What role for safety net transfers in very low income countries?

The authors consider the question of what role safety net transfers should play in very low income countries where a large population live in absolute poverty, and the state has limited resources to fund transfers. The number of people living below minimum acceptable consumption levels will remain so high that some form of safety net intervention is justified. For pure transfers, governments should be selective of very specific groups such as orphans, to limit costs and engender political support. To improve the impact per dollar spent on transfers, programs should be selected to have a multiplier effect on incomes such as vouchers for small fertilizers packs for the poor, or to leverage by using small amounts of cash to help households reduce risk or diversify economic activity. Selection of programs that are self-targeting, such as public works at a low wage rate or subsidized food goods. The judicious timing of transfers is important. Programs should also be kept as simple as possible to fit with the limited administrative capacity, avoiding multiple overlapping donor programs in favor of one or two simple nationwide programs that are easily implemented, cost-effective, and fiscally sustainable.