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The impacts of the Social Cash Transfer Pilot Programme (SCTPP) on the local economy in Ethiopia








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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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    Evaluating local general equilibrium impacts of Zimbabwe’s Harmonized Social Cash Transfer Programme (HSCT) 2014
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    The Harmonized Social Cash Transfer (HSCT) is an unconditional cash transfer introduced in 2011 by the Ministry of Public Service, Labour and Social Welfare (MPSLSW) in order to strengthen the purchasing power of ultra-poor households who are labour constrained through cash transfers. The objectives of the programme include enabling recipient households to increase consumption above the poverty line, reduce the number of ultra-poor households and help beneficiaries avoid risky coping strategies such as child labour and early marriage. Moreover, the programme is expected to lead to improved nutritional status, health and education outcomes, as well as a reduction in violence. As of March 2014, 55 509 households in 20 districts had been enrolled, covering 247 645 individuals. Local economy-wide impact evaluation (LEWIE) simulation methods are used to assess the likely impacts of cash transfers on the local economy. When the Harmonized Social Cash Transfer programme gives money to benefic iary households, they spend it, buying goods and services. As this cash swirls around within wards and districts, it creates benefits for non-recipient households as well who may provide the goods and services purchased by beneficiary households. This study finds that the Zimbabwe HSCT generates a total income multiplier of 1.73 in nominal terms with a confidence interval of 1.42 to 2.00. Each dollar of transfer has the potential to generate 1.73 dollars of total income within the project area.
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    The impact of the Harmonized Social Cash Transfer Programme (HSCT) on the local economy in Zimbabwe 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 Harmonized Social Cash Transfer Programme gives money to beneficiary households, they spend it, buying goods and services. As this cash swirls around within wards and districts, it creates benefits for non-recipient households as well, who may provide the goods and services purchased by beneficiary households. This study finds that the Zimbabwe HS CT generates a total income multiplier of 1.73 in nominal terms with a confidence interval of 1.42 to 2.00. Each dollar of transfer has the potential to generate 1.73 dollars of total income within the project area.

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