The JSP version of the iconic 2016 Bastagli et al systematic review is out: it discusses the impact of cash transfers on 35 indicators covering six outcome areas, namely monetary poverty; education; health and nutrition; savings, investment and production; work; and empowerment. For most of the studies, cash contributed to progress in the intended objectives, but with variations in size and strength of underlying evidence base. The article also finds limited evidence of unintended effects (e.g., adult work effort and increased fertility). Handa et al further dispel those ‘myths’ in a new WBRO article. Based on findings from the Transfer Project in Africa, they ask if cash transfers lead to higher spending on alcohol or tobacco – answer: no; are they just consumed rather than invested? No; do they create dependency? No; do they reduce participation in productive activities? No; do they increase fertility? No; do they generate price distortions and inflation? No; and are they fiscally unsustainable? Guess what… no! Sustainability is about costs and benefits, and cash transfers generate between 27 and 152% returns in local economies across Africa (see figure). Bonus: a Vox brief on an earlier Baird et al paper corroborates findings on limited labor disincentives, but also reflects on the limitations of classic economic models.
From Africa to India. Some good news on the Public Distribution System: a EDCC article by Kaul estimates that an Rs10 increase in PDS subsidy bolsters food consumption by 126 kcal/day (for all food groups, not only cereals); yet, the impact is almost 50% lower in corrupt states. A JID piece by Das presents new results on NREGA in West Bengal: targeting is relatively pro-poor and, among the ingredients, I liked the discussion on how awareness campaigns by community-based and self-help groups increased program participation. The evaluation, however, shows limited women participation and person-days of work created. Bonus on Jobs Guarantee Programs (JGPs), i.e., open-ended public jobs at min wage, of which NREGA is a variant. Bruening contrasts two competing narratives on JGPs: part of the literature posits that since everyone would be employed, workers would be empowered (via elimination of fear of unemployment or “reserve employees”); a different strand of thinking, instead, suggests that while everyone would be employed, workers wouldn’t strengthen workers’ bargain position: JGPs would simply replace welfare with work requirements. Which is more plausible? The latter, according to him.
From public works to universal cash grants: Stewart and Orton identify 6 areas that we need to understand better, namely addressing exclusion errors, the issue of dignity, administrative costs, political economy, links to and balance with other programs, and financing. But what can cash transfers learn from microfinance? For example, that they should be mindful of the possible increased work placed on women and of the importance of beneficiaries’ voice, according to an IDS opinion note by Wasserman and Mader. In a similar vein, a paper by Lumbasi on a nutritional pilot within the Ethiopia PSNP found that women bear the main responsibility for observing ‘soft’ conditionalities of cash transfer programming, thus reinforcing existing gender norms of women being responsible for care functions. In the context of West Africa, a paper by Zwanck Lwambo and Renk makes the case – and highlight some innovative tools – for a deeper understanding of gender and market analysis. Bonus on gender: Kenny discusses which laws affect gender inequality the most.
Moving to nutrition, an IDS working paper by Devereux and Nzabamwita reviews experiences with social protection in six African countries – Ethiopia, Malawi, Mozambique, Tanzania, Uganda and Zambia. They show that interventions often have significant success in improving household food security indicators, but little or no improvement in individual nutritional outcomes. One reason is under-coverage of poor people; another is the low value of social transfers. There are new estimates on the economic costs of stunting: using a dataset from 74 developing countries over 1984-2014, a paper by Mary sets out three stylized findings, namely a 10% increase in GDP per capita reduces child stunting prevalence by 2.7%; a percentage point increase in child stunting prevalence results in a 0.4% decrease in GDP per capita; and stunting costs on average about 13.5% of GDP.
Labor market-related resources! McKenzie has a fascinating blog on formalizing firms: he shows that when assisting firms in registering a business, 75% of them do so since it virtually eliminates transaction costs. However, registering for taxes outweighs any potential benefits plus the removal of transaction costs: the take-up of assistance for tax registration was around 4%. Also, Clemens et al have a great CGD brief on the economic and fiscal effects of granting labor market access to refugees.
Finally, turning to poverty this has been an amazingly rich week for the subject. Among the vast facts and figures enshrined in a new WB report ‘Solving the poverty puzzle’, some countries (e.g., Ecuador, Mexico, Iraq, Uganda and Tanzania) urban poverty prevalence increases as more dimensions are included in measurement (see discussion and great visuals in p.107-108). Also, the volume releases new spatial figures on urban-rural poverty breakdown, e.g., urban poverty is at 22.6% in Sub-Saharan Africa (see table 4C.1). (BTW, McArthur and Pipa discuss the interesting development of cities adopting the SDGs). A new brief shows that in the OECD, 1 child out of 7 lives in (relative) poverty: cash transfers help (1% increase in spending leads to 1% reduction in poverty rate), but not for jobless and single-parent families. Among them, poverty gap is too deep, and the size of cash is not adequate to lift them up. In the US specifically, an AEI working paper by Rachidi underscores the dynamic nature of poverty: from 2009 to 2011, “… being persistently poor or persistently jobless (meaning more than 27 of the 36-month period) was relatively rare”. For households that experienced poverty at some point (35%), the majority (69.7%) experienced it intermittently (less than half of the three-year period). In a piece from ODI, Shepherd makes a similar argument for global poverty. Bonus: the Venice Summer Institute is hosting a conference on “Poverty, Inequality and their Associations with Disasters and Climate Change” on June 5-6, 2019.