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Can Cash Transfers Promote Food Security in the Context of Volatile Commodity Prices? A Review of Empirical Evidence

2009 — By Benjamin Magen, Cynthia Donovan, and Valerie Kelly

This working paper synthesizes the theoretical and empirical literature on the use of cash transfers in response to food crisis situations, with particular attention to their use in situations that are exacerbated by volatile, often inflationary, commodity prices. The paper is designed for policymakers who are wondering if cash transfers might be an appropriate instrument in the context of 2008’s unstable commodity prices for both food and energy, but are unfamiliar with the literature and discussions surrounding the cash vs. food debate. After defining some key terms and presenting a brief review of the theory behind cash transfer use, the paper synthesizes evidence from studies that have evaluated past cash transfer programs. While the focus is on examples from Sub-Saharan Africa (primarily Malawi, Mozambique, Zambia, Kenya), there are also valuable lessons incorporated from other regions of the world.