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In the ongoing fight against poverty in Southern Africa, there is increasing evidence that social transfers are an excellent way of protecting the poor and vulnerable and improving their lives.

The term 'social transfers' refers to a range of social assistance measures provided to individuals and households who are chronically poor. Types of social transfers range from school feeding schemes to non-contributory pensions, from agricultural inputs to child support grants. Faced with such an array of options, policymakers face the task of choosing the most appropriate social transfer for their specific circumstances. So how do they decide? Decisions should depend on the desired outcomes, the nature of poverty, past experience of what works, and the preferences of the beneficiaries. Decisions will also be based on factors such as how to avoid dependency and how to ensure the transfers are affordable and politically sustainable.

The choice of which type of social transfer to adopt depends on its effectiveness in achieving the specific objective that a government has in mind. For example, food benefits may be effective in helping reduce poverty, but are less effective in reducing inequality or promoting economic growth. Provision of agricultural inputs can be very helpful to those who have access to lands and labour, but do not provide immediate benefit to those who are hungry. Overall, cash-based transfers are considered to be the most flexible and the best in terms of achieving multiple outcomes of social transfers. But, even then, it can be difficult to decide whether a pension scheme that transfers cash to the elderly is preferable to a child support grant to children under the age of five or a basic income grant to female-headed households.

There are a number of different causes of poverty, and different kinds of vulnerability, which affect different groups of people in different ways. Social transfers therefore need to be tailored to deal with the specific situation. Individuals who are unable to work (like the chronically ill, the disabled or the aged) might need income grants or pensions to support them indefinitely. On the other hand, people who lack access to key productive assets might benefit more from transfers in the form of, for example, fertiliser, tools, and livestock. A lack of purchasing power can be dealt with in various ways, including food stamps or, again, income grants.

Each country in southern Africa has some experience in implementing social transfers, whether it be small-scale pilot schemes or more comprehensive programmes funded from national budgets. New or expanded transfer programmes should build on what is already working. For example, an old age pension scheme could be rapidly expanded by lowering the eligibility age so that more households benefit from it. Similarly, the delivery system for an old age pension could be used to provide welfare grants to orphans and vulnerable children (OVC), many of whom are cared for by the elderly.

Beneficiary preferences are also an important consideration. Instead of guessing or assuming what people want, policymakers could ask people what they prefer, and give them what they ask for. Of course, what people ask for might be very difficult to provide: poor people in rural Ethiopia and Malawi have requested food in the hungry season, agricultural inputs at planting time and cash after harvest. Women often request social transfers in the form of food, whereas men tend to prefer cash. People in isolated areas tend to prefer food so as to save the time and money it takes to get to markets, while urban dwellers favour cash as it gives them a wider choice.

All too often, the type of social transfer benefit is determined by what is available, rather than by what is needed. Food aid has been delivered to Africa for decades, not necessarily because it was most appropriate, but because food was readily available (often in the form of surpluses from, for example, the United States) whereas cash was not. For the first time, donors are starting to make cash available for social transfer programmes in Africa, thanks to evidence that decades of food aid have failed to reduce vulnerability, food insecurity and malnutrition.

The design of social transfer programmes should be based on a careful assessment of needs and on consultation with programme beneficiaries. Based on this consultation process, cash might be chosen as the resource transferred in some circumstances, food in others, and inputs or productive assets in others. Social transfer programmes should be driven by needs, not resources, and by beneficiaries, rather than donors.

This piece was based on the policy brief entitled "Choosing the best social transfer", which forms part of a series of 10 policy briefs providing an overview of the issues and arguments in the current debate on the role of social transfers as a means of reducing chronic hunger and poverty in southern Africa.