On the EU Funds Dedicated to Reduce Poverty and Inequality in Hungary András Csite, Nóra Teller September 26, 2013 HÉTFA Research Institute and Center

On the EU Funds Dedicated to Reduce Poverty and Inequality

in Hungary

András Csite, Nóra Teller

September 26, 2013

HÉTFA Research Institute and Center for Social and Economic AnalysisFor Applicable Knowledge

Október 6. utca 19., H-1051 Budapest www.hetfa.hu

4th Evaluation ConferenceHETFA Research Institute and Center for Social and Economic Analysis

26 September 2013

Main Statements• Instruments of development policy in reducing

poverty are rather limited• There were unreasonably high expectations

about development policy in 2007 – social inclusion was no exception

• External factors (economic crisis, austerity in public finance, strengthened negative incentives) affected the results unfavorably

• There are results, but there are even more lessons for 2014-2020

2


26 September 2013

Structure of Presentation

• The scale of the problem: social-economic and policy environment

• Inputs and targeting• Results• Lessons

3

Situation of the elite grups of lagging regions have been stabilized (with the help of EAFRD projects as well): they now have perspective

for growth at home – meanwhile, these elite groups (mayor, entrepreneurs, managers of public institutions, teachers, etc.) have

hardly become more suited for being actors of social integration


26 September 2013

The Number of People Living in Poverty is Increasing 4

Forrás: Tárki, Intequality and Polarization in the Hungarian Society. Tárki Monitor Report 2012.

Poverty Rate around 2010 – EU and Hungary

1987

1992

1996

2000

2003

2005

2007

2009

2012

410

643

1197

930

1105

969

983

1208

1233

Number of People Living in Poverty in HU (1987-2012),

thousand ppl.

Between 2003-2008, decrease due to social transfers, after 2008, as a consequence of the economic crisis, the austerity in public finances and the

encumberment of accessiblity to social transfers: significant increase


26 September 2013

Rise from Poverty Gets More Difficult 5

Increase in risk of poverty: children and young people, unemployed/inactive, people with low level of education,

Roma households

Rise from poverty is almost impossible + poverty is inherited to next generation


26 September 2013

2007-2013 – New Era in Social Inclusion Policy 6

Underlying idea in the 2007 planning process: previous social inclusion policy proved ineffective, a restart is needed:

1. Ever more funds for development (no funds for operation)2. Innovative, new instruments3. Robust territorial targeting – Least Developed Micro-

Regions (LDM)4. Development policy aims for results in all aspects of poverty

and social exlcusion 5. Development policy operates (partly) independently from

the goals and instruments of traditional social inclusion policy institutions


26 September 2013

InstrumentsField of Intervention Instruments Used

Employment Social economyTargeted employment subsidies – reducing taxes of empolyers

Employability TrainingsPersonalized consultancy

Poverty of children, education

Infrastructure development (schools, kindergardens)Integration programs in educationTrainings for teachersFree public mealsPilot programs: special educational institutions, community development

Housing Special programs on segregated localities, urban rehabilitation programs focusing on social problems

Healthcare Development of basic and specialized healthcare services in lagging regionsCampaigns on healthy lifestlyle and other public health problems

7

Critique: project-centered developments, high administrative costs

Negative incentives from 2008 public employment,

unempl. benefits, schooling

No access to basic level care in 20 min

Access to basic level care in 20 min

Place of development (no access to basic level care in 20 min)

Place of development (access to basic level care in 20 min)

Development created access to basic level care in 20 min

Basic level access obtained by other reason


26 September 2013

Territorial Targeting Worked on Micro-region LevelFunds were allocated to the micro-regions where it

was needed the most

8

Change in the accessiblity of basic healthcare services

Source: Budapest Institute –Evaluation of Healthcare Programs


26 September 2013

LDMs: Developments Financed by EU 9

Source: Hajnalka Lőcsei – Evaluation of LDM Program

Országos átlag 33 LHH átlaga0

50

100

150

200

250

Development funds per capita (2007-2011) – thousand HUF

Állami beruházási támogatásEU forrásokPiaci beruházások

National average

Public - national

Public – EU funds

Private

33 LDMs’ average


26 September 2013

Results of Developments in Public Education

• Less unjustified absences in the schools involved in the development

• Educational developments of cultural institutions reach disatvantaged students

• Sustainability of results is problematic: once development funds run out, free services are no longer availalable

10


26 September 2013

Role of Nonprofit Organizations• Development policy

strengthens nonprofit organizations in the field of social inclusion – 40 % of beneficaries are

founded after 2006– Professionalization,

national network– Local cooperations – local

labor office, local government

11

Actions and funds rarely reach micro-regional

periferies – skimming within target group and

target territory


26 September 2013

The Developed Services Have Improved 12

Passzív

Javuló munkakeresési szokások és készségek

A munkakeresés során szélesebb körben tájékozódik

Munkakersés során képes "feketén" dolgozva és segélyből fenntartani magát

Munkanélküliség után állást talált

0 2 4 6 8 10 12 14

Empl. in public work prog.

EQUAL/HRDOP beneficiary

Improved job-seeking practices and skills

Passive – does not seek for a job

What happened to people in

socal inclusion programs?

Experiences of life story interviews

After unemployment found a job

While seeking for a job, is able to work illegally and maintain her/himself

Uses more information in job-seeking than before


26 September 2013

It Won’t Work Only from EU Funds...EU development funds are not sufficient in

themselves to make a real difference

13

0

200

400

600

800

1000

1200

1400 1.233

125

Thou

sand

peo

ple

Hungarians living in poverty

SROP Priority 5 beneficiaries


26 September 2013

Involvement of EARFD

• Poverty is partly concentrated in agricultural regions

• 2007-2013: no meaningful coordination between ERDF/ESF and EAFRD developments

• Weak involvement of EAFRD projects in tackling poverty

• Automatization and development of large scale monocultures decreased demand for labor

14


26 September 2013

New Institutional Setting from 2014• Integration of MAs into organizational structure

of ministries– Pro: development interventions are better integrated

with other policy instruments– Con: less opportunity for experimentation for

development policy• The real issues to be addressed:

– Better, goal-oriented incentives for people in public-nonprofit systems of anti-poverty and social inclusion policy (local government leaders, health visitors, social workers, teachers, etc)

– Strengthening vocation, easing on the domination of project structure, decentralization of implementation

15

Thank you!

András Csite – Nóra TellerHÉTFA Research Institute – Metropolitan Research Institute

1051 Budapest Október 6. u. 19.www.hetfa.hu

Documents

On the EU Funds Dedicated to Reduce Poverty and Inequality in Hungary András Csite, Nóra Teller September 26, 2013 HÉTFA Research Institute and Center