A Review of the Vulnerable Group Development (VGD) Program for Protection and Promotion of Poor Households in Bangladesh

Abstract

Social Safety Nets (SSN) is a policy instrument that is largely used for household welfare improvement and poverty reduction. Bangladesh has implemented a number of SSN program for this purpose. The Vulnerable Group Development (VGD) program is one of the current and largest SSN two-year programs that provide in-kind transfer with development programs for selected women-headed poor family. This study is an attempt to provide evidence from a micro level household survey data on whether the VGD program can provide protection and promotion effect for the beneficiary households at the end of the benefit cycle. Based on pre-intervention criterion, similar non-beneficiary households were selected as a control group. Consumption expenditure is used as a protection, while savings, productive asset and investment behaviour, child schooling are treated as promotion indicators. The Cost of Basic Needs (CBN) method is used for poverty measurement for beneficiary households. Finally, the PSM method is employed to examine the program impact on the targeted variables. The study findings provide evidence that the VGD with integrated development program have protection and promotion roles on the beneficiary household well-beings and decrease the probability being poor for the beneficiary households compared to non-beneficiary households. Extending the number of program beneficiaries and duration of benefit cycle can help reduce the poverty rate significantly.