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Examining the Economic Impact of the
Social Cash Transfer in Mchinji Malawi
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Papers in Review
Miller, C. (2011). “On the backs of the poor: The burden of widespread poverty on cash transfer recipients” In review.
Abstract: This study examines community level impacts of the Malawi Social Cash Transfer Scheme. Specifically, we examine one village group—a microcosm of Mchinji District—to understand how Social Cash Transfer (SCT) recipients direct inputs to non-beneficiaries in a context of widespread poverty. We interviewed SCT recipient households and the community members who report receiving employment, food, cash, loans and gifts from cash transfer households. The vast majority of SCT households report providing inputs to family members living outside the home, who often beg for employment, food, and cash. Even when cash transfer payments are irregular, SCT households channel a portion of the cash to other households in the community. Given widespread poverty and insufficient social protection and poverty alleviation programs in Malawi, poverty reduction in ultra and moderately poor households has fallen “on the backs of the poor”.
Miller C. (2010). “Cash Transfers and Economic Growth: A mixed methods analysis of transfer recipients and business owners in Malawi.” In review.
Abstract: Policies that reduce poverty and stimulate economic growth could be transformational for direct recipients, as well as disadvantaged communities. This study, conducted in Mchinji Malawi from 2007-2009, uses data from two sources: 1) a randomized community control trial designed to measure the impact of the cash transfer and 2) qualitative interviews with business owners, to examine the impact of cash transfers on economic growth.
Over the course of one year, the cash transfer intervention group regularly purchased a variety of foods, basic necessities, and livestock, and increased expenditures on healthcare and schooling supplies versus the comparison group whose expenditures remained low throughout the study. Additionally, cash transfer households invested in productive assets and farming equipment, which led to greater agricultural production.
The majority of business owner respondents confirmed that transfer recipients are frequent customers and reported that sales to transfer recipients were an important part of their business. Respondents reported that the transfer strengthened local markets by providing a steady source of customers and cash, with reliable sales even during the rainy season.
This study yields insights into the mechanisms by which cash transfers impact economic growth and contributes to the discourse on social protection strategies. Once the cash transfer scheme is operational throughout Malawi, it appears as though there will be important impacts for recipients and local businesses. Findings from this study may be applicable throughout resource-poor countries in Africa. Still, continued follow up and larger studies are needed to determine the consistency and scale of impacts on economic growth and development.
Economic Impact of the Cash Transfer (Preliminary Findings) June 15, 2009
Report on the Economic Impact of the Malawi Social Cash Transfer (Draft) November 2009
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| A family in Mchinji |
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The Center for International Health and Development (CIHD) at Boston University (BU), in collaboration with the Centre for Social Research (CSR) from the University of Malawi, is examining the potential of the social cash transfer to contribute to economic growth in Mchinji, Malawi. Our goal is to examine whether one instrument (the cash transfer) within the broader social protection policy framework, is a promising component in poverty reduction, with prospects for short and long-term impacts on economic growth.
The study questions are (1) What is the potential of the cash transfer to influence economic growth in the local economy? and (2) Does the cash transfer contribute to poverty alleviation within the wider community among households that benefit indirectly from the scheme.
To answer these questions, we intend to conduct (1) an analysis of existing data, and (2) new data collection where we first conduct a household listing and screen households to determine whether they receive any gifts or loans or provide labor to households receiving the cash transfer. We will then use a quantitative survey to examine how households are indirectly benefiting from the transfer and ask households to keep diaries of these experiences. We will return to households several times over six months to measure seasonal differences in these spillover transactions from cash transfers.
This project will provide evidence for policymakers and donors as they make decisions about social protection policies. It will build on the limited existing literature in this area by explaining the mechanisms by which social protection strategies can directly and indirectly lead to economic growth in communities. In addition, the study will generate evidence quantifying the returns that can be expected for a given level of investment in the form of cash transfers to poor households.
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