or frequent consumption of foods throughout the day, together with insufficient physical activity.8

Food Price Increase

After the periods of accelerated inflation in the eighties and mid nineties, Mexico had a major inflation control. However, since 2007, the world has been experiencing, Mexico included, a major food price increase which undoubtedly affects the countryâ&#x20AC;&#x2122;s population, especially poor families.

As shown on Chart 5, the food basket values with which the CONEVAL measures income poverty –the food poverty line-, have been growing regarding previous years. This growth is perceived late 2007 and is accentuated during 2008. The prices and income situation could aggravate further given the recent world financial problems. In August 2007, the rural food basket growth was 5.2 percent compared with the same period the previous year. However, the annual food basket growth in August 2008 was 18 percent9, value which if higher than the household income increase would translate into the growth of income poverty. Thus, it is necessary to undertake actions which aim to help families in poverty conditions in order for the impact of this crisis to be reduced as much as possible. Chart 5 Evolution of the food basket value and the National Consumer Price Index (INPC) (percentage growth with regard to the same month of the previous year)

Source : CONEVAL estimations

______________ 8

Rivera Dommarco Juan A. and Jaime Sepúlveda Amor. “1999 Nutrition Survey Conclusions: translating results into public policies on nutrition” (“Conclusiones sobre la Encuesta Nacional de Nutrición 1999: traduciendo resultados en políticas públicas sobre nutrición”). Mexico Public Health (Salud Pública México) 2003;45 supl 4:S565-S575 9

Updated according to price indexes reported by Banco de México.

1.5

Disaggregation by source of income

The information above showed income poverty decreased significantly from 1996 to 2006, and this reduction also took place during the 1992-2006 period, but at a lower rate. This item aims to disaggregate total current income of households in a greater situation of poverty, to have a preliminary picture of the factors that could express the evolution of poverty from 1992 to 2006. Income poverty measurement implies comparing total current income per capita in households with the poverty line and based on the results classifying them as poor or non poor. Thus, if poverty dropped from 1992 to 2006, it is important to analyze specifically which sources of income increased (and which decreased) for the population in poverty conditions during that period, in order to count with conclusions on this evolution. The variation of poverty is more pronounced in Mexicoâ&#x20AC;&#x2122;s rural areas, therefore, to have a clear picture of the processes that lead to this change, it is convenient to stop and analyze the evolution of the sources of income in rural areas. Table 3 shows changes in income per capita in rural households, where we see a 24.2 percent raise in income, which translates into an average increase by 82.96 real pesos per capita.10 Standing out is the increase of transferences, especially of remittances and the Oportunidades and Procampo programs, most of all because these two programs did not exist in 1992. Likewise, standing out is the absolute increase of WageEarning Remunerations and Transferences as a whole. Also predominating is the absolute and percentage reduction of Autoconsumption, and Payment in Kind, Other Income (own income, by cooperatives, from societies and property lease). ___________ 10

For the rural case, we chose for this entire comparison period (1992-2006) to analyze the evolution of total current income

of the poorest 28 percent, for this was the percentage of food poverty in 2004.

Table 3 Growth rate and absolute changes in the sources of income in rural households under the food poverty line in 2004 (1992-2006)

In this sense, in Table 6 we see that in rural areas the participation of wageearning work remunerations in the increase of the total net income per capita during these two years was 79.4 percent11. Likewise, it details that the Oportunidades and Procampo combined income represented 67.5 percent and the contribution of remittances was 20.6 percent, compared to the increase of the total current income per capita. It is worth recalling that in 1992 the Oportunidades and Procampo programs did not exist. 25

As can be observed on Table 6, rural wage-earning remuneration accounts for 79.4 percent of the increase of the total current income per capita among rural poor families. But at the same time, this item is comprised by two elements: the evolution of real salaries and the evolution of employment. That is, the populationâ&#x20AC;&#x2122;s total labor income has two aspects: how many employed receive income and what average salary they receive. Chart 6 shows that the increase in rural wage-earning remuneration by 6.4 percent corresponded to a real increase in salaries, while 89.2 percent corresponded to an increase of employed population. This means real salaries havenâ&#x20AC;&#x2122;t been a major factor in the increase of income and the reduction of poverty from 1992 to 2006, therefore the main factor was the increase of employment.12

_________ 11

79.4 percent is the percentage representing the 65.86 pesos by which wage-earning work remuneration per capita increased compared to the 82.96 peso increase of the total net income per capita. 12

Chart 6 shows Wage-Earning Work Remunerations per capita represented 79.4 per cent of the total increase of the total net income per capita of families under the food poverty line in the rural area. Out of this increase, 6.4 percent is due to the real increase of salaries and 89.2 percent to the increase of employment; to these two items combined, we subtract 16.2 percent which is a reduction in the participation of Wage-Earning Work Remuneration per capita due to the population increase, thus 6.4+89.2-16.2=79.4 percent. This disaggregation of changes is made with differential equations.

Chart 5 Participation of absolute growth in total net income per capita in rural homes under the food poverty line (2006 pesos)

Note: The figures correspond to households up to the 28 rural percentile, taking as basis poverty in 2004. Payment in kind and other transferences are omitted and therefore the sum of the percentages isnâ&#x20AC;&#x2122;t 100.0. Source: CONEVAL estimations based on 2006 ENIGH.

When we now see the behavior of average labor income at national level from 1992 to 2006 shown in Chart 7, it shows that said income suffered a major reduction in 1996, recovered rapidly in the subsequent years, but has practically kept its same value than in 1992. In fact, the value of the national average income was 3.1 percent lower in 2006 than in 1992, as is shown in Table 4. The same behavior can be seen in the average labor income of the poorest families in the rural and urban sector.

Real income has gradually increased since 2000, especially that of the poorest people in rural and urban areas (from 2000 to 2006 the real average labor income

increased 34.5 percent and 12.4 percent in families under the food poverty line in rural and urban areas, respectively), but in the long term, the result has not been the same. From 1992 to 2006 real labor income per capita only increased by 3.8 percent among rural poor families and it dropped 0.01 percent in urban areas; the national average suffered a reduction by 3.1 percent, as is shown on Chart 7 and Table 4, which indicates the real salary practically hasnâ&#x20AC;&#x2122;t changed in 14 years.

When we analyze the evolution of real salaries, again the correlation between economic performance and poverty stands out. The evolution of national real median labor income shown on Chart 7, is practically a mirror of the evolution of national poverty; the evolution of the labor market variables â&#x20AC;&#x201C;employment and salaries- has a major influence on the evolution of poverty. Chart 6 National, urban and rural average labor income (2006 pesos)

Note: the figures correspond to households up to the 28 rural and 11 urban percentile, taking poverty in 2004 as a basis Source: CONEVAL estimations based on ENIGHs of different years

Chart 4 confirms that, at national level, the number of employed people in Mexico has grown 65.3 percent from 1992 to 2006, that real labor income had a slight drop, as was mentioned before, and that the labor Net Participation Rate grew 23.5 percent, which helps explain the increase in employment.

Table 4 Labor, employment and net participation rate percentage growth rates (1992-2006)

Source: CONEVAL estimations based on ENIGHs of different years.

In a 1.6 percent (1992-2006) period of growth of the annual average GNP per capita, it would be difficult to think that employment grew close to 65 percent. Thus, to better understand the evolution of employment in these 14 years, we need to disaggregate occupation into formal and informal.

Chart 7 points out that the employment that has grown considerably is informal and not formal employment: from 1992 to 2006 there was a net increase by almost 5.1 million formal jobs –workers with formal social security: IMSS, ISSSTE, Petróleos Mexicanos (PEMEX), Ministry of Marine (SEMAR)-, but during the same period, informal employment –those employed without social security and who are not Employers- grew by 10.2 million people, twice the growth of formal employment, according to different year ENIGH’s. 29

Chart 7 Absolute employment growth, 1992-2006

Source: CONEVAL estimations based on ENIGHs of different years.

Thus, one of the factors for total current income per capita to have grown is the increase of informal employment, even more than the increase of formal employment or the increase of real salaries, from 1992 to 2006. Therefore, the evolution of the labor market has been and will be determinant in the evolution of poverty measured by income. If the most important variables of the labor market â&#x20AC;&#x201C;salary and employment- improve, this would translate into an accelerated reduction of poverty. Possibly, the most important reason why poverty has decreased so slowly from 1992 to 2006 is the fact that economic growth, which generates formal jobs and raises real salaries, has been very low. Table 1 shows that between 1992 and 2006 the percentage of employed people with no access to healthcare, that is, people with no social security benefits from their jobs, grew slightly â&#x20AC;&#x201C;from 64.1 to 67.0 percent-. The employed population grew at a faster rate than formal employment. A sustained growth of economy, with more formal jobs and higher salaries, would translate into a more accelerated reduction of poverty in Mexico. 30

1.6 Income poverty and government and private transferences

1.6.1 Oportunidades and Procampo

There is a set of social programs that provide the population with aid in cash, and which could reduce income poverty in the short term. Two examples are the Oportunidades and Procampo programs, which are included as a source of income in the ENIGH.

In spite of the fact that both programs’ objective is not reducing poverty through cash transferences –the objective of Procampo is to improve producers’ economy through their crops, and the objective of Oportunidades is to reduce the intergenerational transmission of poverty through education, health and nutritionwe can estimate their direct contribution to the reduction of income poverty through the ENIGH.

As is shown on Chart 8, in the urban area neither Procampo nor Oportunidades have a major effect on the reduction of poverty in the short term13. However, in the rural sector, detailed estimations point out that poverty was reduced from 28.4 to 24.5 percent in 2006, that is, by 1.7 million people, as a consequence of monetary transferences of the Oportunidades program. Procampo’s effect is very low (Chart 9) in rural areas. 14

________ 13

Escobar, Agustín and Mercedes González de la Rocha. (Quantitative Evaluation of the Oportunidades Human Development Program: 2001-2002 impact follow-up, communities with 2,500 to 50,000 inhabitants (Evaluación Cuantitativa del Programa de Desarrollo Humano Oportunidades: seguimiento de impacto 20012002, comunidades de 2,500 a 50,000 habitantes. CIESAS. December 2002. 14

For a more detailed analysis on the effect of transferences by the Oportunidades program on income poverty, you may consult the article by Cortés Fernando, Banegas Israel and Solis Patricio. Poor with opportunities (Oportunidades): Mexico 2002-2005 (Pobres con oportunidades: México 2002-2005). Sociological Studies (Estudios Sociológicos), México, 2007, XXV 73 p.

Chart 8 Evolution of food poverty according to income variations (Urban)

Source: CONEVAL estimations based on ENIGHs of different years.

Chart 9 Evolution of food poverty according to income variations (Rural)

Source: CONEVAL estimations based on ENIGHs of different years.

1.6.2 Remittances

Not all remittances reach families in poverty, but they do contribute in reducing poverty. As is shown on Table 3, remittances have grown 405.5 percent among families under the food poverty line in rural areas from 1992 to 2006. Remittances have become a major source of income to many families in Mexico15. According to food poverty estimations for the year 2006, if during that year no remittance flow had existed in Mexico, food poverty would have been 15.9 per cent, instead of 13.8 percent at national level. This represents a reduction of approximately 2.3 million people that year. As can be seen on Chart 11, the contribution of remittances has been gaining greater importance as time elapses, especially in rural areas. By 1992 the difference between food poverty estimations with and without remittances is 0.9 percent, a reduction of poverty by exactly 0.9 million people. Chart 10 Evolution of food poverty according to income variations (National)

Source: CONEVAL estimations based on ENIGHs of different years.

____ 15

Escobar LatapĂ AgustĂn and Erick Janssen. Migration, the diaspora and development: The case of Mexico. International Institute for Labor Studies. Discussion paper DP/167/2006. http://www.ilo.org/inst

1.7

Social Security and Social Programs

Guaranteeing social rights to the population is the Stateâ&#x20AC;&#x2122;s responsibility, same which, if satisfied, would allow reducing the impact of sudden changes in the personal or environmental situation of people, which has always been a factor of paramount importance to families. But social security coverage is not universal, therefore people with relatively high income levels tend to cover the cost of insurance with their own resources, but people with lower income donâ&#x20AC;&#x2122;t always have the capability to do so. The right to social security should have a relevant role in social development policy. The IMSS and the ISSSTE were created in the 20th Century to cover the social security of families in Mexico. However, we observe that having universal security through these mechanisms has not had the expected outcome.

According to Table 1, at national level people 65 years of age and older who do not work and do not receive pension amounted to 80 percent of the population in 1992; by 2006 this percentage merely dropped to 71.5 percent. The heads of household without access to healthcare, that is, not members of a public institution receiving social security benefits, whether from the IMSS, ISSSTE, PEMEX, the Ministry of Defense (SEDENA) or the SEMAR, went from 69.3 percent in 1992 to 71.0 percent in 2006. Access to formal social security by the 20 percent poorest population is even more precarious: 89.8 percent of the heads of households had no access to social services in 2006.

In the face of this fact, the government has designed a set of social programs to help the population lacking social security from institutions such as the IMSS or the ISSSTE. Both the Oportunidades program and the Popular Insurance (Seguro Popular) program, for example, provide or strengthen aid in help or in cash, to the 34

population in poverty conditions and lacking formal protection. However, the services provided do not count with all the social security components offered by the IMSS or ISSSTE and thus provide incomplete protection.

Table 1 shows that if, besides formal social security, we include the set of social programs targeted, in general, to the population that does not count with formal access to social services, the picture of support to the population changed significantly from 1992 to 2006. In 1992, the Oportunidades and Popular Insurance (Seguro Popular), among others, did not exist, therefore social security came down to formal institutions. Thus, for the poorest 20 percent of families in 1992, 89.1 percent of households had no access to social services or to the aforementioned social programs, according to the ENIGH. But by 2006, this percentage dropped to 38.3 percent, as can be seen on Table 1. For the general population the change was from 69.3 percent to 50.1 percent of families without access to social services or to the social programs recorded in the ENIGH in 2006.

The above means that from 1992 to 2006 social programs â&#x20AC;&#x201C; at least those included in the ENIGH- have contributed, as a whole, in helping the poorest families. As will be explained further on, the progression of these social programs, maybe except Procampo, stands out more than other social policy actions or programs.

Table 5 shows with greater detail the coverage of the different security instruments and social programs by quintiles and by rural and urban areas in 2006. We observe only 23.1 percent of the heads of household in Mexico has access to the IMSS and in the case of the ISSSTE the figure is 5.2 percent, but these services scarcely reach the poorest population. Only 8.9 percent of the heads of households within the lowest income quintile are IMSS members and in the case of the ISSSTE only 1.0 percent, according to the ENIGH.

However, 42.9 percent of families among the first income quintile count with Oportunidades, 9.4 percent count with Procampo and 25.1 percent count with Popular Insurance (Seguro Popular). If we combine the benefits of formal social security, we see that 10.2 percent of the heads of household in the first income quintile has some kind of formal social security; but 54.6 percent of households in the same quintile count with a social program. That is, 61.7 percent of households in the first quintile have some kind of social security or social program.

Progress in the focalization of social programs in Mexico can be seen more clearly in the rural area. As shown on Table 6, in 1992 85.4 percent of rural households had no kind of protection or social security, according to the ENIGH; the only formal options for care where via the IMSS or the ISSSTE. In 2006, only 39.3 percent of rural households had no kind of social security; the combined coverage of the IMSS and ISSSTE practically didnâ&#x20AC;&#x2122;t change during this period for rural families, but the combined coverage of Oportunidades, Procampo and Popular Insurance (Seguro Popular) went from 0.0 to 49.6 percent from 1992 to 2006. We must highlight the progress in coverage of these social programs, but it is also important to stress, as has been pointed out before, that these are not an adequate substitute to social security in general, for they do not offer the same benefits as their formal counterpart.

Table 5 2006 Coverage by social security and social programs

1 Percentage of households with coverage 2 Percentage of households with at least one member with coverage 3 Percentage of households where the head of household receives a medical service benefit 4 Others refers to: Pemex, Army, Marine and Universities Note: these indicators are not exclusive, therefore they cannot be added. The case can arise, for example, where a household member has access to Seguro Popular and the head of household has access to IMSS Source: CONEVAL estimations based on the 2006 ENIGH

The mentioned social programs have covered part of the population unprotected by formal social security. However, two major challenges prevail: The first is that, combining the social programs, focused in general, and formal social security (IMSS and ISSSTE) 50.1 percent of Mexicoâ&#x20AC;&#x2122;s families still have no full coverage of any kind. The second challenge is it seems two parallel and differentiated social protection worlds are being created and institutionalized: a system for workers affiliated to institutions such as the IMSS or the ISSSTE, whose coverage 37

practically hasnâ&#x20AC;&#x2122;t changed in 15 years, and another for the poor population, whose coverage has grown significantly, although without a clear coordination between all these actions and programs; but most of all, without the full benefits of formal social security being universal. Table 6 Households according to coverage by social programs and social security, 1992 and 2006

Regarding full coverage, this situation will be hard to solve in the middle term. Social security will grow if the number of formal jobs increases. But economic growth has been very low in the last years and it is not foreseen it will revert strongly in the following years. But it is also difficult to claim growth in itself could cover the totality of families by this mean. Not even during Mexicoâ&#x20AC;&#x2122;s periods of greatest growth has it reached a broad coverage by formal social security. Regarding the second aspect, although focalized social programs have helped families in poverty conditions, when we analyze social development as a whole â&#x20AC;&#x201C; social security and focalized social programs- we observe they are two distant worlds, with little connection between them, with different qualities and coverage, 38

as has been mentioned. Fulfilling universal coverage to social security and equal opportunity by this mean would seem difficult. 1.8 Inequality, Social Cohesion and poverty maps in Mexico 1.8.1 Inequality and Social Cohesion Social cohesion is a complex and multidimensional phenomenon whose concept has different defined in different ways. For some, it has to do with the degree in which people feel part of a nation, region or community or else with solidarity, reciprocity and networks generated among individuals or even with the degree in which people participate in communities or in political life, with citizen awareness, the community of values, common goals or trust in institutions itself16. But social cohesion has also been understood as the degree in which people in a society are being included, excluded or marginalized through direct discrimination mechanisms, or geographical marginalization or opportunities isolation, among others. Different to other concepts, the multiplicity of views on this phenomenon has to do with the lack of a universally accepted conceptual body to sustain the same definitions of social cohesion as well as the way it is measured. ______________ 16

Alducin, Enrique (2001) “Social cohesion, democracy and trust. In: De María and Campos, Mauricio y Sánchez, Georgina (eds.) Are Mexicans united? The limits of social cohesion. ("Cohesión social, democracia y confianza". En: De María y Campos, Mauricio y Sánchez, Georgina (eds.) ¿Estamos unidos los mexicanos? Los límites de la cohesión social.) Mexico. Editorial Planeta Mexicana, publishers. Atkinson, Tony et. al. (2002) Social indicators. The EU and social inclusion. UK. Oxford University Press. Interamerican Development Bank (Banco Interamericano de Desarrollo, BID) (2005) Social cohesion in Latin America and the Caribbean. Analysis, action and coordination. (La cohesión social en América Latina y el Caribe. Análisis, acción y coordinación. Washington. Interamerican Development Bank (Banco Interamericano de Desarrollo). Recovered from: www.iadb.org (2007, May 24) Economic Commission for Latin America and the Caribbean (Comisión Económica para América Latina y el Caribe, CEPAL) (2007) Social cohesion; inclusion and sense of belonging in Latin America and the Caribbean (Cohesión social: inclusión y sentido de pertenencia en América Latina y el Caribe). Santiago de Chile. CEPAL. Easterly, Williams, Ritzan, Joseph and Woolcock, Michael (2006) Social cohesion, institutions and growth. Washington. Center for Global Development Feres, Juan Carlos (2006) Towards a social cohesion indicator system in Latin America. Project advance. (Hacia un sistema de indicadores de cohesión social en América Latina. Avance de proyecto.) Panama. Address presented during the seminar: Social cohesion in Latin America and the Caribbean: a peremptory revision of some of its dimensions, September 7 and 8.

However, there are coincidences between the specialists that in a more egalitarian society and with opportunities better distributed among the population, better conditions can be generated to develop cohesion amongst its members. This is why economic and social inequality, as well as the indicators on the degree of discrimination or on unequal participation of certain groups of the population in social activities, it is usually used as an indicator of limited social cohesion, as is shown on Table 1. Mexico has been a country with a high concentration of income, and even in its recent evolution this situation has not changed. The opportunities the country could generate cannot be taken advantage of by all families in equal measure. The information on Table 7 shows Mexico is one of the countries where income presents a greater concentration. This situation is shared with several Latin American and African countries. Although on Table 8 we see an improvement in the Gini index from 1992 to 2006, the evolution of the inequality indexes has remained practically constant during this period. That is, the distribution of income in Mexico is as unequal as it was 15 years ago. Table 7 Gini index value for selected countries Country

Gini Index

Year

Source: 2004 and 2005 United Nations Human Development Report

Table 8 Income inequality measurements in Mexico 1992-20061

1 The income metric corresponds to the total net income per capita defined by the CTMP. Source: CONEVAL estimations based on the 1992-2006 ENIGH’s. Note: The marginal difference between the Gini coefficients reported on Table 7 and Table 8 for Mexico in 2005, is due to the fact the figures come from different sources.

Besides income, inequality in access to opportunities is also a sign of lack of social cohesion. Table 1 shows that the percentage of women in the Union Congress has increased, which shows greater participation and opportunities for women in Mexico’s social environment and decision-making circle. But equal opportunity levels reflect that in 2006 there was still a significant gap between men and women’s participation in the economic and social spheres. This gap has also been found between income, decisions at home and access to senior positions.17

_________ 17

National Council to Prevent Discrimination, Studies, Legislation and Public Policies Joint Chief Executive Office (Consejo Nacional para Prevenir la Discriminación, Dirección General Adjunta de Estudios, Legislación y Políticas Públicas). Gender Discrimination Prevention and Sanction Strategy (Estrategia de Prevención y Sanción a la Discriminación de Género). Analysis and Proposals, based on the SEDESOL-CONAPRED First Nacional Survey on Discrimination in Mexico (Análisis y Propuestas, a partir de la Primera Encuesta Nacional sobre Discriminación en México de SEDESOL- CONAPRED). Work document No. E-12-2006. Mexico, 2006, 111 pp.

Table 1 also shows one of the variables on discrimination estimated with the First Survey on Discrimination in Mexico (Primera Encuesta sobre Discriminación en México), developed by the Ministry of Social Development (SEDESOL) and the National Council to Prevent Discrimination (Consejo Nacional para Prevenir la Discriminación, CONAPRED) in 2005. This first collection of data shows almost one third of the people in disadvantaged groups said to have suffered some kind of discrimination during the year prior to the survey.

In summary, social inequality expresses itself in multiple fields. First, income inequality threatens wellbeing not only because it increases poverty, but because it reflects on the inequality of access to basic services, on the quality of these services, on social and economic opportunities, on the day to day treatment and on access to social rights.

1.8.2

Income poverty maps: Incidence

Pursuant to the LGDS, and in order to carry out for the first time an official poverty measurement at state and municipal level, the CONEVAL has developed income poverty estimation works in these disaggregation levels, using an econometric procedure elaborated by Elbers et al18. This estimation allows strengthening the direction of a better economic and social policy, and offers the opportunity to carry out social development monitoring in states and municipalities.19 __________ 18

Elbers, Chris, Lanjouw, J.O., and Lanjouw P. “Micro-level estimation of poverty and inequality” in Econometrics 71 (Econométrica 71), 2003, 355-364 pp. 19

Székely Pardo Miguel and López Calva Luis Felipe et. al. Carried out the first poverty map exercise with 2000 information. “Putting income poverty and inequality on the Mexico Map” in Mexican Economy (“Poniendo a la pobreza de ingresos y la desigualdad en el mapa de México” en Economía Mexicana), Nueva Época, CIDE, vol. XVI, no, 2, second semester, Mexico, 2007, 239-303 pp.

Map 1 State incidence of the population in patrimony poverty situation, 2005

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count and the 2005 ENIGH

On Table 9 we can appreciate that the entity with the greatest incidence of food poverty is the state of Chiapas, where 47.0 percent of its population is in this situation. Following it are the states of Guerrero with 42.0 percent, Oaxaca with 38.1, Tabasco with 28.5 and Veracruz with 28.0. On the other hand, the states with the lowest incidence of food poverty are Baja California with 1.3 percent, Nuevo Le贸n with 3.6, Baja California Sur with 4.7, Federal District (Capital City) with 5.4 and the states of Coahuila and Chihuahua with 8.6 percent.

Table 9 Estimation of the poverty incidence in people at state and national level using the imputation methodology, 2005

National estimations correspond to the 2005 ENIGH. nd

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count and the 2005 ENIGH

The order of the capabilities poverty situation is practically the same as for food poverty. Ranking first is Chiapas with 55.9 percent, followed by the state of Guerrero with 50.2 and Oaxaca with 46.9. According to estimations, the states with the greatest patrimony poverty are Chiapas, Guerrero and Oaxaca, with 75.7, 70.2 and 68.0 percent, respectively. This information enables to clearly see that the fight against the great inequality observed between the states of the Mexican Republic constitutes a major challenge for our country. While Baja California has an estimated average monthly income of 4,998 pesos, Chiapas only reaches 1,215 pesos: in Baja California the incidence of patrimony poverty is 9.2 percent, while in Chiapas it amounts to 75.7 percent. Map 2 Municipal incidence of the population in patrimony poverty situation, 2005

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count and the 2005 ENIGH.

The methodology to estimate poverty used for the calculation of the incidence of poverty and poverty levels of the Mexican states, allows obtaining estimations at municipal level for the year 2005. The greatest incidence of poverty is concentrated in the southern and southeastern state municipalities, as can be seen on Map 2. We also see that the municipalities with the greatest poverty, especially food poverty, are located in mountainous and hard to reach areas. That is where the greatest incidence of poverty in Mexico lies, with the greatest cost in having aid reach them. Thus, public policy should be focused on solving the problems generated by the geographical dispersion of the population in most need and foster its integration to social development.

Table 10 Estimation of the incidence of poverty in people of the 20 municipalities with highest and lower incidence of food poverty, using the imputation methodology, 2005 20 municipalities with the highest incidence of population under the food poverty line Federal state

Municipality

Total population

Estimated percentage of population under the food poverty line

Estimated number of people under the food poverty line

Note: These figures are estimations, therefore they must be taken with approximations of the population in each municipality Source: CONEVAL estimations based on the 2005 2nd Population and Housing Count and the 2005 National Household Income and Expense Survey (ENIGH).

1.8.3 Income poverty maps: Population

The maps above show where the highest percentages of poverty in Mexico are located, regardless of the size of the municipalities. Thus, the municipalities of Santiago el Pinar in Chiapas and of San Pablo Cuatro Venados en Oaxaca, for example, have a high incidence of poverty, for they have a patrimonial poverty of 96.5 and 96.0 percent, respectively. However, the total population of these municipalities in 2005, according to the INEGI, was 2,845 and 1,267 inhabitants, respectively. This means the number of people in poverty was 2,745 in Santiago el Pinar and 1,216 in San Pablo Cuatro Venados in 2005.

However, for example, if we take the municipality of Acapulco de JuĂĄrez in Guerrero, it only has an incidence of patrimony poverty of 60.1 percent, but given that municipalityâ&#x20AC;&#x2122;s population was 717,766 people that same year, the population in patrimony poverty conditions was 431,377 people, 355 times more people in poverty than in San Pablo Cuatro Venados.

Therefore, to have a complete picture of Mexicoâ&#x20AC;&#x2122;s poverty, it is also important to take into account the poverty maps with information regarding the number of people and not only the incidence. As is shown on Map 3, the poverty map with population is very different to Map 2 which shows incidences. Now poverty tends to concentrate in more urban municipalities, although poverty is still present in rural areas.

Table 11 Estimation of the population in poverty conditions at state and national level using the imputation methodology, 2005

National estimations correspond to the 2005 ENIGH; therefore, the sums can differ from the national totals, for the estimation by federal state is made through statistical imputation methods nd Source: CONEVAL estimations based on the 2005 2 Population and Housing Count and the 2005 ENIGH.

Map 3 Municipal population in food poverty situation (number of people), 2005

Source: CONEVAL estimations based on the 2005 2nd Population and Housing Count and the 2005 ENIGH.

On Table 11 we can now see poverty by number of persons, by Federal State. Standing out is the State of Mexico, Veracruz, Chiapas and Puebla are the states with a greater number of people in poverty situation in 2005; for these states, although the incidence â&#x20AC;&#x201C;percentage of people in poverty situation- is not among the highest at national level â&#x20AC;&#x201C;except for Chiapas-, it is by the number of poor people, which derives from the total population in these federal states.

1.8.4

The multidimensionality of poverty: The 2005 Social Gap Index

Taking into account that the LGDS sets forth that poverty measurement shall consider the multidimensional nature of poverty, the CONEVAL constructed the Social Gap Index,20 incorporating education, access to health services, basic services, home quality and services, and home assets. With this purpose, the 2005 2nd Population and Housing Count was used.

The Social Gap Index is a needs indicator estimated at three geographical aggregation levels: state, municipal and local. With this, we intend to contribute to the generation of information for better decision making in matters of social policy at different levels of operation, enabling the location of priority attention areas.

Table A 5 on the Appendix shows the multidimensional poverty indicators for each state, as well as the Social Gap Index, which is a synthetic measurement of the dimensions considered. We see the states of Chiapas, Guerrero and Oaxaca have a very high gap index, which also matches its high incidence of poverty, measured by income.

As can be seen on Map 4, the Social Gap Index, estimated at locality level, points out a geographical distribution of poverty in its other dimensions, where the highest gaps are concentrated in Mexicoâ&#x20AC;&#x2122;s south-southeast and mountainous regions. As in income poverty, this indicator suggests social policy should consider the problem of the lack of access to isolated and disperse communities.

________ 20

The Social Gap Index is constructed using the Principal Component Analysis statistical technique.

Map 4 2005 Social Gap Index (Localities)

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count and the 2005 ENIGH.

Social gap and road infrastructure

An aspect that is highly correlated to the geographic concentration of people in situation of poverty and social gap, is the accessibility to means of communication. The complicated orography of the national territory, especially that of the southern states and the complex mountain range network that extends from the central region to the north of Mexico, for many years have represented an impediment to extend the national road network, with low integration to services and markets related to the low levels of income and wellbeing. 52

Map 5 Road Infrastructure

Localities with a very low social gap degree are in average 2.1 kilometers away from a paved road; localities with a low gap level are 3.1 kilometers away; low are 5.8 kilometers away; medium are 5.8 kilometers away; with a high gap level are 10.5 kilometers away, and with a very high social gap index are in average 16.9 kilometers away from the closest paved road. The 10 localities with the highest gap are in average 28 kilometers away. The locality with the highest social gap degree, el Palmari in the municipality of Batópilas, Chihuahua, is 43.6 kilometers away. The above proves a population with a high gap level is usually isolated from the means of communication, therefore, it is unlikely it will be integrated to the country’s economy.21 ____________ 21

Aragonés, M. and Ek Garfias, F. 2008. “Dispersion and Social Policy” (“Dispersión y Política Social”). Mimeo.

As can bee seen on the map, there are ample areas in the national territory which, although they do have paved roads or even dirt roads, are not covered by highways, same that match the municipalities with the highest incidence of poverty.

Difficult access to isolated municipalities and localities causes a double-fold problematic: on the first place, given families with high levels of poverty and social gap degrees live isolated populations, government aid should be present. However, providing public services to these localities is more expensive and problematic than taking them to areas with better access, which causes an evident vicious circle.

The second problem is that the lack of access causes transportation costs and therefore difficult access and communication between markets. The above inhibits investment in areas with high social gap degrees, which implies the existence of another vicious circle of low job creation and productivity in the areas where they are most needed.

In this sense, social policyâ&#x20AC;&#x2122;s challenge is quite big: the population with the highest incidence of poverty and social gap degrees is in hard access and disperse localities but taking services and investment to these areas entails very high costs.

1.9 Poverty and the Indigenous population According to information available from the 2005 2nd Population and Housing Count and the poverty maps generated by the CONEVAL, in municipalities with a greater concentration of population speaking an indigenous language, it is common to find a higher incidence of income poverty and higher social gap indexes. Although we canâ&#x20AC;&#x2122;t speak about causality relationships between poverty and social gap degrees and the percentage of indigenous population in this document, we 54

must place particular attention on the social gap degree and poverty conditions in which these communities live.

Map 6 shows the municipalities with a higher concentration of indigenous population mostly match the municipalities with the highest incidence of income poverty and very high social gap indexes, according to Map 2.

Map 6 Percentage of population 5 years of age and older speaking an indigenous language

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count

Chart 11 Food poverty and indigenous population by municipality, 2005

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count

Poverty among the indigenous population and difficult access to roads again has implications on the public services provided. According to the World Bank (2004)22, the schools with the worst quality in Mexico are precisely the schools targeted to the indigenous population; additionally, as seen on Table 1, malnutrition is more acute among indigenous than among the general population. 1.10

Environment

The national development process demands harmonizing economic growth and the wellbeing of people, families and communities with environmental sustainability. The Mexico Millennium Development Goals Report corresponding to the year 2006 enables documenting, according to the trends prevailing since the early nineties, some progresses and achievements in the task of guaranteeing environmental sustainability throughout the national territory. _______ 22

World Bank. 2004. “Chapter 4: Public Expenditure, Poverty and Inequality” in Poverty in Mexico: an Evaluation of the Conditions, Trends and Government Strategies, Mexico (Report no. 28612-ME). (“Capítulo 4: Gasto Público, Pobreza y Desigualdad” en La pobreza en México: una Evaluación de las Condiciones, Tendencias y Estrategias del Gobierno, México, (Reporte 28612-ME).) World Bank 2004, 350 p.

One of the great challenges Mexico must FACE in the short and medium term consists of the need to revert the negative trends accumulated during decades and that affect the nation’s overall sustainable environmental development. In spite of the major efforts that have been developed during the last years, the process of accelerated deforestation, soil degradation, natural ecosystem deterioration and the problems derived from waste dumped in rivers, oceans and the atmosphere prevail.

There is sufficient scientific evidence on the damaging effect the structuring modalities of the national development models and globalization have had on the world climate systems, especially on the changes observed in the precipitation and distribution of hydrological resources patterns in the planet as a consequence of greenhouse gas emissions and tropical forest and forest deforestation.

According to information presented in the 2007-2012 National Development Plan, there is a great gap in the matter, which affects the provision of potable water available per inhabitant in Mexico, which dropped from 4,841 m3/year in 2000 to 4,573 m3/year in 2005. According to estimations by the National Water Commission (Comisión Nacional del Agua, CONAGUA) and the CONAPO, potable water will decrease up to 3,705 m3/year by 2003.

Furthermore, factors such as economic growth, pollution and overexploitation of water-bearing stratums, as well as deforestation and alterations in precipitation patterns worldwide could diminish even further the amount of water available per inhabitant. Additionally, there is an alarming lack of rationalization and efficiency of the potable water distribution and generation network, for leakage ranges between 30 and 50 percent of the water available at national level, and only 15 percent of industrial residual waters are treated. Facing the magnitude of these challenges, if public policy does not respond appropriately to Mexico’s needs, potable water 57

supply could represent a major limitation to economic growth and development in coming years.

The social development process demands for environmental sustainability to also be reflected on the daily micro-social sphere of people. Two positive aspects worth mentioning are that the great majority of Mexican homes cook with combustible materials which do not affect their health and which has decreased the proportion in which coal or wood are used as fuel: in 1990, 23.4 percent of home inhabitants in Mexico lived in houses cooking with firewood or coal, proportion that dropped to 19.8 percent in the year 2000 and to 15.8 percent in 2006, as shown on Table 1.

Undoubtedly, one of the great challenges Mexico will face in the future is the creation of public policies capable of promoting economic development without disturbing even more the planetâ&#x20AC;&#x2122;s fragile ecological balance.

EVALUATION ON SOCIAL DEVELOPMENT POLICY IN MEXICO

The latter chapter showed the progresses in some of Mexicoâ&#x20AC;&#x2122;s social development dimensions; but it also pointed out its great challenges. This chapter has as a purpose to present a general diagnosis of the countryâ&#x20AC;&#x2122;s social development policy and programs in order to identify some of the key elements which would allow improving its management and results.

Firstly, we present the strengths of social development policy, in terms of government expenditure, the actions instrumented to achieve greater efficiency and effectiveness in the use of public resources and the institutionalization of Social Development Policy. Secondly, we present the main challenges faced by social policy in matters of the problematic in defining social development, the existing regulations and the lack of fulfillment of social rights; the dispersion of 58

programs; the distributive incidence of expenditure and of federal programs; and the lack of institutional coordination.

The third item presents a summary of the main results of the 2007-2008 external evaluations on federal programs. This summary is useful to pinpoint the specific challenges of social programs that must be tended to for the improvement of government management, but most of all, in order to transform social development into an effective channel for the progress of Mexicoâ&#x20AC;&#x2122;s social development indicators. Finally, we present a brief diagnosis on the Living Better (Vivir Mejor) strategy.

2.1 Strengths of Social Development Policy

2.1.1 Expenditure in Social Development

The growing importance of social development policy in the last federal administration is reflected on the evolution of expenditure in the matter. This item presents the trend, composition and classification of social development expenditure from 1990 to 2007. Expenditure on social development23 shows a growing trend in the past two decades (see Chart 12), with a 276 percent growth in real terms from 1990 to 2007. From 1990 to 1994, social expenditure grew 91 percent, experienced a 23 percent fall from 1994 to 1995, a subsequent recovery from 1996 to 2007, going from 537 billion pesos in 1996 to 1,136 billion in 2007.24 ______ 23

From 1990 to 2002, expenditure in social development functions presents the following classification: Education, Social Security, Provision and Social Aid, Health, Labor and Regional and Urban Development. As of 2003 there is a new classification, which is the following: Education, Social Security, Urbanization, Housing and Regional Development, Health, Social Aid and Potable Water and Sewer System 24

2007 constant pesos deflated with the National Consumer Price Index calculated by Banco de MĂŠxico.

Chart 12 1990-2007 Social Expenditure in Mexico (2007 billion pesos)

The composition of the projected expenditure has modified significantly since early last decade. Expenditure on social development compared to the total projected expenditure went from 38 percent in 1990 to close to 60 percent in 1998, proportion that has stayed relatively constant in the last decade.

In 2007, expenditure in social development represented 59 percent of the total projected expenditure, which proves the importance of social development policy within the governmentâ&#x20AC;&#x2122;s priorities (Chart 13). This increase in social expenditure helps explain the progress in basic service coverage observed in the previous section.

Chart 13 Social Expenditure in Mexico as a proportion of the total projected expenditure

Source: CONEVAL elaboration with data by the Center for the Studies of Public Finances of the Chamber of Deputies, with information by the Federal Public Account (1990 to 2006) and the Federal Public Treasury Account.

Chart 14 presents the evolution of expenditure of the main functions in matters of social development, based on the classification by the Federation Expenditure Budget (Presupuesto de Egresos de la Federaci贸n, PEF). We can see that the greatest growth has taken place in the educational and health sector compared to provision and social aid.

Chart 14 1990-3007 Social Expenditure according to functional classification in Mexico (2007 billion Mexican pesos)

2.1.2 Focalization, decentralization and aid to basic capabilities

The economic crisis during the eighties diminished the Mexican governmentâ&#x20AC;&#x2122;s expenditure capability, accentuating the challenge of strengthening aid to society in an environment of resource scarcity. In this scenario, since late that decade, the National Solidarity Program (Programa Nacional de Solidaridad) raised the need of public resource focalization towards the regions with greater gaps, and that were not in possibilities to directly benefit from the structural reforms in economy, and the consequent growth expected from them. Said program aimed to strengthen the infrastructure in those regions and undertook a diversity of other actions. Geographical focalization continued with the Contributions Fund for Federal States 62

and Municipalities (Fondo de Aportaciones para Entidades Federativas y Municipios) which began in 1997.

That same year, the Progresa program began, focalizing localities, homes and people to strengthen the basic capabilities of the poor population. Likewise, focalization criteria were incorporated to existing programs such as the Milk Social Provision Program (Programa Abasto Social de Leche) and the Rural Provision Program (Programa Abasto Rural), in order to tend to the poorest population in greater measure. In the case of the PROGRESA/Oportunidades Program, the social benefit has been significant. This Federal Program is considered as highly progressive.25 Likewise, according to external evaluations, it has had a positive impact on school enrollment,26 nutrition27 and health28 of girls and boys in rural areas. However, effectiveness in urban areas has been limited. On the other hand, the Milk Social Provision Program has had an impact on the reduction of anemia in girls and boys under the age of three as a result of milk fortification in 2002.29 The external evaluation on the DICONSA 2006 Rural Provision Program has shown that the estimated national savings margin average is approximately 9 percent.30 __________ 25

Scott John. Redistributive efficiency of programs against poverty in Mexico. (Eficiencia redistributiva de los programas contra la pobreza en México). Work Document No.307. Mexico, D.F. Economy Division, Center for Economic Research and Education (Centro de Investigación y Docencia Económica, CIDE), 2004. 26

Schultz, P. “The impact of Progresa on school enrollment” in More Opportunities for poor families. Results Evaluation of the Education, Health and Food Program. (“El impacto del Progresa sobre la inscripción escolar”, en Más Oportunidades para las familias pobres. Evaluación de Resultados del Programa de Educación, Salud y Alimentación.) Washington, D.C., International Food Policy Institute (IFRPI), 2000. 27

Rivera J A, Sotrés-Alvarez D, Habicht JP, Shamah T, Villalpando S. Impact of the Mexican Program for Education, Health and Nutrition (Progresa) on rates of growth and anemia in infants and young children. A randomized effectiveness study. JAMA 2004. 28

Gertler, Paul. “The impact of PROGRESA on health”, in More Opportunities for poor families. Results Evaluation of the Education, Health and Food Program. (“El impacto de PROGRESA sobre la salud”, en Más Oportunidades para las familias pobres. Evaluación de Resultados del Programa de Educación, Salud y Alimentación.) Washington, D.C., International Food Policy Institute (IFRPI), 2000. 29

Villalpando S, Shamah T, Rivera J, Lara Y, Monterrubio E. “Fortifying milk with ferrous gluconate and zinc oxide in a public nutrition program reduced the prevalence of anemia in toddlers” in J Nutr 2006;136: 26332637 pp. 30

Grupo de Economistas y Asociados. External Evaluation of the Rural Provision Program, DICONSA S.A. de

C.V. (Evaluación Externa del Programa de Abasto Rural, DICONSA S.A. de C.V.) Fiscal Year 2002. Mexico, D.F. 2003

Likewise, as has been shown, the coverage of basic water, electricity, education, access to health and sewage services, have improved in the last 14 years, especially for the poorest population. Although the coverage levels of the poorest families and areas are still substantially lower than those in the richer areas, the better focalization of infrastructure has helped to narrow the social gap. Among the most important events in matters of social policy during the analyzed period, the decentralization of federal resources stands out. In 1995, the federal government announced a series of institutional reforms under the title of New Federalism whose primary objective was the decentralization of social expenditure, with the premise of improving public expenditure efficiency and effectiveness in a subsidiary system.

In the context of a political system that was evolving towards more democratic ways and within the framework of major institutional reforms, the Fiscal Coordination Law was modified to give way to the creation of Branch 33, called Federal Contributions for Federal States and Municipalities (Aportaciones Federales para Entidades Federativas y Municipios). As of 1998 a rapid increase of resources for states and municipalities took place, as a result of the transference of resources.

The importance of federal resource decentralization to social development policy, is in the formal nature of their progressive distribution and social nature.31 . 31 Scott. John, “Decentralization, social expense and poverty in Mexico”, in Public Management and Policy.

(“La descentralización, el gasto social y la pobreza en México”, en Gestión y Política Pública.) Volume XIII Number 3, Second Semester, 2004.

Up to date, Branch 33 integrates eight Funds: two linked to educational policy actions, Contributions Fund for Basic and Normal Education (Fondo de Aportaciones para la Educación Básica y Normal, FAEB) and Contributions Fund for Technological and Adult Education (Fondo de Aportaciones para la Educación Tecnológica y de Adultos, FAETA); two linked to health services and social aid, Contributions Fund for Health Services (Fondo de Aportaciones para los Servicios de Salud, FASSA) and Multiple Contributions Fund (Fondo de Aportaciones Múltiples, FAM), respectively; one to social infrastructure, Contributions fund for Social Infrastructure (Fondo de Aportaciones para la Infraestructura Social, FAIS); one linked to the strengthening of capabilities and financial management of municipalities and demarcations, Contributions Fund for the Strengthening of Municipalities and Territorial Demarcations of the Federal District (Fondo de Aportaciones para el Fortalecimiento de los Municipios y de las Demarcaciones Territoriales del Distrito Federal, FORTAMUNDF); one to public security, Contributions Fund for Public Security of the States and the Federal District (Fondo de Aportaciones para la Seguridad Pública de los Estados y del Distrito Federal, FASP); and another targeted to federal state financial reorganization and pension systems, Contributions Fund for the Strengthening of Federal States (Fondo de Aportaciones para el Fortalecimiento de las Entidades Federativas, FAFEF).

In 2007, the resources assigned to Branch 33 represented over 20 percent of the federal projected expenditure, expenditure exercised by states and municipalities

The decentralization of social expenditure has important advantages, some of them are: greater freedom to states and municipalities to use resources, and the potential to achieve greater effectiveness and efficiency in government public expenditure by bringing rulers closer to the needs of the citizenship. However, we should acknowledge we currently do not count with a systematic evaluation system for the results of the resources coming from federal contributions towards states 65

and municipalities. In this sense, the measurement of the federal resource decentralization policy in the social development field is still a pending task.

2.1.3 Social Development Policy Institutionalization

Health and education institution in Mexico have had notable continuity; however, expense in social programs has tended to change radically from one administration to another, which makes it difficult to clearly understand the in the short, medium and long term direction and objectives of social development policy, as well as to have knowledge on its effectiveness. Likewise, during the 20th Century, the lack of transparency and accountability in social expenditure persisted.

Notwithstanding the above, in the past years the institutionalism of social development in Mexico has improved significantly. In 2004 the LGDS was passed with the approval of all the political parties represented by the Union Congress, whose objective is to:32

Guarantee the full exercise of the social rights consecrated in the Political Constitution of the United Mexican States, ensuring access to all the population to social development;

II.

Point out the Governmentâ&#x20AC;&#x2122;s obligations, establish the institutions responsible for social development and define the general principles and guidelines which Social Development National Policy shall submit to;

III.

Establish a National Social Development System where the municipal, federal state and federal governments participate;

IV.

Determine the competence of municipal governments, of federal states and of the Federal Government in matters of social development, as well as the basis for the agreement of actions with the social and private sectors;

Foster the social sector of economy;

VI.

Regulate and guarantee the provision of the goods and services contained in the social programs;

VII.

Determine the basis and foster social and private participation in the matter;

VIII.

Establish evaluation and follow-up mechanisms for Social Development National Policy programs and actions, and

IX.

Promote the establishment of instruments for access to justice, through

popular

citizen

complaint,

matters

social

development.

In this sense, the LGDS lays the foundations for a State social development policy, it institutionalizes various public policy processes, supports the coordination between the levels of government and institutions of the Executive power and promotes evaluation and transparency.

________ 32

1st Article of the General Law for Social Development.

The LGDS considers, for the first time in Mexico, the systematic evaluation of social development policy in order to periodically revise compliance with the social objective of the programs, goals and actions of Social Development Policy, to correct, modify, add, reorient or suspend them totally or partially, and the CONEVAL is created for said purpose.

Likewise, it considers the norm to monitor programs by requesting results, management and services indicators. Results indicators must reflect compliance with the social objectives of the programs, goals and actions of Social Development Policy, while the management and services indicators must reflect the procedures and quality of said programsâ&#x20AC;&#x2122; services.33

A relevant point in the institutionalization of Social Development Policy is that the CONEVAL is empowered to issue any suggestions or recommendations it deems fit to the Federal Executive Power, allowing to strengthen the connection between the evaluation results and the feedback of the design and progress of social policies and programs.

Additionally, in order to consolidate and make social development policy evaluations operative, the CONEVAL, in coordination with the Ministry of Treasury (SHCP) and of Public Functions (SFP), issued in March 2007, the General Guidelines for the Evaluation of Federal Programs. The purpose of the ordainment consists of regulating the external evaluation of programs. Thus, the permanent and systematic evaluation of social development policy is now a fundamental tool to constantly improve its performance and to know which actions are or arenâ&#x20AC;&#x2122;t effective in solving the huge social and economic problems which still afflict Mexico. ______ 33

Article 74 and 75 of the General Law for Social Development.

These regulatory dispositions complement the creation in 2007 of the Performance Evaluation System (SED) which mandates the Budget and Treasury Responsibility Law. The SED’s objective is to consolidate an efficient information system for decision making that strengthens the connection between the budgetary process and planning, programming, execution, monitoring and evaluation of public policies.

Among the SED’s main instruments are the monitoring of results of budgetary programs, the evaluation of programs, institutions and public policies, as well as a set of actions for improvement and modernization of the public work, through the Medium Term Program (Programa de Mediano Plazo, PMP).

Additionally, these types of actions have been made extensive to the Federal States by means of the Constitutional Reform in matters of public expenditure and control published on May 7, 2008, on the Official Journal of the Federation (Diario Oficial de la Federación), as well as to the reforms to the Federal Budget and Treasury Responsibility Law, which strengthens the evaluation of Social Development Policy as a whole.

Currently, the results of state and municipality social development programs and policies are unknown, for there has been no external evaluation. States and municipalities must advance in consolidating –and in many cases initiating- an external evaluation system for social programs and policies in order to improve their public policy tools and improve accountability.

2.2 The challenges of social development policy in Mexico

In spite of the progress social development policy has had, Mexico faces major challenges in economical and social matters, among them, combat poverty permanently, reduce historical inequality, generate more and better jobs and improve the population’s wellbeing in a systematical manner and contribute in satisfying social rights. This section analyses said challenges. 2.2.1 Problems with the definition of social development, regulations and compliance with social rights

Mexico has a set of legal dispositions that identify its public policy general objectives. Thus, with a different degree of precision, the Political Constitution of the United Mexican States sets forth the rights to satisfy the need for food, health protection, enjoyment of a decent and respectable house, to receive education, to information, to work and recreation, among others.34

In spite of their obligatory nature, the lack of a real exercise of these rights by major groups of population and the high inequality in their compliance has been characteristic of the Mexican State. An example of exclusion of the enjoyment of social rights corresponds to food poverty: as has been mentioned, in 2006 13.8 percent of the total population was unable to acquire, even if devoting their entire income to this purpose, a food basket to satisfy their nutritional needs. On the other hand, inequality in the compliance of basic rights can be shown with the highest and lowest municipal literacy rates: while 98 percent of men in the municipality of Cuautitlán, Estado de México, can read and write, only 20 percent of women have this capacity in the municipality of Meltatónoc, Guerrero.35 ____________________________________________ 34

United Nations Programme. Report on Human Development: Mexico 2002, UNDP, Mexico, 2003, 146 pp. 35 Idem.

In spite of the advancement the LGDS represents to institutionalize Social Development Policy in Mexico, it does not define in its content what is to be understood

social

development,

social

policy

social

expenditure,

indispensable elements to analyze the appropriate public issues. However, it is reasonable to conceive social development as the equitable and sustainable extension of autonomy and of the choice opportunities of people, within the framework of the full exercise of their rights; social policy as those public action targeted to protect and promote social development, and social expenditure as that which is concentrated in education, health, social security, housing and social aid.36

Valid legislation, particularly the rights set forth by the Political Constitution of the United States, reveals the priority assigned to different basic capabilities, and at the same time works as a guideline for concrete public policies. Thus, we should wonder if in Mexico basic capabilities are adequately recognized in the legal framework.

The Constitution sets forth the different types of protection individuals shall enjoy from in the face of others and the State, specifying the limits of their freedom, and defining their rights of social nature (see Table 12). Basically, public policy would have as a central objective, to bring validity to this group of rights, among others, through the general framework for said public policy, as the National Development Plan or through specific programs.

________________________ 36

De la Torre, Rodolfo, L贸pez-Calva Luis Felipe and Scott John. Social expense in the General Law for Social Development, (El gasto social en la Ley General de Desarrollo Social), Working Papers SDTE 331, Economy Division, CIDE, Mexico. 2005.

Table 12 Social Rights in the Constitution

Social right

Reference

Right to education

Art. 3

Right to health protection

Art. 4

Right to an adequate environment for their development and Art. 4 wellbeing Right to satisfy their need for food, health, education and wholesome Art. 4 recreation in girls and boys Right to enjoy a decent and respectable home

Art. 4

Right to information guaranteed by the State

Art. 6

Right to dignified and socially useful work

Art. 123

General minimum salaries shall be sufficient, without taking into Art. 123 account neither gender nor nationality Source: Political Constitution of the United Mexican States

Despite its importance, the constitutional precepts do not specify sufficiently the scope of social rights, the circumstances that make them demandable and the specific ways in which the State is bound to tend to them.37 In consequence, given this imprecision, it is necessary to go beyond its text to understand the nature of social rights in Mexico.

Unfortunately, the LGDS, which in principle could correct some constitutional limitations, practically leaves deficiency unchanged.

Given the Constitution is not clear enough in the determination of some social rights, we face consistency problems. For example, the right to social security and recreation the LGDS speaks about. The first of these rights is not considered in the 72

Constitution and the second only refers to girls and boys, besides the fact it isn’t explained how to understand and exercise said right.

Part of the problem is that in different laws recognized social rights are sometimes listed in terms of goods and services (food, housing and education), others in the shape of actions or states of people (work and health), and some in terms of the perceived wellbeing (enjoyment of the environment).

Faced by the lack of clarity of social rights to guide public policy in general, a possible strategy to structure it better would be to explicitly link its programs to those social rights that define relatively specific objectives. In other cases we would need to replace the ordainment by the legislation with other elements.

From this perspective, we should wonder up to what point government plans match social rights. An answer to this question is on Chart 13.

_______ 37

De la Torre Rodolfo. Social Development Law. Analysis and Evaluation of PAN, PRI and PRD Draft Bills. (Ley de Desarrollo Social. Análisis y Evaluación de Anteproyectos de Ley del PAN, PRI y PRD.) Human Development Papers. No. 4. SEDESOL. Mexico. 2002.

Chart 13 2007-2012 Social rights and government plans Social rights Art. 3. Right to the protection of health

Government Plans Improve the populationâ&#x20AC;&#x2122;s health conditions. (4)

(1). Art. 2. Prolongation and improvement of the human quality of life (2). Art. 2. Right to health, medical care, protection of the means of sustenance and pension (3) Art. 3. Right to receive education (1)

Strengthen the capacities of Mexicans through the provision of sufficient and quality education. (4)

Art. 4. Right to an adequate

It is about maintaining the natural capital that enables

environment for their development and

the development and high quality of life for the Mexicans

wellbeing (1)

of today and tomorrow. (4)

Art. 4. All girls and boys have the right

Promote the wholesome and integral development of

to satisfy their needs for food, health,

Mexican children guaranteeing full respect to their needs

education and wholesome recreation

for health, food, education and housing, and promoting

for their integral development.

the full development of their capacities. (4) Foster the creation of multiple options for the recreation and entertainment of all Mexican society (4)

Art. 4. Right to enjoy a decent and

Broaden access to home financing for the poorest

respectable home. (1)

segments of population as well as to undertake construction

projects

orderly,

rational

and

sustainable development context for human settlements. (4) Art. 123 Every person has the right to

Promote State policies and generate the conditions in

a dignified and socially useful job; for

the labor market that foster the creation of high-quality

said purpose, the creation of jobs and

jobs in the informal sector. (4)

social organization for employment shall be promoted, according to the Law. Sources: (1) Political Constitution of the United Mexican States, (2) General Health Law, (3) Social Security Law, (4) National Development Plan (2007-2012).

The rights to health, education, work, housing and to the environment are referred to in the government plan to guide its actions, although it doesnâ&#x20AC;&#x2122;t specifically speak of rights. This does not mean the other social rights have not been considered at all, just that there was no evident mention of them. However, the fact that they are not mentioned in government plans doesnâ&#x20AC;&#x2122;t mean they are not tended to in specific programs.

The lack of fulfillment of social rights in the country arises partly because they are vaguely enunciated and mentioned both in the laws as in the government plans and programs. To attempt associating social rights with government plans would imply a citizenship approach to social policy. This means the recognition of social rights and individual and state responsibilities to satisfy them in an implicit or explicit social contract by belonging to a society.

From the above it is inferred that the objectives of social development policy are defined in a fragmented and disperse manner; basic capabilities which an individual should have access to, are not properly defined in the valid legislation, either in the Constitution or the secondary laws. Thus, under this legal framework, the government plans collect the legal ordainments imprecisely, lacking an adequate correspondence between social rights and the programs that would make them valid.

2.2.2 Program dispersion and lack of institutional coordination

Early 2007, the CONEVAL performed an exercise for initial systematization of the information available on federal social programs, building a database with variables such as type of aid, attention area, beneficiaries, coverage, focalization, regulations and budget. This information was obtained through different official sources such as the Operation Rules, guidelines, laws or regulations, program reports or memories and websites of the program coordinating dependencies. 75

The programs included for the analysis comply with the following criteria: a) they are contained in the 2007 Federation Expenditure Budget (PEF) Economic Functional Analysis of Programs; b) they are included in Appendixes 7, 17 and 19 of the 2007 PEF whenever they correspond to program or funds items, and c) they come from official sources (Presidency of the Republic, SHCP and the coordinating dependencies themselves).

Excluded were those PEF items that refer to an operative or administrative expenditure. Also excluded were the Funds of Branch 33 because they do not strictly represent federal programs and are direct contributions to federal states.

As can be seen on Chart 14, in 2007 the Ministry of Agriculture, Husbandry, Rural Development, Fishery and Food (Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación, SAGARPA); the Ministry of Public Education (Secretaría de Educación Pública, SEP) and the Ministry of Health (Secretaría de Salud, SSA) were the dependencies that coordinated the largest number of federal social programs. Little over 73 percent (145) of the programs were concentrated in five dependencies: the SAGARPA with 21 percent of the total; the SEP with 16 percent; the SSA with 15 percent; the SEDESOL with 11 percent, and bodies coordinated by the SHCP with 10 percent. The remaining 27 percent (34) percent of the programs is distributed throughout nine dependencies.

Table 14 Programs and their budget by dependency

Note: The budget assigned refers to the year 2007. Note: The Oportunidades and Temporary Employment Program (Programa de Empleo Temporal, PET) budget is distributed among the different dependencies that operate them, however, for purposes of the 2007 CONEVAL Inventory, they were grouped in SEDESOL. Source: 2007 CONEVAL Inventory (Inventario-CONEVAL).

The 2007 PEF assigned over 159 billion pesos to this group of federal social programs. 76 percent of the budget was concentrated in 85 programs under the SEDESOL, the SSA and SAGARPA. Out of the program total, close to 25 percent of programs have as attention area the agricultural sphere, 14 percent of programs are targeted to education, science and technology, 12 percent to the promotion of the economic or productive activity and 7 percent to infrastructure. On Chart 15 we see thereâ&#x20AC;&#x2122;s a significant number of federal programs in different areas of attention with a low budget. Chart 16 presents the vocation of programs according to attention area and their budgets.

Chart 15 Percentage of programs by attention area and budget

Source: 2007 CONEVAL Inventory (Inventario-CONEVAL 2007). Note: A program can tend to various areas and in some cases it is impossible to disaggregate the budget due to this variable.

The multiplicity of socio-economic problems afflicting Mexico could justify the great diversity of programs, but it would seem this diversity more than a benefit is a structural problem for social development policy. Except a small group of programs with huge budgets, it is evident there is great dispersion of resources throughout different programs, ministries and institutions, which means an atomization of the expenditure which can be translated into a lack of effectiveness and efficiency. For example, the fact that in 2007 there were close to 26 microcredit programs in the Federal Government, means:

a) Possible duplicities among programs b) Small scales, therefore they incur in high fixed costs c) Duplicity in bureaucratic apparatuses d) Major inter-institutional coordination problems, as well as within them

e) Significant problems in coordination with states and municipalities f) Difficulty in planning social development policy

Thus, today we have a large number of programs without having a clear diagnosis to sustain their reason to exist. Besides, the problem aggravates for each government of legislation has incentives to create new programs, with which the dispersion of expenditure, possible duplicities and coordination problems tend to increase systematically.

The above shows the need to institutionally and continuously count with evaluation and follow-up instruments for social programs allowing a comprehensive analysis of government activity in matters of social development. From the punctual study of the components of social policy, we would have solid basis for the improvement of public policy in this matter.

2.2.3 Distributive Incidence of Social Programs Professor John Scott38 analyses the distributive incidence of a subset of public programs and shows public expenditure in social matters is distributed with quite an ample variation, from highly regressive to highly progressive programs. The set of programs analyzed represent close to half the projected expenditure and they are classified based on their concentration coefficients. Through methodology, he shows how concentrated or regressive the resources targeted to different social items are. A positive coefficient means a regressive distribution and a negative coefficient means a progressive distribution. _____ 38

Scott, John. “Public Expenditure and Human Development” in 2008-2009 Report on Human Development in Mexico (“Gasto Público y Desarrollo Humano” en Informe sobre Desarrollo Humano México 2008-2009).

Chart 17 reports the said study’s reports and shows:

1. That all the analyzed ISSSTE programs â&#x20AC;&#x201C;regarding pension beneficiaries, active workers and health- are highly regressive, which confirms the information produced by Table 5.

2. That higher education is also highly regressive and the programs relative to IMSS pensions are a bit less regressive;

3. That there is a group of programs, among them health in hospitals, IMSS hospitals and electric subsidy, that are absolutely regressive;

4. That maternity and primary health programs and actions are moderately regressive; and

5. That there is a group of programs that are either moderately progressive â&#x20AC;&#x201C; secondary school and preschool- or highly in favor of the population in poverty

conditions

â&#x20AC;&#x201C;primary

school,

SSA

health

services-,

while

Oportunidades shows a very progressive focalization.

Chart 16 2006 social expenditure concentration coefficients

Note: Green bars refer to targeted programs; blue bars refer to non targeted programs. Source: Scott, John. “Public Expenditure and Human Development” (Gasto Público y Desarrollo Humano) in 2008-2009 Human Development in Mexico Report (Informe sobre Desarrollo Humano México 2008-2009). First work seminar, June 26 2008, based on the following databases: ENIGH 2006; 2004 ENIGH “Social Program Module” (SEDESOL); ASERCA management bases (SAGARPA); SEP registration bases; 2006 Federal Public Account; Health National and State Accounts (Ministry of Health). All targeted programs except Oportunidades data was obtained from the 2004 ENIGH “Social Program Module”. The concentration coefficients were calculated based on the distribution of benefits received by households sorted by total current income per capita, except in the case of agricultural subsidies, which were obtained based on the distribution of benefits received by the producers sorted by the extension of land registered in the ASERCA bases.

Regarding education, the analysis points out that the marginal incidence of expenditure in preschool, primary and secondary school was strongly in favor of the population in poverty conditions –the expansion of secondary school for those who live in extreme poverty was particularly notable-, while expenditure in middlehigher education was moderately regressive, and in higher education had a strong focalization towards the population with high income. However, if actions such as the Oportunidades program improve access by the low income population to services such as public higher education, it should be expected for the impact of expenditure in this last item to be growingly progressive.

In the health component, this report finds that the marginal incidence of services by the SSA has strongly focused on the poor population during the 1996-2002 period, while IMSS services have been slightly regressive. The marginal incidence of public expenditure on pensions has been strongly regressive.

Finally, regarding expenditure on productive functions, agricultural programs generally have a bias towards large agricultural producers. On the other hand, Velázquez39 analyzes the distribution of education and health funds of Branch 33 among states and finds that the transferences do not seem to follow redistributive criteria nor costs issues, except for the case of the FAIS. Most of the Funds resources are distributed based on what was received in past years, when the resources exercised in each state depended on political negotiations and not on an analysis of their needs. With the above, it would seem there is no efficiency or equity criterion and that it is assumed that the federal states’ conditions and needs don’t change as time elapses. _____ 39

Velázquez. Fiscal Federalism and Decentralization (Federalismo Fiscal y Descentralización). Economy Department. Universidad Iberoamericana. 2006

2.2.4 Coordination of social security policy, of labor policy and of the collection of social programs

Social development policy is commonly seen as the set of social programs offered to the population that doesn’t count with access to formal social services (regarding education, health, daycare, credit, food aid, etcetera). However, this view of social development usually puts aside two paramount elements that incur both in the wellbeing of families, and in fulfillment of social rights: formal social security and employment.

Social development began with the practice of formal social security and free public education early the 20th Century, when the Ministry of Public Education (Secretaría de Educación Pública, SEP) was strengthened and with the creation of the IMSS. The idea behind this conception of social policy was founded on the belief that education, social security and a dignified and useful job were fundamental rights established in the 1917 Constitution.

That era’s social and theoretical conception was that society would have full employment and therefore, that practically the entire Mexican working-age population would be working formally. Thus, the totality of the citizenship would have its rights covered: education (free for the worker and his family), work and social security (via the IMSS or ISSSTE).

However, reality has been different, as was pointed out in this Report’s first chapter: up until 2006, almost 67 percent of people with some type of employment were not covered by formal social security; only those with formal jobs have formal social security; given formal social security is funded via the labor market, the creation of dignified jobs is becoming more expensive; and due to income problems or problems of scarce access to services, not all Mexicans can enjoy the right to education or to free healthcare. 83

To help the population which in practice has no access to the goods and services derived from formal employment, and that in poverty and isolation conditions, a countless number of social development programs has been created, such as those described in previous sections: Social Provision Program (Programa de Abasto Social) –for those who cannot have access to buy in private stores-, Popular Insurance (Seguro Popular) –for those who have no IMSS or ISSSTE coverage-, microcredit programs –for those who have no access to formal banking institutions), etcetera. This group of programs has commonly been called social development policy; however, these budgetary programs only represent around a tenth of federal social expenditure.

With these programs, they aim to incur in the reduction of poverty, inequality, the lack of social rights, including work; being that the lack of dignified work, social security, quality education and health services for all, that is, the compliance of rights, is Mexico’s structural problem.

The section above showed that social programs, at least Oportunidades and Popular Insurance as a whole, have managed to cover aid spaces to groups in poverty conditions not covered by formal social security, which undoubtedly contributes to the wellbeing of poor families. However, this progress for social development policy has some substance problems. As was said in the first part of this Report, we count with two different types of social care, with different qualities, which have no connection between them and therefore make it difficult to guarantee the same social rights to all the population.

Work, both employment and real salaries, has also been explicitly absent from social development policy for it has only been thought of as an element of economic policy. As was shown in the first chapter, one of the factors that incurs on the evolution of poverty, measured by income, are salaries and employment. 84

The above due to the fact that almost 65 percent of the monetary income of families comes from the labor market. However, as was shown before, the creation of formal jobs has been very slow and average salaries have had no significant raise in the last 14 years.

Therefore, we have the following factors which in practice incur on social development, but havenâ&#x20AC;&#x2122;t been an explicit part of social development policy: traditional social programs; formal education, health and social security; and the labor market.

Not taking these elements jointly has incurred in the following: a) there isnâ&#x20AC;&#x2122;t an ample vision of social development; b) decisions arenâ&#x20AC;&#x2122;t made causing incentives to be aligned between the elements that contribute to social development; c) expenditure and public policy efforts have been made to reduce poverty in social programs, but not in the labor market on in a broader social security, which causes poverty to diminish slowly; d) opposing and counterproductive policies are generated to improve joint wellbeing and fulfill social rights; e) in the past 20 years, social development policy has focused on focalized social programs, which somehow makes expenditure more efficient, but forgetting universal policies that could improve the quality and coverage of education, health, and social security, which are part of universal social rights.

Social development policy should incur in an orderly and clear manner, social programs, social security and labor policy, in order not to duplicate efforts in the aggregated design of social development policy and to achieve much more effective changes in the fight against poverty and the access to social rights.

2.3 External Evaluations of Federal Social Programs

2.3.1 Institutional Context of the External Evaluation of Federal Social Programs

External evaluation exercises began in Mexico in the nineties. A significant contribution to this regard was the launch of PROGRESA in 1997, program for which its gradual coverage planning strategy was taken advantage of, enabling an experimental-type impact evaluation. It is since 2000 when the practice of external evaluation is institutionalized by establishing it as mandatory to federal programs through the Operation Rules in the Federation Expenditure Budget Decree. From 2000 to 2006, external evaluation exercises took place whose results were presented to Congress in an annual basis. During this period, various rigorous40 evaluations on impact were made enabling to measure the program’s specific effect on the indicators that were part of the very object of the intervention. But in general, the effort of the external evaluation of federal programs resulted in partial progresses, evaluation reports had a limited effect on the improvement of programs and on government action accountability. However, although the set of evaluations undertaken helped in changing culture towards evaluation and accountability, it had some major flaws: there was no element to help evaluate programs homogenously and systematically; there wasn’t good quality control of the set of evaluations, in general, the results of many evaluations were not used to make better decisions. Likewise, evaluations had little diffusion. ________ 40

Besides PROGRESA/OPORTUNIDADES, some other programs whose impact was evaluated were the Milk Social Provision Program (Programa de Abasto Social de Leche, LICONSA), the Food Aid Program (Programa de Apoyo Alimentario, DICONSA), the Compensatory Actions to Fight Against the Educational Gap in Initial and Basic Education (Programa de Acciones Compensatorias para Abatir el Rezago en la Educación Inicial y Básica, CONAFE), the Employment Support Program (Programa de Apoyo al Empleo, STPS), the Health Protection System (Sistema de Protección en Salud, Seguro Popular) and the Hábitat Program (SEDESOL).

2.3.2 Systematization and Analysis of Results

Since early 2007, the CONEVAL began an effort to summarize, systematize and analyze external evaluations performed in 2006 and 2007, in terms with the strengths, challenges and general finds of federal programs. For the 2006 external evaluations, 8541 evaluation reports on an equal number of programs were analyzed and a synthesis per program was elaborated, as well as a general synthesis that pointed out the main finds of external evaluations regarding federal programs. This synthesis was published on CONEVALâ&#x20AC;&#x2122;s website42 late 2007.

The synthesis provided general information on the main findings of external evaluations and general recommendations to programs. The report shows nine recommendations: 1) Elaborate operation rules (or applicable regulations) reflecting more clearly the programâ&#x20AC;&#x2122;s internal objectives and logic and consistency; 2) Clearly define the target population; 3) Ensure the existence of sufficient and qualified personnel for the operation and monitoring of the program; 4) Foster compliance with deadlines; 5) Promote the effective coordination between institutions, the federation and states and between programs to boost the benefits granted; 6) Improve the quality of the goods and services granted by the programs; 7) Increase the diffusion and promotion of programs; 8) Implement effective budgetary control mechanisms; and 9) Generate and use evaluation and monitoring systems with information on useful and reliable results indicators.

_________ 41

In spite of the fact that during 2006, a larger number of evaluations took place, only 85 reports were available by the month of April 2007. 42

www.coneval.gob.mx

2.3.3 Main Findings

For the 2007 external evaluation –delivered on March 2008- we proposed to use a homogenous instrument allowing gathering common information for federal programs, in six subjects: design, strategic planning, coverage and focalization, operation, perception of the target population and results. The evaluation instrument –Consistency and Results Evaluation- consisted of specific questions on the features of the programs in these six subjects, together with their respective justifications, besides proposals and suggestions for improvement by the external evaluators. 80 % of the questions had binary answers in order for the answers and subsequent analysis to be more homogeneous. Based on the reports on 106 programs, the CONEVAL analyzed, revised and systematized the information. Below are some of the most relevant results43. The distribution by coordinating dependency44 of the 106 Consistency and Results Evaluation reports is shown on Chart 17. Over 50 %t of federal programs with external evaluations are concentrated in the SEP, SEDESOL and SHCP zoned bodies.

______ 43

The external evaluations, as well as the Terms of Reference for the Consistency and Results Evaluation can be found at CONEVAL’s website, www.coneval.gob.mx 44

The coordinating dependencies are the institutions that formally coordinate the different social programs of the Federal Public Administration.

Chart 17 Number of Programs with Consistency and Results External Evaluations by Dependency or Coordinating Entity

Note: EIASA, DIF, zoned in the Ministry of Health, has four evaluation reports according to the number of programs that manage this strategy.

In the analysis performed by CONEVAL on the content of program evaluation reports, the proportion of positive answers to binary questions is 51 percent. In general, this shows significant areas for improvement in programs, particularly regarding the subjects of coverage and focalization, strategic planning and results.

Chart 18 2007/2008 Consistency and Results Evaluations Scores 106 Federal Programs

Note: NA refers to Not Applicable; DA, didnâ&#x20AC;&#x2122;t answer and II, there isnâ&#x20AC;&#x2122;t sufficient information to answer the question. Source: CONEVAL elaboration based on the delivered evaluation reports and using a subset of questions from the 2007/2008 consistency and results evaluation.

Besides the information generated from each social program, analyzing the general finds resulting from the set of evaluations is also important. Thus, the breakdown of the general finds into each of the 2007 Consistency and Results Evaluation subjects is shown in the following tables.

Below is a series of tables with the results of the evaluations of 106 programs on the subjects mentioned above. For the subject of design, the aspects analyzed covered the identification of the problem, the population to service, the causal logic and the monitoring instruments. In general, we see that although there is an adequate identification of the problem, the definition of the population programmed to be cared for in a given period of time (target population) and the total population presenting the problem and/or need (potential population), as well as the construction of appropriate indicators is not evaluated as sufficient for a major proportion of programs.

Table 15 General finds for the subject of Design Consistency and Results Evaluation SUBJECT 71%

Identification of the problem

67% 58%

Population to service

47% 76% 44% 66%

Causal logic

50% 41%

Monitoring instruments

35%

FINDS of programs clearly identify the problem they tend to count with objectives that correspond to the solution of the problem they tend to have an adequate design to reach their purpose and tend to the target population of programs have defined the total population presenting the problem of programs are clear about the fact that the achievement of their purpose contributes to the solution of a development problem or the consecution of strategic objectives of the dependencies and entities count with a clear and valid indicator matrix (vertical logic) have a design clearly expressed in the regulations of programs defined necessary and sufficient public goods and services for the achievement of their purpose have clear, relevant, economical, monitorable and adequate indicators of programs can measure the level of achievement of their expected results at each level of their objectives (horizontal logic)

Table 16 shows that in the subject of strategic planning, a large proportion of programs lack adequate planning instruments, particularly in the medium and long terms. Besides, there is a low percentage of programs targeted towards results in the existing planning.

Table 16 General finds for the subject of Strategic Planning Consistency and Results Evaluation SUBJECT 58% 51% Targeted results 49% 21% 25% Planning instruments

23% 27%

FINDS of programs use evaluation results to improve their performance have relevant tests and specific deadlines for their performance indicators have a sufficient number of indicators targeted towards results that reflect their purpose of plans clearly establish the results they aim to reach count with short, medium and long term strategic plans of plans establish indicators, goals, strategies, policies and work schedules of programs have mechanisms to establish and define goals and indicators

One of the main challenges in general federal programs face today, as shown on Table 17, has to do with the definition and quantification of the target population and with the definition of an average coverage strategy.

Table 17 General finds for the subject of Coverage and Focalization Consistency and Results Evaluation SUBJECT Definition of Target Population and Coverage Strategy

24% 25% 23%

FINDS of programs quantify their target and potential population have an adequate progress to comply with their purpose count with a short, medium and long term coverage strategy

21%

of programs are considered to have the adequate coverage strategy

In general, the operation of programs, measured through compliance with regulations, the existence of standardized procedures to process applications and the existence of the needed infrastructure, is evaluated satisfactorily, as is shown in Table 18.

Table 18 General finds for the subject of Operation Consistency and Results Evaluation SUBJECT Compliance with regulations Effectiveness in their operation

84% 89% 76% 72% 80%

Necessary infrastructure

80% 84% 61%

FINDS of programs comply with the regulations established to deliver aid have documentary evidence to prove they comply with the established execution processes have adequate procedures to process applications for aid have standardized and adequate processes to select their projects and beneficiaries count with an organizational structure that allows them to reach their purpose have systematized information that allows providing appropriate follow-up to the execution of works and/or actions of programs have effectiveness indicators for their operation have adequate systematized information in the management and operation of their program 92

For the subject of perception of the target population, we must specify that the 2007 evaluation provides information regarding the existence and features of the means used to measure this perception. In this sense, we see that little over half of the programs count with a measurement, but not all have performed a rigorous measurement.

Table 19 General finds for the subject of Perception of the Target Population Consistency and Results Evaluation

SUBJECT Measurement of perception by beneficiaries

54% 37%

FINDS of programs count with instruments to measure the target populationâ&#x20AC;&#x2122;s degree of satisfaction present objective information

Finally, as can bee seen on Table 20, external evaluation reports point out there is a low proportion of programs gathering information, whether through external evaluations on their impact or through follow-up, about indicators on the accomplishment of the programsâ&#x20AC;&#x2122; general and ample objectives.

A central element that stands out from Consistency and Results Evaluations, is that the programs have a good evaluation on the operative part, but the evaluation of the elements that have to do with results â&#x20AC;&#x201C;measurements of results, strategic planning, determination of the potential and target population, perception of the population serviced- are deficient. An important challenge in social policy is to continue strengthening the operative processes, but focusing on results-based management.

Table 20 General finds for the subject of Results Consistency and Results Evaluation

SUBJECT Information on the progress in accomplishing objectives

2.4

36% 42% 26%

FINDS of programs have proved an adequate progress in reaching their objectives of programs gather true and appropriate information on the indicators that measure their objectives have carried out external evaluations that allow them to measure their impact

In Summary. Challenges of Social Development Policy

Social rights set minimum elements to construct diagnostics regarding existing needs and to guide social policy. However, social rights are not approaches of how to reach what is being valued. Therefore, general strategies are required, usually materialized in specific government plans and programs, which concrete objectives and mobilize instruments and resources.

A possible structuring scheme for social policy is described in the following chart:

Flowchart 1 A structure for the analysis of the design of social development policy

Within this structure, a logical connection is established between the concept of development and the policy objectives, and that from them should derive social rights to guide government plans. Likewise, the objectives of social programs, of the social security system and economic policy, especially labor policy, should be congruent between them and consistent with government plan strategies. On the other hand, program instruments and resources should have adequate resource appropriation (reducing poverty or inequality, fulfilling social rights), with an ongoing improvement in the quality of services. 95

The picture emerging from the evaluation of social policy is different to this scheme. First, there is no institutional conception of what social development means, therefore the general objectives of public policy are constructed ad-hoc, sometimes appealing to a notion of wellbeing associated to having resources, and others thinking this is a subjective perception.

In any case, the absence of this notion translates into the lack of a basis to clearly establish social rights. If we wanted to infer a conception of the objectives of social policy and development based on existing social rights, we wouldnâ&#x20AC;&#x2122;t progress much either, for they are few and are enunciated imprecisely.

With the inexistence of a clear definition of social rights, they are not an explicit basis for government plans. The plans donâ&#x20AC;&#x2122;t translate into a coordinated set of programs and policies and therefore the three main elements for social development: the set of social programs, social security policy and economic policy, especially labor policy, are not coordinated. Finally, when we examine the programs and actions in particular, we find they frequently have regressive impacts. This picture, summarized on Flowchart 2, raises the need to reorganize Mexican social policy from its conceptual foundations.

Flowchart 2 Conclusions: A structure for the analysis of the design of social development policy

The progresses seen in social development in the last 14 years â&#x20AC;&#x201C;important increases in the coverage of social services, progress in the results of some social programs, reduction of poverty- could be boosted if social development policy were improved, emphasizing the challenges presented herein. The concrete result would be a greater wellbeing for the population as a whole and a better fulfillment of social rights in subsequent years.

2.5

Vivir Mejor Strategy

In the past months, the Federal Government elaborated and made public the Living Better Strategy (Vivir Mejor), as a tool to incur in the population’s wellbeing. It is still quite premature to count with an evaluation of this Strategy, for it is in its implementation phase and, thus, this report does not intend to perform this task. But it is an objective of this section to pinpoint, from CONEVAL’s point of view, the Strategy’s potential correct actions and challenges, analyzing the document presented a few months ago, in order to incur in the Strategy’s gradual improvement and implementation.

We have pointed out there seems not to be any clarity and coordination in the actions included in social development policy. Besides the existence of several federal government institutions that carry out programs and actions for social development, there is a lack of coordination between the set of social development programs, social security institutions (which are also part of social development) and policies and actions in economic matters, especially labor policy.

Therefore, having a scheme that can organize and guide social development efforts, in many cases disperse, is always welcome. According to the disclosed document, the Vivir Mejor Strategy precisely has as an initial objective to make public policy efforts converge to accelerate the progress of social development.

Strengths − Acknowledge that, to improve the situation of the general population, and especially that of poor and vulnerable families, synergy and coordination between social policy, social protection and economic policy is needed. − Acknowledge the importance of employment, salaries and productivity to overcome poverty and improve social development. 98

− Continue strengthening the basic capacities of the population in poverty conditions. − Examine that in terms of wellbeing, it is important to have a solid universal social protection network. − Aim to make access to health services universal. − Aim to improve the quality of public services. − Combine in an orderly manner, focalized actions and programs with universal strategies. − Have coordination between social development and economic actions carried out by the different institutions and dependencies of the Federal Government, in order for them to converge and create synergies with the Strategy’s objectives. − The Strategy implicitly raises that the Ministry of Social Development should coordinate these efforts, with the Social Cabinet, presided by the President of the Republic, supporting this coordination at Federal level. − The Strategy aims to improve social cohesion and inequality in Mexico.

Challenges − How programs, actions and strategies will be coordinated within the Federal Government hasn’t been established clearly. In the past, this coordination has been sought but hasn’t been achieved. Therefore, it is important to strengthen the coordination system to prevent de dispersion of efforts. − How the sector programs will be compatible with the Strategy –in matters of objectives, indicators and goals- is not determined. − To overcome the gap in matters of social security, economic growth and productivity, besides strengthening the budgetary programs and specific actions, the Strategy must aim for integral policies in order to achieve synergy and coordination between the set of social programs, social security and the performance of economy as a whole. 99

â&#x2C6;&#x2019; Although the Strategy aims to improve wellbeing in different areas and proposes universal actions and strategies, compliance with the social rights set forth in the Constitution or in the General Law of Social Development is not explicit. â&#x2C6;&#x2019; It is important to include indicators and goals in the Strategy. â&#x2C6;&#x2019; Greater coordination is needed with states and municipalities in the operation and follow-up of the programs included in the Strategy.

100

CONCLUSIONS AND RECOMMENDATIONS

2.5 Conclusions Social development has had major progress in Mexico as of the early nineties: -

There has been an increase in the coverage of basic services, particularly for the population with lower income.

Life expectancy at birth has increased.

Poverty has dropped significantly since 1996.

But there are also major challenges: -

44.7 million Mexicans were poor in 200645.

The reduction of poverty between 1992 and 2006 has been relatively slow.

The population in poverty in urban areas is numerous.

The recent increase in food prices affects the population’s welfare and there’s a risk of an increase in poverty in Mexico.

Obesity has increased and has become a grave public health problem.

Mexico’s economic growth per capita has been very low.

Formal employment has not grown enough, but informal employment has grown significantly.

Average actual salaries practically haven’t changed in 14 years.

A significant number of Mexicans doesn’t count with access to social security.

Progress in the reduction of infant mortality and, especially of mother mortality, has been very slow; the problem worsens in areas of high marginalization and poverty.

There is inequality of income and of access to opportunities; these problems persist after many years.

There is great regional inequality in terms of social development.

A high degree of discrimination and gender inequality is reported.

______ 45

The 2008 poverty estimation will be published in 2009.

101

These challenges could be overcome in the future, if social development policy is improved. Social development policy has had the following accomplishments:

Social expenditure has increased systematically since 1996.

The focalization of some social programs has made social expenditure more efficient and progressive.

There has been progress in the decentralization of federal resources.

Social development policy has fostered the broadening of basic capabilities of the poorest families.

Social development policy has now greater institutionalization, thanks to the LGDS and to more systematic evaluation.

A number of programs have achieved the populationâ&#x20AC;&#x2122;s co-responsibility, have been able to adequate their schemes to the reality of localities and have developed specific operation manuals.

The set of Oportunidades and Popular Insurance (Seguro Popular) programs has had good focalization and contributed to help families with no access to formal social security systems.

Oportunidades government transferences have contributed to increase the total net income per capita of families in food poverty in rural areas by almost 58 percent between 1992 and 2006.

There has been major progress in making health services universal.

The Living Better (Vivir Mejor) strategy is an instrument that aims to arrange government action; coordinate the different institutions to reduce dispersion and create synergies in social development, as well as being a link between social and economic policy.

102

However, social development policy faces major challenges:

The increase in social expenditure is associated to increases in current expenditure, financed in good measure with oil resources.

There is an important gap in road and communications infrastructure in the poorest and most marginalized areas.

The objective of social policy is fragmented and disperse.

It is necessary to strengthen Mexico’s evaluation systems, particularly in states and municipalities.

Given external evaluations have not crystallized in states and municipalities, it is impossible to count with sufficient information on the results of social development programs and actions in states and municipalities.

Social rights aren’t explicitly mentioned in the plans and programs.

Social rights do not guide social development policy.

There is a great number and dispersion of social programs.

Insufficient coordination within and between institutions which have under their charge social development programs and policy.

Insufficient

coordination

between

the

federation,

the

states

and

municipalities in matters of social development. -

The quality of some public services is deficient, particularly in the case of education and health.

The above is more evident when comparing the quantity and quality of services earmarked to indigenous populations.

A great number of social actions and programs aren’t progressive.

There isn’t enough coordination between the set of social programs, formal social security and labor policy, which attempts against universal social rights, and generates few formal jobs and low salaries.

103

Various social programs face the following challenges: •

Inadequate design.

•

Unclear Operation Rules.

•

Strategic planning problems.

•

Difficulties to quantify the potential and target population.

•

Lack of medium and long term coverage strategy.

•

Absence of a definition of the target population.

•

Various operation deadlines are not met.

•

Lack of coordination between institutions.

•

Deficient quality in different goods and services provided.

•

Lack of information and accessibility to programs.

•

Deficient internal monitoring schemes of the programs.

•

The management of the programs privileges the operation and compliance of standards, over Results.

•

The degree of satisfaction of the serviced population is measured neither adequately nor systematically.

The Living Better Strategy has areas of opportunity in aspects such as: dispersion

programs

and

actions;

institutional

coordination;

instrumentation of effective policies that produce synergies between social and economic policy and, counting with goals and indicators that measure its effectiveness.

104

3.2 Recommendations

Based on the results exposed in this report, the CONEVAL issues a set of recommendations targeted to improve Mexicoâ&#x20AC;&#x2122;s social development policy; to the attention of the Federal Executive Power, the H. Union Congress, Federal States and Municipalities, the Federal Public Administrationâ&#x20AC;&#x2122;s dependencies and entities and the following Public Federal instances that comprise the National Social Development System: the Inter-Ministry Social Development Commission and the National Social Development Commission:

General Recommendations

Special attention by the Federal Executive Power, States and Municipalities:

1. Improve the quality of the public goods and services offered to the population, particularly the services provided to the population in poverty. 2. Improve the coverage of the group of social policy actions to approach compliance with the populationâ&#x20AC;&#x2122;s social rights. 3. Put into practice a global strategy which measures the progress in matters of quality of the goods and services and coverage. Among other actions, this strategy should include: a. Measure with adequate instruments the degree of satisfaction of the population being serviced by the programs and actions. b. Build an integral universal register which includes information about the population being serviced by all social development programs and actions46. _____ 46

This register should be permanently updated. We recommend assigning a population number which allows

identifying each of the individuals, to be used in conjunction with the register to measure the coverage of social policy actions.

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c. Advance towards a common mechanism which allows identifying those who should be incorporated to the different social development programs, whenever they are not of a universal nature. 4. Promote better strategic planning for social development policy allowing the accomplishment of the objectives and improving coordination between sectors and programs. 5. Measure Final Results. a. Systematically present indicators that show social development policy and programs are solving the problem they were designed to solve. 6. Continue and strengthen policies for equal opportunity among genders and vulnerable groups. 7. Channel more resources towards communications, transportation and other service infrastructure in order to facilitate social inclusion of geographically marginalized social sectors. 8. Have a clear policy for the reduction of urban poverty.

Special attention by the Federal Executive Power and the H. Union Congress:

9. Promote an integral progress in complying with social rights: a. Seek social security institutional and financing changes in order for it to provide coverage to all Mexicans, regardless of their employment situation. b. Continue with strategies to achieve health service universality, integrating formal and informal services or making them compatible. c. Gradually reduce the social security fee costs for formal employment to promote the creation of jobs. Having a decent job which is useful to society is a social right and a fundamental element to systematically reduce poverty. 106

Special attention by the Inter-Ministry Social Development Commission:

10. Improve the design of social programs: a. Before their creation, programs should have a clear diagnosis of the problem they wish to solve and seek public policy actions of proved effectiveness to design the program, as is set forth by the General Guidelines for the Evaluation of Federal Programs of the Federal Public Administration, issued in March 2007. b. Find synergies and prevent duplicities with other federal and local programs.

11. Have an effective coordination between institutions and programs to enhance the benefits that are provided: a. Reassign programs among ministries and dependencies to make the financial and human resource more efficient and effective. b. Establish mechanisms that facilitate coordination between institutions and programs.

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Special attention by the National Social Development Commission, States and Municipalities:

12. Have better coordination schemes between the federation, the states and municipalities for social development: a. Share registers. b. Count with information and systematic evaluations regarding Branch 33 funds. c. Build and publish a National Social Development Program Catalogue at Federal, State and Municipal levels. 13. Count with rigorous and systematic external evaluations for state and municipalities social development policies and programs: a. Modify local legislations in order to institutionalize external evaluation throughout the States.

In the area of Education:

14. Improve the quality of the educational services offered strengthening programs targeted to the indigenous population and to the population in poverty. 15. Improve the coverage of middle and higher education. 16. Improve and broaden technical education.

In the area of Health:

17. Develop monitoring strategies for the quality of services in Mexico. 18. Guarantee universal healthcare for pregnant women during childbirth and puerpery and for children under one year of age to reduce mother and infant mortality, particularly in entities with higher mortality rates. 108

19. Focalize in areas of high malnutrition, particularly indigenous, effective medium and long term strategies to improve the state of malnutrition and strengthen the availability of high quality food given the increase of food prices. 20. Develop an effective policy to contain, reduce and prevent obesity throughout Mexico, with special attention to infancy.

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Recommendations to Social Programs

Special attention by Federal Public Administration dependencies and entities, which includes the Ministry of Treasure (SHCP):

1. Substantially improve strategic planning of programs and institutions: a. Although the regulations do not establish it, it is important for programs to have medium and long term strategic plans that include: their medium and long term objectives, appropriate indicators, adequate goals and coverage strategy. 2. Estimate the potential and objective population and have a coverage strategy: a. To clearly know the program aims to improve a public policy problem it is important to know how generalized the program is and therefore estimating the potential population is convenient. b. Within its strategic planning, the program should have a medium and long term coverage strategy. 3. Strengthen the Operation: a. Count with systematized information for the programâ&#x20AC;&#x2122;s operation. b. Elaborate Operation Rules that more clearly reflect the programâ&#x20AC;&#x2122;s objectives and guarantee consistency between its objectives, goals and processes. c. In

the

case

programs

with

participation

states

and

municipalities, have a greater coordination, measurement and followup of works, goods and services. 4. Improve compliance with deadlines: a. Overcome the recurring breach of deadlines foreseen for the delivery or execution of the resources or effective dates for the operation of the programs. 110

b. Regulation is excessive and it will be necessary to speed it up. 5. Improve the information and accessibility of social programs. 6. Programs, dependencies and entities should follow-up the aspects susceptible to improvement, derived from external evaluations, according to the mechanism issued for said purpose by the CONEVAL, the Ministry of Treasure (SHCP) and the Ministry of Public Function during 2008. Through this mechanism, the use of the information derived from external evaluations will be systematized in order to improve the performance of social development programs and policy.

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pobres. Evaluación de Resultados del Programa de Educación, Salud y Alimentación.) Washington, D.C., International Food Policy Institute (IFRPI), 2000. – Grupo de Economistas y Asociados. External Evaluation of the Rural Provision Program, DICONSA S.A. de C.V. (Evaluación Externa del Programa de Abasto Rural, DICONSA S.A. de C.V.) Fiscal Year 2002. Mexico, D.F. 2003. – Nacional Public Health Institute (Instituto Nacional de Salud Pública). First evaluation of the impact of LICONSA fortified milk on the state of nutrition of children who benefit from the Social Provision Program (Primera Evaluación de Impacto de la leche fortificada LICONSA en el estado de nutrición de los niños beneficiarios del Programa de Abasto Social). Cuernavaca, Mor., INSP, 2004. – Levy Santiago. Good Intentions, Bad Outcomes: Social Policy, Informality and Economic Growth in Mexico. Brookings Institution Press, 2008. – Mexico, Ministry of Health, Health: Mexico 2006 Information for Accountability (México, Secretaría de Salud, Salud: México 2006 Información para la Rendición de Cuentas). México, SSA, 2007,278 p. – Mora, J. “Results Evaluation Section”, in 2007 Consistency and Results Evaluation of the Oportunidades Human Development Program (“Apartado de Evaluación de Resultados”, en Evaluación de Consistencia y Resultados 2007 del Programa de Desarrollo Humano Oportunidades), Instituto Tecnológico y de Estudios Superiores de Monterrey, Mexico City Campus (ITESM-CCM), 2008. – Oehmichen Bazán, Cristina. State Reform (Reforma del Estado). Social policy and indigenism in Mexico, 1988-1996 (Política social e indigenismo en México, 1988-1996).

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– United Nations Development Programme. Report on Human Development: Mexico 2002, UNDP, Mexico, 2003, 146 pp. – Rivera Dommarco Juan A. and Jaime Sepúlveda Amor. “1999 Nutrition Survey Conclusions: translating results into public policies on nutrition” (“Conclusiones sobre la Encuesta Nacional de Nutrición 1999: traduciendo resultados en políticas públicas sobre nutrición”). Mexico Public Health (Salud Pública México) 2003;45 supl 4:S565-S575 – Rivera J A, Sotrés-Alvarez D, Habicht JP, Shamah T, Villalpando S. Impact of the Mexican Program for Education, Health and Nutrition (Progresa) on rates of growth and anemia in infants and young children. A randomized effectiveness study. JAMA 2004;291:2563-2570 pp. – Scott, John. “Public Expenditure and Human Development” in 2008-2009 Report on Human Development in Mexico (“Gasto Público y Desarrollo Humano” en Informe sobre Desarrollo Humano México 2008-2009). First work seminar, June 26, 2008 – Székely Pardo Miguel and López Calva Luis Felipe et. al. Carried out the first poverty map exercise with 2000 information. “Putting income poverty and inequality on the Mexico Map” in Mexican Economy (“Poniendo a la pobreza de ingresos y la desigualdad en el mapa de México” en Economía Mexicana), Nueva Época, CIDE, vol. XVI, no, 2, second semester, Mexico, 2007, 239-303 pp. – Scott John. Redistributive efficiency of programs against poverty in Mexico. (Eficiencia redistributiva de los programas contra la pobreza en México). Work Document No.307. Mexico, D.F. Economy Division, Center for Economic Research and Education (Centro de Investigación y Docencia Económica, CIDE), 2004. – Schultz, P. “The impact of Progresa on school enrollment” in More Opportunities for poor families. Results Evaluation of the Education, Health and Food Program. (“El impacto del Progresa sobre la inscripción escolar”, en Más Oportunidades para las familias pobres. Evaluación de Resultados del Programa de Educación, Salud y Alimentación.) Washington, D.C., International Food Policy Institute (IFRPI), 2000. 116

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Appendixes Table A1 Percentage of people in poverty conditions and statistical significance of changes, 1992 - 2006

1 Food poverty: refers to people whose income is below the required to cover the food needs corresponding to the requirements established by the INEGI â&#x20AC;&#x201C; CEPAL food basket. 2 Capabilities poverty: refers to people whose income is below the required to cover the basic consumption pattern in food, health and education. 3 Patrimony poverty: refers to people whose income is below the required to cover the basic consumption pattern in food, clothing and footwear, housing, health, public transportation and education. 4 Hypothesis testing is two-tailed and with a 0.05 significance level. Source: CONEVAL estimations based on the 1992, 2000, 2004 and 2006 ENIGHs

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Table A 2 1992 â&#x20AC;&#x201C; 2006 evolution of poverty with standard errors * Households

* The figures correspond to the new databases that incorporate modifications made after the demographic conciliation performed by the INEGI and the CONAPO. 1 Food poverty: refers to households whose income per capita is below the required to cover the food needs corresponding to the requirements established by the INEGI â&#x20AC;&#x201C; CEPAL food basket. 2 Capabilities poverty: refers to households whose income per capita is below the required to cover the basic consumption pattern in food, health and education. 3 Patrimony poverty: refers to households whose income per capita is below the required to cover the basic consumption pattern in food, clothing and footwear, housing, health, public transportation and education. 4 Standard errors are reported in percentages Source: CONEVAL estimations based on the 1992 to 2006 ENIGHs

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Table A 3 1992 â&#x20AC;&#x201C; 2006 poverty lines

1 Monthly net income per capita in pesos in august of each year. 2 Food poverty line: Minimum amount of monthly total net income a person should have to cover their basic food needs. 3 Capabilities poverty line: Minimum amount of monthly total net income a person should have to cover their basic food, health and education needs. 4 Patrimony poverty line: Minimum amount of monthly total net income a person should have to cover their basic food, health, education, clothing and footwear, public transportation and housing needs. 5 For years prior to 1993, the adjustment was made given the change to new pesos (nuevos pesos). 6 Engel coefficients of the year 2000 are used in order to make the estimations comparable. SOURCE: CONEVAL estimations based on information by Banco de MĂŠxico http://www.banxico.org.mx

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Table A 4 Distribution in percentages at state level of people in poverty conditions and absolute figures, using the imputation methodology, 2005

Source: CONEVAL estimations based on the 2005 2 Population and Housing Count and the 2005 ENIGH.

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Table A 5 Total population, social gap indicators, index and degree, marginalization index and level, by federal state, 2005

1 For the construction of the social gap index, the average occupants per room natural logarithm was used. Source: the social gap indicators, index and degree are CONEVAL estimations based on the 2005 2nd Population and Housing Count The marginalization index and level of marginalization are estimations by the CONAPO based on the 2005 2nd Population and Housing Count 1 For the construction of the social gap index, the average occupants per room natural logarithm was used. Source: the social gap indicators, index and degree are CONEVAL estimations based on the 2005 2nd Population and Housing Count The marginalization index and level of marginalization are estimations by the CONAPO based on the 2005 2nd Population and Housing Count