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Graduation From Social Safey Nets Daidone Et Al
Graduation From Social Safey Nets Daidone Et Al
Abstract In the last decade social cash transfer programmes have become extremely popular in sub-Saharan
Africa, and are often portrayed as an instrument that can facilitate graduation out of poverty. The evidence on
whether social cash transfers have had actual effects on graduation, however, is limited. This article provides a
cross-country reflection of the potential effects of social cash transfers on graduation, drawing from impact
evaluation results of cash transfer programmes in Ghana, Kenya, Lesotho and Zambia. We analyse whether social
cash transfers have improved the likelihood of graduation, through increased productivity, income generation and
resilience to shocks. We identify which factors in terms of programme implementation and household
characteristics can increase the likelihood of cash transfer programmes facilitating graduation from poverty.
IDS Bulletin Volume 46 Number 2 March 2015 2015 Food and Agriculture Organization of the United Nations.
IDS Bulletin 2015 Institute of Development Studies
Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
93
easy to determine, may not have anything to do by increasing mutually beneficial risk-sharing
with having achieved sustainable livelihoods. arrangements and economic collaboration and by
Measures which focus on poverty status, level of greater inclusion in decision-making processes.
income or consumption, or ownership of assets, Each of these impacts improves the
are difficult to measure and are implicitly linear, sustainability of household income-generating
suggesting a steady progression up an income or strategies and increases the households ability
asset scale, but livelihoods in rural Africa are to potentially graduate out of poverty.
often erratic and uncertain. Even if a household
appears to have passed an income and/or asset The rest of the article is organised as follows.
threshold at some point in time, it is difficult to Section 2 provides a discussion of the main
determine whether a major shock will leave the analytical results. Explanations of observed
household severely vulnerable to hunger and differences across and within countries are
off the road to graduation. presented and discussed in Section 3, followed by
the conclusions in Section 4.
Few social protection programmes in sub-
Saharan Africa make an explicit reference to 2 Impact evaluation results
either threshold graduation or sustainable The cash transfer programme evaluations that
graduation in their objectives or theory of serve as the basis of this article form part of the
change. Attempts to operationalise graduation From Protection to Production (PtoP) project, a
strategies are complex and costly, and may be multi-country effort to analyse the economic
considered less of a priority when facing the impact of cash transfers in sub-Saharan Africa
challenge of the basic programme design taking advantage of existing and ongoing impact
features. However, despite not incorporating a evaluations.2 The project uses a mixed methods
direct measure of graduation, cash transfers by approach, combining econometric analysis based
themselves have the potential to enhance the on experimental or quasi-experimental study
likelihood of graduating, which we define as design, general equilibrium models of the local
those changes over time in livelihood strategies economies and qualitative methods. We focus on
that show the household is on a pathway towards government-run cash transfer programmes in
increasing its capacity to generate income and four countries, each with broadly similar human
being more resilient to shocks. development and rural poverty reduction
objectives. The Kenyan Cash Transfer for Orphans
Drawing from evaluations of four unconditional and Vulnerable Children (CT-OVC) reaches over
cash transfer programmes in sub-Saharan Africa, 250,000 ultra-poor households with children with
this article shows that even if social protection bi-monthly payments of Ksh 2,000 per month
programmes do not have explicit graduation (14.10). The Child Grants Programme (CGP)
objectives they can facilitate progress towards in Lesotho targets 25,000 ultra-poor households
graduation outcomes. We focus in particular on with quarterly payments that range from 120 to
the productive role of cash transfer programmes: 250 Maloti per month (10.90 to 22.80),
their effects on investments, labour supply and depending on the number of children. The
risk-coping mechanisms, as well as on the local Zambia Child Grant Programme (CGP) provides
economy. a fixed bi-monthly payment of 60 Kwacha per
month (10.90) to 20,000 households with young
The main working hypothesis of the article is children, while the Livelihood Empowerment
that regular and predictable flows of cash relax Against Poverty (LEAP) programme in Ghana
liquidity, credit and/or insurance constraints reaches almost 77,000 extremely poor households
faced by recipients, and in this way improve with payments that vary by household size from
livelihood choices and productive income- 8 to 15 Cedi per month (3.60 to 6.70).
generating investments. These impacts come
through changes in individual and household We discuss the impact of the four programmes
behaviour (labour supply, investments and risk on beneficiary households over three broad
management) and through impacts on the local groups of outcome variables: productive
economy of communities where the transfers activities, labour allocation, and social networks
operate. Further, the receipt of these payments and risk-coping strategies. We focus on the
can influence recipients role in social networks, results from the econometric analyses and,
94 Daidone et al. Is Graduation from Social Safety Nets Possible? Evidence from Sub-Saharan Africa
Table 1 Impacts on productive activities
Agricultural inputs ++ - ++ +
Agricultural tools ++ NS NS NS
Agricultural production + NS + NS
Home production of food NS + NS
Livestock ownership ++ + + NS
Non-farm enterprises ++ + NS NS
Source Based on AIR (2013) and Daidone et al. (2014b) for Zambia; Asfaw et al. (2013) for Kenya; Daidone et al. (2014a)
for Lesotho; Handa et al. (2013) for Ghana.
Note Authors assessment. ++: positive and significant for many indicators; +: positive and significant for one or few
indicators or for specific subgroups; NS: not significant; -: negative and significant for one or few indicators or for
specific subgroups. Blank cell for lack of indicators.
where applicable, we supplement the and livestock, with varying magnitudes and
comparative analysis with results from the significance. The Kenya CT-OVC increased the
qualitative evidence that report on similar ownership of small ruminants by both smaller
outcomes. Finally, we also discuss general and female-headed households, while the Lesotho
equilibrium local economy simulations produced CGP led to an increase in pig ownership. The
by the Local Economy-Wide Impact Evaluation CGP combined with a Food Emergency Grant
(LEWIE) model (Taylor 2013).3 brought about a significant increase in the use of
organic fertilisers and pesticides, particularly in
2.1 Impacts on productive activities households with greater labour capacity. The
We look at various dimensions of the productive positive impact on input use in Lesotho led to an
process in order to ascertain whether cash increase in maize and vegetable output,
transfer programmes have led households to especially for households with more labour
increase their investment in non-farm businesses capacity. While the Kenya programme did not
and agricultural activities, including both crop lead to an increase in crop production per se,
and livestock production. A summary of results is beneficiary households increased the share of
provided in Table 1. Overall, cash transfer food consumption derived from own production,
programmes have had a large impact over a particularly animal products.
variety of household productive activities, though
the impacts vary by country. The LEAP programme in Ghana, with the
exception of a significant increase in seeds
In Zambia, the CGP facilitated the purchase expenditure, did not have a statistically
and/or increased use of various types of significant impact on household productive
agricultural inputs and assets, especially by activities, including both crop and livestock
smaller households. This led to an expansion in production. The qualitative fieldwork, however,
the overall value of crop production, which was did record experiences of households utilising
marketed rather than consumed on-farm. LEAP resources in a variety of livelihood
Beneficiary households also invested in a wide activities.
variety of livestock. Furthermore, beneficiary
households were significantly more likely to have 2.2 Impacts on labour supply
a non-farm business, to operate enterprises for Along with increases in crop and livestock
longer periods and more profitably, and to production, the four cash transfer programmes
accumulate physical capital. have led to changes in household labour supply.
Qualitative fieldwork on these programmes
In Kenya and Lesotho, households invested some consistently reports a shift from casual
of the cash for productive purposes in crop inputs agricultural wage labour to on-farm and own-
Adults
Agricultural wage labour -- - NS
--
Non-agricultural wage labour + NS NS
Family farm ++ + + +
Non-farm business ++ NS
Source Based on AIR (2013) and Daidone et al. (2014b) for Zambia; Asfaw et al. (2013) for Kenya; Daidone et al.
(2014a) for Lesotho; Handa et al. (2013) for Ghana.
Note Authors assessment. ++: positive and significant for many indicators; +: positive and significant for one or few
indicators or for specific subgroups; NS: not significant; -: negative and significant for one or few indicators or for
specific subgroups; - -: negative and significant for many indicators. Blank cell for lack of indicators.
business activities. The picture coming from while elderly women increased their participation
quantitative impact assessments is more complex on-farm. In Ghana, the LEAP programme
and is summarised in Table 2. In Zambia, the increased on-farm activities for males.
CGP transfers led family members to reduce
their participation in, and intensity of, 2.3 Impacts on social networks and risk-coping strategies
agricultural wage labour. The impact was Next we look at impacts of cash transfers for
particularly strong for women, amounting to a various indicators concerning risk-coping
17 percentage point reduction in participation strategies, social networks and saving/borrowing
and 12 fewer days a year. Both men and women behaviour, for which we provide a summary in
increased the time they spent on family Table 3. Cash transfers have allowed beneficiary
agricultural and non-agricultural businesses.4 In households to better manage risk in all four
Kenya, Lesotho and Ghana, while impacts are countries. Qualitative fieldwork in Kenya, Ghana
not significant overall, significant shifts varied by and Lesotho suggests that the programmes
age and gender. For example, in Lesotho male increased social capital and allowed beneficiaries
participation in casual wage labour decreased, to re-engage with existing social networks and/or
Source Based on AIR (2013) and Daidone et al. (2014b) for Zambia; Asfaw et al. (2013) for Kenya; Daidone et al. (2014a)
for Lesotho; Handa et al. (2013) for Ghana.
Note Authors assessment. ++: positive and significant for many indicators; +: positive and significant for one or few
indicators or for specific subgroups; NS: not significant; -: negative and significant for one or few indicators or for
specific subgroups; - -: negative and significant for many indicators. Blank cell for lack of indicators.
96 Daidone et al. Is Graduation from Social Safety Nets Possible? Evidence from Sub-Saharan Africa
Figure 1 Nominal and real income multiplier, by country
3.0
2.5
Income multiplier
2.0
1.5
1.0
0.5
0
Kenya 1 Zambia Kenya 2 Lesotho Ghana
to strengthen informal social protection systems in these four countries ranging from 1.34 in
and risk-sharing arrangements. These results Nyanza District, Kenya to 2.50 in Ghana (see
were corroborated by econometric analysis in Figure 1). That is, for every Cedi transferred by
Ghana and Lesotho. the programme in Ghana, up to 2.50 Cedi in
income can be generated for the local economy.
The cash transfer programmes led to a reduction
in negative risk-coping strategies, such as begging When credit, capital and other market constraints
or taking children out of school in Lesotho. limit the local supply response, however, the
Moreover, the cash transfer programmes led increase in demand may lead to higher prices and
households to be seen as more financially consequently a lower income multiplier. This real
trustworthy, allowing them to reduce their debt income multiplier in our four countries is lower
and increase their creditworthiness. Beneficiary than the nominal income multiplier, although it
households in Ghana and Zambia increased their remains greater than one in each case.
cash savings. In many cases, however, households
remain risk averse and reluctant to take 3 What drives differences in impact?
advantage of their greater access to credit. Our review of evidence on the effects on
productive activities of four cash transfer
2.4 Impacts on the local economy programmes in sub-Saharan Africa reveals some
Cash transfer programmes also have significant common trends as well as contrasts across
impacts on the local economy in which they are countries. The CGP programme in Zambia had a
implemented. When beneficiaries spend the broad range of impacts across productive
cash, programme impacts are transmitted to outcomes, while the other programmes had more
others inside and beyond the local economy, selective impacts. The results provide some
often to households that are not eligible for cash indication as to the conditions which enable cash
transfers who own local businesses. These transfer programmes to have a stronger effect on
income multipliers were measured using the transforming livelihoods and increasing
LEWIE village economy model, which generated productive activities which, we argue, is an
nominal income multipliers for the programmes important step towards sustainable graduation.
15 10 5 5 10 15 15 10 5 5 10 15
Population (%)
Males Females
Our analysis suggests three categories of factors. approach; it targets households with children in a
narrower age range (between 0 and 5 years), who
3.1 Household level enablers of livelihoods transformation live in households with relatively younger parents.
A first set of conditions relates to the
characteristics of households and individuals that The adoption of different targeting criteria had
are targeted by cash transfer programmes. In strong implications for the demographic
sub-Saharan Africa, one group of cash transfer characteristics of beneficiary households across
programmes (for example, LEAP in Ghana) has programmes (Figure 2). Ghanas LEAP
been targeted to households that are vulnerable programme has the largest concentration of
as well as poor, in part as a desire to reach elderly beneficiaries, with relatively few adults of
households affected by the HIV pandemic. working age, few small children, and lots of older
Vulnerability is often defined as inability to work children and adolescents. The Zambia CGP
(elderly, disabled), and/or with a high dependency benefits a much larger proportion of working age
ratio. In a second group of countries (such as adults with small children.
Kenya and Lesotho) programmes have adopted a
stronger focus on reducing child poverty, often The varying degree of labour availability likely
mediated by the notion of orphans and vulnerable contributes to explaining the differences in
children (OVC). The Zambia CGP varies the productive impacts observed across programmes.
98 Daidone et al. Is Graduation from Social Safety Nets Possible? Evidence from Sub-Saharan Africa
While labour-constrained households may hire- Transfer predictability
in labour and carry out limited economic A critical feature of cash transfer programmes is
activities, households with available labour are in to provide income support to poor and vulnerable
a better position to take advantage of the cash households in a frequent, regular and predictable
for productive activities, in both the short and manner. The frequency and predictability of cash
long run. transfers are important, as this facilitates
consumption smoothing, planning of expenditures
Access to other assets besides labour can also and moderate risk-taking, in anticipation of future
facilitate the productive use of cash transfers. payments. With strong expectations on the
Numerous stories from the qualitative fieldwork reliability of the transfer flow, households can
illustrate that households with access to more build up assets and precautionary savings that can
land, implements and/or education are in a be used to maintain minimum standards of living
better position to utilise the cash for productive during times of hardship. This can incentivise risk-
purposes, and will likely progress further along taking that is more conducive to income
the pathway towards graduation. diversification and productivity enhancement. It is
also positively associated with the impact of cash
3.2 Programme level enablers of livelihoods transfers on poverty reduction as well as human
transformation capital accumulation (Barca et al. 2013).
A second group of factors that can facilitate or
inhibit the productive impacts of cash transfers has At the time of their respective evaluations,
to do with programme design and implementation operational performance varied from country to
features. These include transfer value, transfer country and is likely to have influenced how
predictability and programme messaging. households spend their transfers. In Zambia the
transfers were delivered regularly throughout
Transfer value the evaluation period. In Ghana payments were
The amount of money transferred to a also meant to be bi-monthly, but the schedule
beneficiary household is clearly a factor in the suffered major disruptions. The Lesotho CGP
range and intensity of impacts on productive was the programme with the least frequent
activities. Transfer levels are set following payment schedule (quarterly), yet it was also
different criteria across countries. Some countries affected by significant delays.
(Kenya in the early phase, Zambia) adopted a flat
transfer schedule while others vary the amount in Messaging
accordance to household size (Kenya at a later A third dimension likely to influence productive
stage), number of children (Lesotho) or number impacts is the messaging and information
of vulnerable people (Ghana). The programmes provided to beneficiaries regarding the expected
generally lack mechanisms to adjust the transfer use of the resources provided. All programmes
amount on a regular basis for inflation. In Kenya, considered in this study were unconditional. Yet
for example, the real value of the transfer fell by unconditional transfers often adopt implicit,
almost 60 per cent because of inflation between indirect or soft conditioning or messaging
2007 and 2011. mechanisms that can have important
consequences for the impact of the transfer
As a result there is a great deal of variation in the (Schring 2010; Pellerano and Barca 2014). The
value of the transfer as a share of beneficiary Lesotho CGP had especially strong messaging on
households per capita consumption. In Zambia expenditures towards childrens clothes, shoes
the relative value of the transfer reached almost and related expenses, which resulted in
30 per cent of per capita consumption, compared particularly large impacts on these expenditures
to less than 10 per cent for the Ghana LEAP in its possibly to the detriment of spending on more
early days. For those countries utilising a flat productive activities.
rate, the per capita value varies by household
size. While for average size households the Kenya 3.3 Market level enablers of livelihoods transformation
transfer represented 14 per cent of per capita Transformation in sustainable livelihoods cannot
consumption, the share ranged from 10 per cent happen without a conducive market environment
to 22 per cent for large and small households, that provides opportunities for income-generating
respectively. activities and increases in productivity. The
This article has addressed this issue in a cross- Third, sustainable graduation is not a credible
country comparative perspective, drawing lessons promise in the absence of conducive market
100 Daidone et al. Is Graduation from Social Safety Nets Possible? Evidence from Sub-Saharan Africa
conditions. Cash transfers can relax some Moving forward, two main challenges can be
liquidity and credit constraints, but cannot identified. First, it is important to refine the
replace a holistic economic development strategy. notion of graduation, distinguishing it from
The shape and type of markets, as well as access programme exit, but also distinguishing between
to and the quality of public services, matter. The a short- and long-term horizon to graduation
degree of market integration and the level of policies, the institutional context of operation
economic dynamism determine the conditions on and the market context. It is also important to
which cash transfer beneficiary households can conceive graduation in the context of a social
access productive inputs (credit, labour, capital protection system, rather than one of single
assets) but also the strength of the market-based programmes. Finally, more research is needed on
demand for beneficiary households potential the determinants of sustainable graduation,
production outputs. Moreover, cash transfers are including the starting conditions and the role of
not a silver bullet they need to be seen in the other household, programme and market
context of a strategy of poverty reduction. They characteristics.
require complementary programmes, whether
existing or specific add-ons, to sustainably bring
households out of poverty.
102 Daidone et al. Is Graduation from Social Safety Nets Possible? Evidence from Sub-Saharan Africa