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 Analysis For Applicable Knowledge Október 6. utca 19., H-1051 Budapest

4th Evaluation Conference HETFA 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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 Poverty Rate around 2010 – EU and Hungary Between , 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 26 September – 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 instruments 3.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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 26 September 2013 Instruments Field of InterventionInstruments Used Employment Social economy Targeted employment subsidies – reducing taxes of empolyers Employability Trainings Personalized consultancy Poverty of children, education Infrastructure development (schools, kindergardens) Integration programs in education Trainings for teachers Free public meals Pilot 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 regions Campaigns 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 26 September 2013 Territorial Targeting Worked on Micro-region Level Funds 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 26 September 2013 LDMs: Developments Financed by EU 9 Source: Hajnalka Lőcsei – Evaluation of LDM Program 33 LDMs’ average

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 26 September 2013 The Developed Services Have Improved 12 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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 Hungarians living in poverty SROP Priority 5 beneficiaries

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 26 September 2013 Involvement of EARFD Poverty is partly concentrated in agricultural regions : 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

4th Evaluation Conference HETFA Research Institute and Center for Social and Economic Analysis 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 Teller HÉTFA Research Institute – Metropolitan Research Institute 1051 Budapest Október 6. u