Five cash transfer programs in five countries:
What can we say about the potential for SCT programs
to deliver economic ga...
Impact evaluations across SSA countries
•  Malawi SCT
–  Mchinji pilot, 2008-2009
–  Expansion, 2013-2014
•  Kenya
–  CT O...
What we hypothesized
Primary targets: income safety net + investment in health &
education of children.
But reasons to bel...
Analytical framework
Pre-program level program execution Post program level
Comparison group
Program group
ΔP
ΔC
Impact
ΔP...
What we find: productive activities
Zambia Malawi Kenya Lesotho Ghana
Agricultural	
  inputs	
   +++	
   -­‐	
  -­‐	
  -­‐...
What we find: labor allocation
adults Zambia Kenya Malawi Lesotho Ghana
Agricultural/casual	
  wage	
  
labor	
  
-­‐	
  -...
What we find: social networks and risk coping
strategies
Zambia Kenya Malawi Ghana Lesotho
Nega4ve	
  risk	
  coping	
  	
...
What we find: food security
Zambia Kenya Malawi Ghana Lesotho
Inadequate	
  for	
  @	
  least	
  1	
  month	
   NS	
  
Mon...
What	
  we	
  find:	
  nutri/on	
  
Zambia Kenya (1) Malawi Ghana Lesotho
Meat	
   +++	
   +++	
   +++	
   -­‐	
  -­‐	
  -­...
What explains difference in impact?
Crop	
  	
   Livestock	
   NFE	
   Produc/ve	
  
labor	
  
Social	
  
Network	
  
Food...
Targeting important
è Transfers impact productive outcomes more if targeted to less
labor constrained hhlds
Under 5
5 to ...
Predictability of payment important
è  Reliable source of income enables appropriate planning, which
leads to consumption...
Value of transfer important
0
5
10
15
20
25
30
35
40
Ghana
LEAP
(old)
Kenya
CT-OVC
(big)
Burkina Kenya
CT-OVC
RSA CSG Leso...
…and account for inflation
è  None indexed with inflation, though value of transfer adjusted in some
countries.
0
1,000
2...
…evidence cash transfers need not be
conditional
Zambia	
   Kenya	
  (1)	
   Malawi	
   Ghana	
   Lesotho	
  
Total	
   ++...
For each Cedi
transferred local
income increases by
2.5 Cedi
(90% CI: 2.38-2.65)
Nearly all the spillover
goes to non-
ben...
Production constraints can limit supply response, which
may lead to higher prices and a lower multiplier
If supply respons...
Size of income multiplier varies by context
Differences across countries:
Openness of local economies
Where money is spent...
►  Demographic profile of beneficiary households
•  Available labor: OVC? Households with young children?
►  Relevance of ...
Making cash transfers more productive:
operational and policy
1.  Ensure transfers meet threshold & sustain them over
time...
Cash transfers needs to be part of a
rural development strategy
► Potential conflicts with social objectives but on other ...
Our websites
From Protection to Production Project
http://www.fao.org/economic/PtoP/en/
The Transfer Project
http://www.cp...
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Five cash transfer programs in five countries: What can we say about the potential for social cash transfer programs to deliver economic gains to the rural poor?

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http://www.fao.org/economic/PtoP/en/

Presentation given by FAO economists Solomon Asfaw and Joshua Dewbre on results of a cross country analysis on the impacts of social cash transfer programmes on a set of economic outcomes of the rural poor in Malawi, Kenya, Ghana, Zambia, and Lesotho.

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Five cash transfer programs in five countries: What can we say about the potential for social cash transfer programs to deliver economic gains to the rural poor?

  1. 1. Five cash transfer programs in five countries: What can we say about the potential for SCT programs to deliver economic gains to the rural poor? Solomon Asfaw and Joshua Dewbre ESA Seminar Thursday, April 17, 2014 Rome, Italy
  2. 2. Impact evaluations across SSA countries •  Malawi SCT –  Mchinji pilot, 2008-2009 –  Expansion, 2013-2014 •  Kenya –  CT OVC, Pilot 2007-2011 –  CT OVC, Expansion, 2012-2014 –  HSNP, Pilot 2010-2012 •  Mozambique PSA –  Expansion, 2008-2009 •  Zambia –  Monze pilot, 2007-2010 –  Child Grant, 2010-2013 •  South Africa CSG –  Retrospective, 2010 •  Burkina Faso –  Experiment, 2008-2010 •  Ethiopia –  PNSP, 2006-2010 –  Tigray SPP, 2012-2014 •  Ghana LEAP –  Pilot, 2010-2012 •  Lesotho, CGP –  Pilot, 2011-2013 •  Uganda, SAGE –  Pilot, 2012-2014 •  Zimbabwe, SCT –  Pilot, 2013-2015 •  Tanzania, TASAF –  Pilot, 2009-2012 –  Expansion, 2012-2014
  3. 3. What we hypothesized Primary targets: income safety net + investment in health & education of children. But reasons to believe the transfer might enable: ► increased investment in productive activity: on & off-farm ► investment in crop inputs and farm implements ► purchases of livestock ► increase in labor devoted to more productive and desirable employment ► reduction in less desirable forms of employment (casual piece job agricultural labor) ► participation in social networks of reciprocity and support ...so, what do we see?
  4. 4. Analytical framework Pre-program level program execution Post program level Comparison group Program group ΔP ΔC Impact ΔP = Change in level of program group ΔC = Change in level of comparison group ΔP-ΔC = Impact of program (DD) ► Randomized phase-in of beneficiaries creates treatment (T) and control groups (C) ► Impacts are established comparing changes in indicators between T and C (difference-in-differences)
  5. 5. What we find: productive activities Zambia Malawi Kenya Lesotho Ghana Agricultural  inputs   +++   -­‐  -­‐  -­‐   ++   +++   Agricultural  tools   +++   +++   NS   NS   NS   Agricultural  produc4on   +++   NS   ++(1)   NS   Home  produc4on  of   food   NS   +++   +++   NS   Livestock  ownership   All  types   All  types   Small   ++(2)   NS   Non  farm  enterprise   (NFE)   +++   NS   +FHH   NS   NS   1)  Maize and garden plot vegetables 2)  Pigs
  6. 6. What we find: labor allocation adults Zambia Kenya Malawi Lesotho Ghana Agricultural/casual  wage   labor   -­‐  -­‐  -­‐   -­‐  -­‐  -­‐   -­‐  -­‐  -­‐   -­‐-­‐   NS   Family  farm   +++   +++   +++   NS   +++   Non  farm  business  (NFE)   +++   +++   NS   NS   Non  agricultural  wage  labor   +++   NS   NS   NS   NS   children Wage  labor   NS   NS   -­‐  -­‐  -­‐   NS   NS   Family  farm   NS   -­‐  -­‐  -­‐  (1)   +++   NS   NS   1) Particularly older boys Shift from to own farm No clear picture on child labor (but usually positive impacts on schooling)
  7. 7. What we find: social networks and risk coping strategies Zambia Kenya Malawi Ghana Lesotho Nega4ve  risk  coping     -­‐  -­‐  -­‐   -­‐  -­‐  -­‐   Pay  off  debt   +++   +++   NS   Borrowing   -­‐  -­‐  -­‐   NS   -­‐  -­‐  -­‐   NS   Purchase  on  credit   NS   NS   NS   Savings   +++   +++   +++   Give  informal  transfers   NS   +++   +++   Receive  informal  transfers   -­‐  -­‐  -­‐   NS   +++   Qualitative results: Ø Re-engagement with social networks, re-investing in alliances and social security Ø Allow to participate, to “mingle” again Ø Increase in savings, paying off debt and credit worthiness
  8. 8. What we find: food security Zambia Kenya Malawi Ghana Lesotho Inadequate  for  @  least  1  month   NS   Months  with  sufficient  food   +++   NS   Months  some  shortage   +++   Months  extra  shortage   -­‐  -­‐  -­‐   Eats  more  than  one  meal  a  day   +++   +++   Food  security  scale   +++   +++   +++   NS   Is  not  severely  food  insecure   +++   BeSer  off  than  12  months  ago   +++   Child  smaller  meal   -­‐  -­‐  -­‐   Child  fewer  meals  than  needed   -­‐  -­‐  -­‐   -­‐  -­‐  -­‐     Child  sleep  hungry   -­‐  -­‐  -­‐   NS   Food security asked about in different ways across countries. All, however, positive.
  9. 9. What  we  find:  nutri/on   Zambia Kenya (1) Malawi Ghana Lesotho Meat   +++   +++   +++   -­‐  -­‐  -­‐   NS   Dairy   +++   +++   +++   NS   NS   Cereals   +++   NS   +++   NS   NS   Fruits/vegetables   NS   NS   +++   NS   NS   Sugars   +++   +++   +++   NS   NS   Fats,  oil,  other   +++   +++   +++   +++   NS   Dietary  diversity   +++   +++   +++   NS   NS   1)  2007-­‐2009   no  impact   Big  impact  
  10. 10. What explains difference in impact? Crop     Livestock   NFE   Produc/ve   labor   Social   Network   Food   security   Zambia   yes   yes   yes   yes   yes   Malawi   yes   yes   no   yes   small   yes   Kenya   no   small   yes   yes   Lesotho   yes   small   no   no   yes   yes   Ghana   no   no   no   small   small   small  
  11. 11. Targeting important è Transfers impact productive outcomes more if targeted to less labor constrained hhlds Under 5 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 to 74 75 to 79 80 to 84 85 to 89 Over 90 1000 500 500 1000population Males Females Ghana LEAP Under 5 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 to 74 75 to 79 80 to 84 85 to 89 Over 90 2000 500 500 2000population Males Females Zambia CGP
  12. 12. Predictability of payment important è  Reliable source of income enables appropriate planning, which leads to consumption smoothing and investment. 0 1 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 #ofpayments Zambia CGP 0 1 2 3 4 5 6 #ofpayments Ghana LEAP
  13. 13. Value of transfer important 0 5 10 15 20 25 30 35 40 Ghana LEAP (old) Kenya CT-OVC (big) Burkina Kenya CT-OVC RSA CSG Lesotho CGP (base) Ghana LEAP (current) Kenya CT-OVC (small) Zim (HSCT) Zambia CGP Zambia MCP Malawi SCT Widespread impact Selective impact %orpercapitaincomeofpoor è Little impact for transfers <20-30% of per capita consumption
  14. 14. …and account for inflation è  None indexed with inflation, though value of transfer adjusted in some countries. 0 1,000 2,000 3,000 KenyanShilling 2007 2008 2009 2010 2011 Kenya CT-OVC erosion of transfer
  15. 15. …evidence cash transfers need not be conditional Zambia   Kenya  (1)   Malawi   Ghana   Lesotho   Total   +++   +++   +++   NS   NS   Food   +++   +++   +++   NS   NS   Educa4on   NS   NS   NS   NS   +++   Health   +++   +++   +++   NS   NS   Clothing   +++   +++  (2)   NS   +++   Alcohol/tobacco   NS   NS   NS   NS   -­‐  -­‐  -­‐   1) 2007-2009 2) Changes of clothing, not consumption per se unique
  16. 16. For each Cedi transferred local income increases by 2.5 Cedi (90% CI: 2.38-2.65) Nearly all the spillover goes to non- beneficiary households Local economy and supply response important
  17. 17. Production constraints can limit supply response, which may lead to higher prices and a lower multiplier If supply response is constrained, real income multiplier can be as low as 1.50
  18. 18. Size of income multiplier varies by context Differences across countries: Openness of local economies Where money is spent in local economy 0 0.5 1 1.5 2 2.5 3 Kenya (Nyanza) Ethiopia (Abi- Adi) Zimbabwe Zambia Kenya (Garissa) Lesotho Ghana Ethiopia (Hintalo) Nominal multiplier Real multiplier
  19. 19. ►  Demographic profile of beneficiary households •  Available labor: OVC? Households with young children? ►  Relevance of messaging and soft conditions on social spending ►  Access to productive assets ►  Value of the transfer relative to the total expenditure ►  Relative importance of subsistence agriculture, diversity of the local economy, nature of market constraints : e.g. openness of local economies, where money is spent in local economy ►  Coordination with other interventions Differences across countries: in summary Relative impacts between programmes dependent on:
  20. 20. Making cash transfers more productive: operational and policy 1.  Ensure transfers meet threshold & sustain them over time 2.  Ensure payment predictability 3.  Link transfers to supply side interventions 4.  Target households with higher potential to sustainably achieve self-reliance (e.g. less labour constrained households) 5.  Consider messaging: unconditional cash transfers successful in achieving desired outcomes; sharpen focus towards productive objectives?
  21. 21. Cash transfers needs to be part of a rural development strategy ► Potential conflicts with social objectives but on other hand, social ministries increasingly recognize the need to focus on livelihoods as well ► Cash transfer programmes cannot replace sector economic development strategy, nor do they constitute a motor of growth in and of themselves ► Almost three quarters of economically active rural population are smallholders, most producing own food ► Small holder agriculture as key for rural poverty reduction and food security in Sub Saharan Africa –  Relies on increased productivity, profitability and sustainability of small holder farming ► Social protection and agriculture need to be articulated as part of strategy of rural development –  Link to graduation strategies
  22. 22. Our websites From Protection to Production Project http://www.fao.org/economic/PtoP/en/ The Transfer Project http://www.cpc.unc.edu/projects/transfer

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