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Local Economy-wide Impact Evaluation (LEWIE) of Ethiopia’s social cash transfer pilot programme







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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 Malawi’s Social Cash Transfer (SCT) Programme 2015
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    The Government of Malawi’s (GoM’s) Social Cash Transfer (SCT) Program is an unconditional cash transfer program targeted to ultra-poor, labor constrained households. The objectives of the programme include reducing poverty and hunger in vulnerable households and increasing school enrolment. The program began as a pilot in Mchinji district in 2006. Since 2009, the program has expanded to reach an additional eight districts (Chitipa, Likoma, Machinga, Mangochi, Phalombe, Salima, Thyolo and Balaka) out of 28 total districts in Malawi. The program has gone to full scale in Mchinji, Chitipa and Likoma and by 2012, had reached nearly 30,000 households and approximately 103 000 individuals. The SCT provides a significant infusion of cash into Malawi’s rural economy. When beneficiaries spend the cash transfer, they transmit the impact to others inside and outside the local economy, creating benefits for non-recipient households as well, who often provide the goods and services purchased by be neficiary households. The impact on the local economy was simulated using a LEWIE (Local Economy Wide Impact Evaluation) model. This study finds that the Malawi SCT generates a total income multiplier of 1.25 in nominal terms. Each Mk of transfer generates an additional Mk 0.25 of total income gain within the programme area. That is, each Mk of transfer generates an additional Mk 0.25 of total income gain within the project area. In addition, it creates a gain of Mk 0.68 for trading centres d irectly, because households spend a large share of their incomes there, and indirectly, because retail, service and other production activities taking place in the Village Cluster buy a large share of their inputs there. The SCT programme has significant production impacts. The transfers stimulate the production of crops by Mk 0.31 and livestock by Mk 0.14 per Mk transferred. The largest effect is on the retail sector, where sales increase by Mk 0.60 per Mk transferred to eligible households. M ost of this extra income accrues to non-beneficiary households, who are better off and tend to own more of the local businesses.
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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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