• Cash transfer programmes in Kenya, Malawi and Zambia reach only 1-4% of the poor
• Targeting is determined largely by donor preferences, and is restrictive, resulting in large exclusion errors
• Given low national funding commitments, existing cash transfer programmes can only be scaled up nationally with donor support equivalent to 1-2% of GDP
• The targeting of cash transfers can increase their impact on poverty, but can be limited by the lack of resources and capacity in low-income countries
• Targeting vulnerable groups is often simpler, more politically acceptable and less socially divisive than means testing
• Good targeting requires an assessment of the distribution of poverty, targeting costs and political acceptability
• Lump sum transfers work better in post-emergency than development contexts, as long as markets remain functional
• Lump sums can work in development contexts, when complemented by small, regular transfers and advisory services
• Prospects for successful investment decrease when the size of the transfer is many times larger than annual income
• One key challenge in post-conflict countries is meeting objectives that contribute both to poverty reduction and the peace process
• Cash transfers can address the immediate needs of poor households but there is little evidence about their long-term impact on poverty in post-conflict countries
• The dissemination of emerging evidence on best practice in the delivery of cash transfers in conflict-affected countries should be encouraged
• There is an imperative among donors and governments to demonstrate that cash transfers help households graduate from poverty and contribute to growth
• There is a contradiction between providing cash transfers to those who are unable to work, and the simultaneous expectation of graduation
• Cash transfers require complementary interventions if they are to result in graduation and stimulate growth
The provision of cash transfers to alleviate poverty may not be a policy priority for low-income countries, despite donor enthusiasm to promote such interventions as a cost effective social protection mechanism. This Project Briefing looks at cash transfers and political economy issues, drawing on case studies from Kenya, Malawi and Zambia, low-income countries which have started to implement cash transfer programmes in recent years.