Money works better

Cash transfers are assuming importance in social welfare and anti-poverty policies Money works better

Alok Rajouria

Published at : December 19, 2018

Updated at : December 19, 2018 09:12

To any advocate of cash transfers, a book with a title like Unjust Conditions: Women’s Work and the Hidden Cost of Cash Transfer Programs is bound to evoke curious concerns. Authored by Tara Patricia Cookson and available for free download at Luminos.com, the book contains an institutional ethnographic inquiry of Juntos, a Conditional Cash Transfer (CCT) programme in Peru. Author Cookson projects an in-depth qualitative account of the programme through a feminist lens, while lamenting the shortcomings of underfunded quick-and-murky quantitative analyses. The author highlights some important findings: Complying with conditions increases the care work burden and unpaid labour of women, programme compels beneficiaries to accept substandard health and education services, and frontline managers apply their own additional ‘shadow conditions’ beyond the purview of the programme. However, these findings are based on two programme sites and a handful of cases. Case studies and ethnographies can add precious value to research when they supplement quantitative analyses designed to be more representative of the population under investigation. By themselves being not scientifically representative, qualitative studies can potentially misrepresent the reality. While Unjust Conditions cautions designers and implementers of CCTs about possible pitfalls and externalities, the title of the book itself, not to mention its critical content, may ignite prejudice in policymakers and donors against cash transfers altogether. CCTs deserve some credit for millions of children from poor families who would otherwise not have been vaccinated or graduated from school had their caretakers not agreed to certain conditions for a little cash.

Cash is king

Cash is often the preferred mode of social transfer for it offers the recipient more options and dignity than in-kind support. Cash assistance may be conditional where beneficiaries agree to certain actions usually in their children’s health and education, or unconditional with no such strings attached. According to the State of Social Safety Net 2018 report, both conditional and unconditional cash transfers are widely used around the world. Out of 142 countries, the report indicates that 70 percent use unconditional cash transfer while 43 percent use conditional cash transfer. Many countries utilise a combination of both.

Nepal is actively employing cash as one of its instruments of social assistance. Unconditional cash transfers include monthly allowance categorically targeted at senior citizens, persons with disabilities, single women and some marginalised indigenous tribes. A child grant worth Rs400 per child per month for up to two children per family is available to all children under five in 14 districts with a low Human Development Index and children under five of Dalit families nationwide. According to the Department of National ID and Vital Registration, which now is under the Ministry of Home Affairs and manages unconditional cash transfers, around 2.5 million people are registered to receive the monthly cash allowance in six categories with total benefits amounting to Rs4.15 billion.

Cash is becoming an important mechanism of response during emergencies if the local markets are functioning. Following the 2015 earthquakes, the Ministry of Federal Affairs and Local Development (now Ministry of Federal Affairs and General Administration) implemented a top-up emergency cash transfer programme in 19 earthquake affected districts with support from the United Nations Children’s Fund (UNICEF) and other partners. The programme, probably the first of its kind in Nepal, used the existing government cash transfer mechanism to reach as many as 430,000 people with an additional Rs3,000 to their regular monthly allowance. The emergency cash intervention proved that cash is a viable disaster response option in Nepal, a country that faces challenges in climate change, floods and droughts, high risk of earthquakes, and degradation of biodiversity amid persistent poverty. The potential of cash to incentivise behaviour change toward natural resource conservation and climate resilience should further be explored.

In addition to unconditional cash transfers, Nepal also employs a variety of social transfers involving cash like scholarships, public works programmes, and maternity incentives. Unlike the unconditional cash transfers, which is managed by a single government agency, these programmes are designed and implemented by related ministries. While these may not represent textbook designs of conditional cash transfer, where periodic payments are monitored for compliance with pre-agreed punitive or facilitative conditions, cash here also is used as an incentive to effect behaviour change.

To condition or not to condition

Conditionality in cash transfer is a much-debated policy. Some question that if cash transfers, being a part of social protection, is a human right enshrined in the Universal Declaration, how can making it conditional be justified. Others take conditions as a right-wing ‘no free-lunch’ strategy to make poor people somehow contribute to social or human capital development. Conditions, as author Cookson has shown, is enforced from a locus of control and power over the poor and vulnerable leading to potential abuses and excesses by frontline managers.

Studies on different models of cash transfer indicate that often cash assistance sans conditions can be as effective in achieving social and economic impacts in aggregate as ones with conditions. This, however, does not mean we should write off CCTs altogether. An empirical study published by the Free University of Berlin in 2017 on the educational outcome of Juntos beneficiary children associates programme participation with higher overall enrolment rates and grades of schooling for children aged 12 to 18 years. Backed by rigorous evidences and technological advances, cash transfers are assuming increasing importance in social welfare and anti-poverty policies. Nepal should continue to experiment with conditional cash transfers, while consolidating and expanding its unconditional grants.

Rajouria holds a PhD in social welfare from the University of Hawaii and is a specialist in social policy and social protection.