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Submitted by Daniel Gerber on

This is an interesting discussion also for a non economist. I am wondering though is there any measure of the impact of cash transfers on local food prices over time? One could easily imagine some sort of inflationary impact. A food distribution system while costly might give the government a possibility to control food price inflation somewhat simply because it would be a price maker due to the size of such programs. Otherwise clearly from the government's (MoF) perspective since cash transfers are cheaper to handle by a factor of two they would be preferable if leakages along the distribution chain are manageable. The poor themselves are also likely to be better placed than anyone to determine what their highest priority is, albeit granted it may be different across demographic segments within a family and of course whether it satisfies immediate consumption needs or helps build longer term resilience. Finally, do cash transfers not drive price inflation of the goods and services the poorest need? Or do transfers function as some sort of economic stimuli, benefitting the poor only indirectly by affecting the local economy?