The Multiplier Effect of Multipurpose Cash Assistance in Ad Dhali and Ja’ar Sub-districts in Yemen

The Social Accounting Matrix (SAM) multiplier effect study provides valuable insights into the economic impact of Multipurpose Cash Assistance (MPCA) in the Ad-Dali and Ja’ar sub-districts of Yemen. By employing the SAM approach, the study effectively demonstrates how cash injections can transform local economies.

Key findings indicate a significant multiplier effect, with each US dollar of MPCA estimated to generate USD 2.56 in Ad-Dali and USD 2.29 in Ja’ar. This suggests that cash transfers substantially enhance local economic activity beyond the initial investment, highlighting their potential for economic rejuvenation in areas affected by crisis.

The research methodology involved constructing SAMs to model expenditure flows among households and local businesses, effectively capturing the circulation of income within these communities. The study carefully selected data on household and business expenditures to ensure a representative and accurate portrayal of local spending patterns. Findings revealed considerable increases in local expenditure, particularly benefiting local traders and service providers.

The study underscores the economic efficiency of cash assistance compared to traditional aid modalities, reinforcing its role in supporting local markets and fostering community resilience. However, it is important to note that the study concludes these economic impacts are transient boosts rather than indicators of long-term economic growth.

Overall, this analysis provides critical insights for stakeholders considering cash assistance as a humanitarian response, demonstrating its capacity to effectively stimulate local economies. The findings advocate for the integration of SAM-based evaluations in the development of future aid programs, particularly in economically fragile regions.