Cash transfers are an increasingly popular social protection mechanism throughout Latin America, where conditional cash transfers are dominant, and sub-Saharan Africa, where unconditional cash transfers are more common. How can this difference in approaches be explained, and what evidence exists on their relative effectiveness?
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A cash transfer recipient’s fingerprints are captured on a computerised database, Dowa district, Malawi. Stephen Devereux, 2007
Other articles in this issue
Conditional cash transfers (CCTs) have been promoted as innovative poverty reduction programmes because they combine income support to poor families with investments in human capital. But have they delivered on these promises? Comparative research across four countries in Latin America suggests that they have.
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Despite the growing popularity of Conditional Cash Transfers (CCTs), some policymakers remain concerned that these programmes create disincentives to work. Evidence from a large programme in Mexico shows that cash transfer do not discourage recipients from working.
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The campaign for a ‘basic income grant’ is based on principles of equity and social justice. But critics argue that cash transfers for all are unaffordable, especially in poor countries. A pilot project in Namibia demonstrates that a universal Basic Income Grant (BIG) could be both effective and affordable.
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Cash transfers reduce current poverty by enhancing poor people’s access to food and other basic needs. Claims for long term impacts can also made, based on recipients’ investment of cash grants in their farm, business or human capital. Evidence from South Africa confirms that cash transfers achieve positive education, health and nutrition outcomes – even without attaching conditions.
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Conditional cash transfer programmes often transfer cash to women, on condition that they meet the health, education and nutrition targets for their children. Evidence from Nicaragua suggests that the Red de Protección Social programme may not have had sustainable impacts, and may even have negatively affected women participants.
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Evidence on the gender impacts of social protection interventions is mixed, with variable outcomes depending on programme design and local culture. A cash transfer project in Lesotho found complex but generally positive impacts on relations between men and women.
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Like many issues in social protection, the ‘cash versus food debate’ remains unresolved. Although cash appears to enjoy many advantages over in-kind transfers, the recent global food crisis has shown that cash transfers might be inappropriate in weak economies, and most cash programmes have been unable to raise payment rates in line with price inflation.
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