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Policy paper

The Impact of Cash Transfers on Local Economies

2015 — By Stephanie Levy, Alain de Janvry, Elisabeth Sadoulet, Manuela Angelucci, John Hoddinott, Guush Berhane, Daniel O. Gilligan, Neha Kumar, Alemayehu Seyoum Taffesse, Jesse M. Cunha, Giacomo De Giorgi, Seema Jayachandran, Pantaleo Creti, J. Edward Taylor

In this special edition of Policy in Focus, leading authors and practitioners present their research on how cash transfers can impact the local economy when implemented in a developing country. The aim is to gather and review research results and evidence, obtained from various methodologies ranging from randomised control trials (RCTs) to village economy models and general equilibrium analysis, applied on small-scale programmes to larger-scale policies in Latin America, Africa and South-East Asia. The economic impact of social transfers is analysed here through their effects on investment, productivity, prices, employment and trade and through more general equilibrium effects of redistributive policies.

This publication offers a review of empirical methodologies and findings that can help economists and policymakers address these questions, in the hopes of stimulating a better-informed debate around the economic impact of social transfers, backed up by empirical, rigorous and sometimes contradictory evidence on market impacts.

Included articles:

  • The Impact of Cash Transfers on Local Economies: A Foreword
  • Cash Transfers with Income Multipliers: Making Social Assistance Good for Growth
  • Insurance, Investment and Consumption: The Role of the Extended Family in the Use of Cash Transfers
  • Linking Social Protection to Agriculture: Evidence from Ethiopia
  • The Impact of In-kind and Cash Transfers on Local Prices
  • The Impact of Short-term Cash Transfers on Unstructured Markets: A Case Study in Northern Uganda
  • Cash Transfer Spillovers: A Local Economy-wide Impact Evaluation (LEWIE)
  • Cash Transfers and Economic Growth: Some Steps Beyond Wishful Thinking
  • The Bolsa Família Programme: Distribution and Growth
  • Linking Economic Growth and Economic Equity in Transfer Programmes