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A regional multiplier approach to estimating the impact of cash transfers: The case of cash aid in rural Malawi

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Author Info
Davies, Simon
Davey, James

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Abstract

This paper analyses the impact on the local economy of an emergency cash transfer programme in rural Malawi. The results are of interest given the growing use of cash transfers as development aid as well as the increasing popularity of such transfers as a form of social protection across Sub-Saharan Africa. Using a form of social accounting matrix, we find that there are widespread benefits for regional economy as a whole (with multiplier estimates of 2.02 to 2.45) and for certain groups in particular. Small farmers and small businesses gain particular advantage as this is where poorer households’ purchases are focused; education and health also benefit. Such payments can also help to support the regional economy during the most “lean” periods of the year.

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File URL: http://mpra.ub.uni-muenchen.de/3724/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3724.

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Date of creation: Jun 2007
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Handle: RePEc:pra:mprapa:3724

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Related research
Keywords: Rural Economic Development Cash Transfers Income Multiplier Poverty Malawi Africa

Find related papers by JEL classification:
D19 - Microeconomics - - Household Behavior - - - Other
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
O22 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Davies, Simon & Easaw, Joshy & Ghoshray, Atanu, 2006. "Mental Accounting and Remittances: A Study of Malawian Households," MPRA Paper 3603, University Library of Munich, Germany, revised Oct 2007. [Downloadable!]
  2. Coe, David T & Helpman, Elhanan, 1993. "International R&D Spillovers," CEPR Discussion Papers 840, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Greig, Michael A, 1971. "Regional Multiplier Effects in the U.K.: A Comment," Oxford Economic Papers, Oxford University Press, vol. 23(2), pages 277-84, July. [Downloadable!] (restricted)
  4. Armando Barrientos & Jocelyn DeJong, 2006. "Reducing Child Poverty with Cash Transfers: A Sure Thing?," Development Policy Review, Overseas Development Institute, vol. 24(5), pages 537-552, 09. [Downloadable!] (restricted)
  5. Steele, D B, 1969. "Regional Multipliers in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 21(2), pages 268-92, July. [Downloadable!] (restricted)
  6. Giles, Brynley D & Jennings, Anthony, 1982. "Project Appraisal and the Multiplier: The Case of the Viphya Pulp Mill Project in Malawi," Oxford Economic Papers, Oxford University Press, vol. 34(2), pages 390-402, July. [Downloadable!] (restricted)
  7. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June. [Downloadable!]
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