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cash transfers

Cash Transfers Increase Trust in Local Government

David Evans's picture

Cash transfers seem to be everywhere. A recent statistic suggests that 130 low- and middle-income countries have an unconditional cash transfer program, and 63 have a conditional cash transfer program. We know that cash transfers do good things: the children of beneficiaries have better access to health and education services (and in some cases, better outcomes), and there is some evidence of positive longer run impacts. (There is also some evidence that long-term impacts are quite modest, and even mixed evidence within one study, so the jury’s still out on that one.)

In our conversations with government about cash transfers, one of the concerns that arose was how they would affect the social fabric. Might cash transfers negatively affect how citizens interact with each other, or with their government? In our new paper, “Cash Transfers Increase Trust in Local Government” (can you guess the finding from the title?) – which we authored together with Brian Holtemeyer – we provide evidence from Tanzania that cash transfers increase the trust that citizens have in government. They may even help governments work a little bit better.

How do household contributions to public goods respond to cash transfers? Guest post by Michael Walker

This is the eighteenth and final entry in this year's job market series. You can read them all here

A central question in development economics is how to fund public goods. Informal taxation, whereby households make direct contributions to local public goods (such as water resources, roads and schools) outside of the formal tax system, is an important source of funding for public goods in many low-income countries, especially Kenya (Olken and Singhal 2011, Ngau 1987, Barkan and Holmquist 1986). Informal taxes are coordinated and collected by local leaders and enforced via social sanctions rather than the state. In a formal tax system, legal statutes dictate how taxes change with household income. But how does informal taxation respond to changes in household income?  

My job market paper first quantifies informal taxation in Kenya. Using household panel data, I estimate informal tax schedules over the income distribution and test whether informal taxes respond to changes in earned income. Second, I estimate how informal taxation and public goods respond to a large, one-time increase in income from a randomized unconditional cash transfer program targeting poor households.   

Fact checking universal basic income: can we transfer our way out of poverty?

Berk Ozler's picture
New York Times published an article last week, titled “The Future of Not Working.” In it, Annie Lowrie discusses the universal basic income experiments in Kenya by GiveDirectly: no surprise there: you can look forward to more pieces in other popular outlets very soon, as soon as they return from the same villages visited by the Times.

Do Cash Transfers Have Sustained Effects on Human Capital Accumulation?

Berk Ozler's picture

Cash transfers are great – lots of people are telling you that on a continuous basis. However, it is an open question as to whether such programs can improve the wellbeing of their beneficiaries well after the cessation of support. As cash transfer programs continue to grow as major vehicles for social protection, it is increasingly important to understand if these programs break the cycle of intergenerational poverty, or whether the benefits simply evaporate when the money runs out…

Cash transfers and health: It matters when you measure, and it matters how many health care workers are around to provide services

David Evans's picture

A whirlwind, surely incomplete tour of cash transfer impacts on health
Your run-of-the-mill conditional cash transfer (CCT) program has significant impacts on health-seeking behavior. Specifically, there are conditions (or co-responsibilities, if you prefer) that children get to school and/or that they get vaccinated or have some wellness visits. While the school enrollment effects are well established, the effects on both health seeking behavior and on health outcomes have been much more mixed. CCTs have led to better child nutritional status and improved child cognitive development in Nicaragua, better nutritional outcomes for a subset of children in Colombia, and had no impacts for child health in studies on Brazil and Honduras. CCTs conditioned only on school enrollment did not lower HIV infections among adolescent girls in South Africa; and in Indonesia CCTs increased health visits but did not translate into measurably improved health. Unconditional cash transfer programs have also had mixed results on health, with better mental health and food consumption in Kenya, better anthropometric outcomes for girls (not boys) in South Africa, no average impacts (although some for the poorest quarter) on child outcomes in Ecuador, and no average impacts on maternal health care utilization in Zambia (albeit yes effects for women with better access to such services).

CCTs for Pees: Cash Transfers Halloween Edition

Berk Ozler's picture

Subsidies to increase utilization are used in all sorts of fields and I have read more than my fair share of CCT papers. However, until last week, I had not come across a scheme that paid people to purchase their urine. Given that I am traveling and the fact that I am missing Halloween, I thought I’d share (I hope it’s not TMI)…
Here is the abstract of an article by Tilley and Günther (2016), published in Sustainability:
In the developing world, having access to a toilet does not necessarily imply use: infrequent or non-use limits the desired health outcomes of improved sanitation. We examine the sanitation situation in a rural part of South Africa where recipients of novel, waterless “urine-diverting dry toilets” are not regularly using them. In order to determine if small, conditional cash transfers (CCT) could motivate families to use their toilets more, we paid for urine via different incentive-based interventions: two were based on volumetric pricing and the third was a flat-rate payment (irrespective of volume). A flat-rate payment (approx. €1) resulted in the highest rates of regular (weekly) participation at 59%. The low volumetric payment (approx. €0.05/L) led to regular participation rates of only 12% and no increase in toilet use. The high volumetric payment (approx. €0.1/L) resulted in lower rates of regular participation (35%), but increased the average urine production per household per day by 74%. As a first example of conditional cash transfers being used in the sanitation sector, we show that they are an accepted and effective tool for increasing toilet use, while putting small cash payments in the hands of poor, largely unemployed populations in rural South Africa.”

Did Peru’s CCT program halve its stunting rate?

Berk Ozler's picture

On September 30, the Guardian ran several articles (see here, here, and an editorial here) linking the halving of Peru’s stunting rate (from 28 to 14% between mid-2000s and 2015) to its CCT program Juntos. Of course, it is great to hear that the share of stunted children in Peru declined dramatically over a short period. However, as I know that while CCT programs (conditional or not) have been successful in improving various outcomes including child health, the effect sizes are never this dramatic, I was curious to see whether the decline was part of a secular trend in Peru or actually could be attributed primarily to Juntos

GiveDirectly just announced a basic income grant experiment. Here is how to make it better.

Berk Ozler's picture

In an article in Slate yesterday, co-founders of GiveDirectly announced that they will provide at least 6,000 people in Kenya with a basic income grant (BIG) for a period of 10-15 years, which will cost about $30 million. The proposal is scant in details at the moment, but this article in Vox suggests that dozens of villages will randomly be selected in an already selected region of Kenya for this exercise and everyone within will be given roughly a dollar a day per person for a decade.