• The Use of Social Investment Funds as an Instrument for Combating Poverty
• Economic Shocks, Inequality and Poverty: The Need for Safety Nets
• Helping the Poor Managing Risks Better: the Role of Social Funds

The emergence of Social Investment Funds during the past ten years in most Latin American countries constitutes an important development in the field of social policy that has proven to be effective in rapidly channeling external funding to small projects in poverty-stricken areas. The funds represent a significant institutional and operational improvement over the traditional government programs. They have improved systems of targeting so that their projects are better able to reach the poor than those of the traditional line ministries. Since the choice of fund projects is demand-driven, they have a tendency to reflect the priorities of poor recipients.

At present, all of the countries in Latin America and several in the Caribbean have Social Investment Funds. Over time the original "emergency" rationale for the funds has been replaced by longer-term objectives and the funds have become the primary means by which many governments in Latin America and the Caribbean undertake actions in poor communities.

The Inter-American Development Bank has been the principal external supporter of the funds in the region. Its contributions represent about half of all the external financing that the Social Investment Funds have received. The IDB has financed funds in 16 countries, largely through concessional loans, for a total of $1.3 billion. The IDB was a major force in the building of these institutions, providing technical assistance and expertise to assist in the creation of many of the funds that received financing in the 1990's.