Exchanging Experiences, Expanding Opportunities

Productive Spillovers of Social Cash Transfers in Africa: A Local Economy-wide Impact Evaluation

File Created On:
July, 2014

Source: UNDP

Many countries around the globe, including in sub-Saharan Africa,have implemented social cash transfers (SCTs) as a new line of attack against extreme poverty. Most African SCT programmes involve the unconditional transfer of cash to households that are both asset-and labour-poor. The stated goals of these programmes are social:to improve the welfare of the treated households by providing cash and encouraging changes in behaviour related to nutrition, education and health. But by providing poor households with cash, SCT programmes also treat the local economies of which these households are part, by stimulating demand for local goods and services. In light of the eligibility criteria for SCTs, ineligible households may be more likely than eligible households to expand their production to meet new local demand. If the local supply response is sufficiently elastic, the impacts in local economies may be expansionary rather than inflationary.