Cash Transfers as an Alternative Aid Delivery Mechanism

Publication date: Friday 24 June 2005

There is growing evidence of the effectiveness of direct cash
transfers in reducing poverty. Evaluation results from the first generation of Conditional Cash Transfer programmes
in Brasil, Mexico and Nicaragua showed clear evidence that
they contributed to increasing enrolment rates, improving
preventive health care and raising household consumption.

Evidence from cash transfers to demobilised soldiers and flood victims in Mozambique also pointed to their low
administration costs and contribution to improving livelihoods
of recipients. While in rich countries more than 80% of the
population is covered by one or more forms of cash transfer
programme, in Africa and Asia such programmes only cover
less than 10% of the population. This is due to a widespread
belief in development policy circles that income transfers to
the poor do not work. Such belief needs to be revisited, with
more focus given to issues of design and implementation of
potential effective interventions. Preconditions for success
in cash transfers include transparent targeting criteria,
automatic and robust delivery mechanisms and transparency
about people’s entitlements.
Source: Hanlon (2004), Harvey et al. (2005), Rawlings and Rubio (2003)

Related links:

from ODI Brifing Paper May 2005
http://www.odi.org.uk/publication...ing/bp_may05_absorptive_capacity.pdf