Syndicate content

cash transfers

Confusing a treatment for a cure

Berk Ozler's picture
A treatment is an instance of treating someone, say, medically. A cure ends a problem. Sometimes, the treatment is a cure. Other times, it just keeps the problem under control without curing it: if you remove the treatment, the problem comes back…
 

Do the Poor Waste Transfers on Booze and Cigarettes? No

David Evans's picture
While discussing a cash transfer program, a senior government official in Nicaragua spoke for many when she worried that “husbands were waiting for wives to return in order to take the money and spend it on alcohol” [Moore 2009]. This concern around cash transfer programs comes up again and again. For at least some of the poor, some will say, “Isn’t that how they became poor in the first place?”

Six Strategies to Fight Corruption

Augusto Lopez-Claros's picture

Having looked at some of the ways in which corruption damages the social and institutional fabric of a country, we now turn to reform options open to governments to reduce corruption and mitigate its effects. Rose-Ackerman (1998) recommends a two-pronged strategy aimed at increasing the benefits of being honest and the costs of being corrupt, a sensible combination of reward and punishment as the driving force of reforms. This is a vast subject. We discuss below six complementary approaches.

Africa Impact Evaluation Podcast: Community-Based Conditional Cash Transfers Make a Big Difference in Tanzania

David Evans's picture


Photo credit: Katrina Kosec.

Can a cash transfer program that relies heavily on communities to target beneficiaries, deliver payments, and monitor conditions, improve outcomes for the poor in the same way that more centrally-run conditional cash transfer programs (CCTs) have elsewhere?

Why are Direct Dividend Payments so Difficult in MENA?

Kevin Carey's picture

As a wave of newly resource-rich countries, especially in sub-Saharan Africa, looks to the best means of managing resource wealth, one compelling recommendation has come to the fore: to distribute at least some portion of resource revenues to the public through direct dividend payments (DDPs). The case is laid out in papers published at the Center for Global Development by Todd Moss and the World Bank’s Shanta Devarajan and Marcelo Giugale. The DDP proposal has several foundations. Payment technology has increased the feasibility of large-scale transfers, as Alan Gelb and Caroline Decker explain. There are already cases of developing countries scaling up identity card systems associated with cash transfers quite quickly. As for rationale, given the poor track record of public expenditure efficiency, especially in resource-rich countries, it seems clear that general welfare could be targeted more effectively through DDPs, and without any of the distortionary effects or distributional flaws of price subsidies. Finally, from a political economy perspective, DDPs coupled with taxation could restore the accountability of a government to its citizens, which is otherwise weakened by its ability to draw on revenues directly from the source.
 

Rethinking the household: the impacts of transfers

Markus Goldstein's picture
Two weeks ago, I blogged about some productive impacts of cash transfer programs.   For these effects, as well as the myriad other blog posts and papers on this topic out there, a key point is that the benefits of these transfers extend well beyond the actual individual recipient of the transfer.   
 

Jishnu and Shanta Talk Transfers

Shanta Devarajan's picture

Shanta:  Jishnu, your blog post and mine on cash transfers generated a lot of comments.  Some people argued that giving poor people cash will not “work” because they will spend it on consumption rather than on their children’s education, which is something we care about.  What do you have to say to that?

Jishnu:  I don’t think the question “does giving cash to poor people work?” is well-defined.  It can only be answered in the negative if we (the donors who give the cash) impose our preferences and judge what poor people spend on relative to those preferences.  But if we give poor people cash so they will be better off, then—by definition—they are better off, regardless of how they choose to spend the extra money.

Should Government Give Money to Tanzania’s Poor?

Jacques Morisset's picture

Men tilling a rice paddie on an irrigation project When confronted with financial distress or some other difficulty, over 80 percent of Tanzanian families say they count on relatives and friends for the support needed to get through it. This is to be expected in African culture which is shaped by a strong sense of affinity with family and tribal ties. 

However, in a poll conducted by the World Bank and Twaweza by phone in November, almost half of Tanzanian households also expressed that they expect to receive some help from their Government (see details in the fourth Tanzania Economic Update). In a world characterized by rapid urbanization and structural changes, government assistance is increasingly viewed as critical. In cities, especially, traditional ties and safety nets are generally losing their force. With economic progress, income disparities tend to widen. For example, the proportion of people living in extreme poverty (i.e. with barely enough resources to afford a 2,000 calorie diet) is only one percent in Dar es Salaam but over 15 percent in most rural areas.

Is the New York Times Ethicist a Better Economist than…..The Economist?

Jishnu Das's picture

The Sunday before last I woke up to a couple of articles in the New York Times Magazine and The Economist. In the first article, the New York Times ethicist was asked a question about Halloween candy: Are dentists who purchase candy from kids (thus protecting their teeth) and donate it to poor families engaging in “thoughtless, unethical and unprofessional” behavior?  The Economist article summarized research on cash transfers to the poor, concluding that “Giving money to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty”. In both articles, the fundamental question is how we measure and judge improvements in welfare based on what people consume. But while the ethicist takes the question head on, The Economist does not even get the question right.

A dentist examines a young child's teeth To see this, recall that in welfare economics there are two rationales for government interventions to make people better off. First, governments fix market failures. If the market does not produce efficient outcomes, the government can use taxes and subsidies to make things better. Externalities are classic examples. I don’t worry that my pollution makes others worse off and therefore “over pollute”. But the government can tax that pollution to the point where I behave “as if” I care about others.

Second, governments redistribute income by giving cash to the poor. If, in society’s judgment, an alternate distribution of consumption is better, government could achieve that distribution by redistributing “endowments” or cash from one party to another.


Pages