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Local Economy-wide Impact Evaluation (LEWIE) of Malawi’s Social Cash Transfer (SCT) Programme








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    Local Economy-wide Impact Evaluation (LEWIE) of Ethiopia’s social cash transfer pilot programme 2014
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    The Ethiopia Social Cash Transfer Pilot Programme (SCTPP) was introduced in 2011 in two woredas of the Tigray region by the regional Government with the support of the United Nations Children’s Fund (UNICEF). The goal of the SCTPP is to “improve the quality of life for vulnerable children, the elderly, and persons with disabilities” in programme households. Although the programme targets the poorest of the poor, the actual benefit to the local economy goes beyond programme beneficiaries. When b eneficiaries spend the cash transfer, they transmit the impact of the programme to others inside and outside the local economy, more often to households not eligible for the cash transfer who tend to own most of the productive assets. The impact of the SCTPP on the local economy was simulated using a LEWIE (Local Economy Wide Impact Evaluation) model applied to the two areas that received the transfer, the tabias of Hintalo-Wajirat and the town of Abi-Adi. The LEWIE model found that each birr d istributed in Hintalo-Wajirat generated an extra 1.52 birr via local market linkages, for a total income multiplier of 2.52. Similarly, each birr distributed in Abi-Adi generated an additional .35 birr, for a total income multiplier of 1.35. Thus the initial transfer of 5.58 million birr in Hintalo-Wajirat and 1.62 million birr in Abi-Adi potentially generated 14.06 million birr and 2.19 million birr respectively. However if credit, capital and other market constraints limit the local supply res ponse, the increase in demand brought about by the cash transfer programme may also lead to increased prices and consequently a lower income multiplier. Simulations incorporating such constraints find a “real” income multiplier of 1.84 birr for Hintalo-Wajirat and 1.26 birr for Abi-Adi. In both cases non-beneficiaries and the local economy as a whole benefit significantly from cash transfer programmes via trade and production linkages. Maximizing the income multiplier may require complementary interventions that target both beneficiary and non-beneficiary families.
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    The impacts of the Social Cash Transfer Pilot Programme (SCTPP) on the local economy in Ethiopia 2014
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    Local economy-wide impact evaluation (LEWIE) simulation methods are used to assess the likely impacts of cash transfers on the local economy. When the Social Cash Transfer Pilot Programme (SCTPP) gives money to beneficiary households, they spend it, buying goods and services. As the cash circulates within wards and districts it also creates benefits for non-recipient households that can provide the goods and services purchased by beneficiary households. This study found that each birr distribut ed by the Tigray SCTPP in Hintalo-Wajirat woreda generated an extra 1.52 birr via local economic linkages, for a total income multiplier of 2.52 birr. Similarly, each birr distributed in Abi-Adi woreda generated an additional 0.35 birr, for a total income multiplier of 1.35 birr.
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    Local Economy-wide Impact Evaluation (LEWIE) of Zambia’s Child Grant Programme 2014
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    The Zambia Child Grant Programme (CGP) provides a bi-monthly cash transfer to households with children under five years of age, with the goal of reducing “extreme poverty and the intergenerational transfer of poverty” in programme households. The CGP provides a significant infusion of cash into Zambia’s rural economy. When beneficiaries spend the cash transfer they transmit the impact to others inside and outside the local economy, more often to households not eligible for the cash transfer who tend to own most of the local businesses. The impact of the CGP on the local economy was simulated using a LEWIE (Local Economy Wide Impact Evaluation) model, focusing on the three districts where the programme is located and included in the CGP impact evaluation. The LEWIE model for the CGP found that the transfers could lead to relatively large income multipliers of ZMK 1.79. That is, every Kwacha transferred to poor households had the potential to raise local income by ZMK 1.79. Eligible hous eholds receive the direct benefit of the transfer, while ineligible households receive the bulk of the indirect benefit. However, if labour, capital and land markets do not function well upward pressure on prices could result. This would raise consumption costs for all households and lead to a real income multiplier that is lower than the nominal multiplier. This real income multiplier could be as low as ZMK 1.34. Complementary programmes that increase the supply response (such as access to cred it to invest in capital) could increase the real-income and production impacts of the programme.

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