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cash transfers

What’s new in social protection – February edition

Ugo Gentilini's picture

Can cash transfers increase trust that citizens bestow upon their government… and even help it work a little better? Yes they can, according to a new paper (and accompanying blog) by Evans, Kosec and Holtemeyer. In 2010, Tanzania launched a pilot conditional cash transfer program, with a randomized roll-out in half of a set of 80 villages. After 2.5 years of transfers, beneficiaries – relative to potential beneficiaries in the waitlisted villages – report a stronger belief that their elected village leaders can be trusted in general, but not their appointed bureaucrats. Beneficiaries are more likely to report that local government leaders take citizens’ concerns into account, and that their honesty has improved over time. Notably, this increased trust does not translate into political activity. Beneficiary households are no more likely to vote in Village Council elections, or attend more Village Council meetings. The research even suggests that the program improves record keeping in the government, but only in sectors linked to transfers (education and health).

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.   

Believing in the future - a road trip to rural Guinea

Mamadou Bah's picture
Lancinet Keita. Photo: Mamadou Bah

On my first project visit since joining the World Bank, I had a chance to accompany the Productive Social Safety Nets project team across the country to the Fouta Djallon region, in the northern part of Guinea, for the launch of their Labor Intensive Public Works (THIMO) activities. This trip allowed me to see firsthand what extreme poverty is. You hear and read about it, but I had the opportunity to meet people who experience it every day. I say opportunity, because going through this further humbled me, gave me more determination, and added purpose to the need to tell their stories—stories of their struggles and their achievements.

Poverty affected about 55% of Guinea’s population in 2012, but this percentage is likely to have increased as a result of the Ebola crisis and economic stagnation in 2014 and 2015. Poverty in Guinea is highly concentrated in the rural areas, where the poverty headcount rate remains far higher (65% in 2012) than in urban centers (35%). The lack of infrastructure, and limited economic opportunities and access to education all create a major development issue for these areas.

Cash it out? Why food-based programs exist, and how to improve them

Ugo Gentilini's picture
© Dominic Chavez/World Bank
© Dominic Chavez/World Bank

India’s state of Chhattisgarh faced a daunting challenge in the mid-2000s. About half of its public food distribution was leaked, meaning that it never reached the intended beneficiaries. By 2012, however, Chhattisgarh had nearly eliminated leakages, doubled the coverage of the scheme, and reduced exclusion errors to low single digits.
How did they do it? 

Are cash transfers better chunky or smooth? Evidence from Nigeria

Gautam Gustav Bastian's picture

Imagine this: You open your mail and it says that you are owed $1,200 from overpaid taxes! After recovering from your elation, you read on. The letter requests you to choose if you would like to be paid over the next year in increments of $100 every month or $300 every three months?

The next frontier for social safety nets

Michal Rutkowski's picture
There has been a doubling in the number of developing countries that provide social safety programs to their citizens. What is causing this shift? Photo: Mohammad Al-Arief/World Bank

Social safety nets – predictable cash grants to poor households often in exchange for children going to school or going for regular health check-ups – have become one of the most effective poverty reduction strategies, helping the poor and vulnerable cope with crises and shocks.  Each year, safety net programs in developing countries lift an estimated 69 million people living in absolute poverty and uplifting some 97 million people from the bottom 20 percent – a substantial contribution in the global fight against poverty.

Madagascar 25 years later: Human development investments are making a difference!

Lynne Sherburne-Benz's picture
Lynne Sherburne-Benz, World Bank Senior Regional Advisor for Africa, exchanges with young beneficiaries of the Madagascar Social Safety Net Project.

I first visited Madagascar in 1985 as a student doing research with FOFIFA, Madagascar’s national center for agricultural research. I was fortunate to be able to come back in the early 1990s as a task team leader for a project funded by the World Bank, at a time when the Bank was restructuring its projects to respond to drought in southern Madagascar. Over two decades later, here I am again in the South of this beautiful country, which is suffering again from drought and continues to be counted among the poorest countries in the world.

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…