ZAMBIA: Household Spending exceeds Unconditional Cash Transfers with 59% within three years: a Randomized Controlled Trial

ZAMBIA: Household Spending exceeds Unconditional Cash Transfers with 59% within three years: a Randomized Controlled Trial

 

In a recent review, the World Bank estimates that around 150 countries in the ‘developing world’ have implemented cash assistance programmes, which together reach approximately 800 million people.

The impact of such programmes in sub-Saharan Africa was thoroughly evaluated, using experimental data from two Unconditional Cash Transfer (UCT) programmes implemented by the Government of Zambia, where each programme is accompanied by a randomized controlled trial (RCT).

A UCT is similar to an Unconditional Basic Income (UBI) in that beneficiaries are paid directly in cash with no requirements on their actions. The main difference between the types of programmes concerns the inclusion criteria for participation. A UBI is targeted at every citizen, regardless of (for instance) socioeconomic status, whereas the UCT’s are often available for the poor population only, often with specific inclusion criteria, such as the presence of children of a specific age in a household or geographical criteria.

 

In 2010, the Zambian government began testing two different UCT-programmes. The programmes are still on-going. One of them is targeted at households with a child under age 3, while the other is targeted at households with various types of vulnerabilities (female or elderly headed households taking care of orphans or disabled children). Neither of the programmes is explicitly poverty targeted at the household level, but the (geographical) inclusion criteria resulted in 90% of beneficiaries below the Zambian poverty line. The outcome-parameters are identical in the two programmes. In each case, the annual amount transferred to a household is $144 ($24 every two months).

The effects after 2 and 3 years were compared to baseline. Far-reaching effects were reported in both groups, not only on the primary objective, food security and consumption, but also on a range of productive and economic outcomes.

A relatively simple flat cash transfer, unconditional and paid every two months, is shown to have wide-ranging effects on ultra-poor households in rural Zambia, significantly raising consumption and increasing food security, children’s schooling and material well-being, while at the same time strengthening economic capacity and assets.

After three years, household spending was -on average- 59% larger than the value of the transfer received.

These results are presented in a paper published by UNICEF: “Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction? Evidence from two government-led programmes in Zambia.

 


Additional info:

A Basic Income News article by Tyler Prochazka about a recent meta-analysis (of 165 studies) on the effects of Cash Transfers can be found here.

cover photo (published with permission) and full citation of the paper:

Handa, Sudhanshu; Natali, Luisa; Seidenfeld, David; Tembo, Gelson; Davis, Benjamin. Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction? Evidence from two government-led programmes in Zambia, Innocenti Working Papers no. IWP_2016_21, UNICEF Office of Research – Innocenti, Florence

 

Special thanks to Josh Martin and Kate McFarland for reviewing this article.

 

AFRICA: “An African Identity We All Aspire To,” Nkateko Chauke

AFRICA: “An African Identity We All Aspire To,” Nkateko Chauke

The Southern African Development Community (SADC) is a region rich in minerals and energy resources. At the same time, though, it is plagued by high rates of poverty and extreme income inequality; indeed, its member states include the three nations of highest income inequality in the world (Namibia, South Africa, and Botswana).

It is also becoming a setting of basic income experimentation and activism. Namibia was the setting of a successful basic income pilot study in 2008-09, and other countries in the region have also experimented with cash transfer programs, to positive results.

Nkateko Chauke of the Studies in Poverty and Inequality Institute, an independent think tank based in South Africa, is the campaign coordinator for SADC BIG — which promotes a “SADC-wide universal cash transfer to be funded by a tax on extractive industries.”

In honor of Africa Day (May 25th), Chauke wrote an op-ed for the Daily Maverick arguing that “a universal cash transfer, predominantly funded through extractive industries, will be a remarkable stride towards poverty eradication, reduced inequalities among Africans, equal economic participation and overall African unity.”

Through the realisation of a common vision and a consolidation of national interests – with more robust social protection programmes that will ensure the redistribution of of the proceeds of extractive industries to break the crippling levels of poverty and inequality – a unified culture of people will support a long-term agenda for transformation in Africa for the achievement of sustainable development and integration.

Read the article here:

Nkateko Chauke, “An African identity we all aspire to,” Daily Maverick, May 25, 2016.

Image: Copper mine in Zambia; BlueSalo via Wikimedia Commons

Garcia, Marito and Charity M. T. Moore. The Cash Dividend: The rise of cash transfer programs in Sub-Saharan Africa

The World Bank has published a report, The Cash Dividend: The rise of cash transfer programs in Sub-Saharan Africa, by Marito Garcia and Charity M. T. Moore. The authors conclude: ‘Much can already be learned from Sub-Saharan Africa’s experience with cash transfer programs. Evaluations of unconditional programs have found significant impacts on household food consumption (for instance, Miller, Tsoka, and Mchinji Evaluation Team 2007 for Malawi’s Social Cash Transfer Program; Soares and Teixeira 2010 for Mozambique’s Food Subsidy Program); nonfood consumption (for instance, RHVP 2009 for Zambia’s Social Cash Transfer); and children’s nutrition and education (including Agüero, Carter, and Woolard 2007 and Williams 2007 for South Africa’s Child Support Grant). A recent experimental evaluation found that a program for adolescent girls conditioned on their school attendance improved enrollment, attendance, and test scores in Malawi. Unconditional transfers in the same program decreased early marriage and pregnancy among girls who had already dropped out of school.’ (p.8).

https://bit.ly/ct4SSA