Cash transfers in an epidemic context : the interaction of formal and informal support in rural Malawi
AbstractThis paper investigates the short-run consumption expenditure dynamics and the interaction of public and private arrangements of ultra-poor and labor-constrained households in Malawi using an original dataset from the Mchinjii social cash transfer pilot project (one of the first experiments of social protection policies based on unconditional cash transfers in Sub-Saharan Africa). The authors exploit the unique source of exogenous variation provided by the randomized component of the program in order to isolate the effect of cash transfers on consumption expenditures as well as the net crowding out effect of cash transfers on private arrangements. They find a statistically significant reduction effect on the level of consumption expenditures for those households receiving cash transfers, thus leading to the rejection of the perfect risk sharing hypothesis. Moreover, by looking at the effects of cash transfers on private arrangements in a context characterized by imperfect enforceability of contracts and by a social fabric heavily compromised by high HIV/AIDS rates, the analysis confirms the presence of crowding out effects on private arrangements when looking at gifts and (to a lesser extent) remittances, while informal loans seem to be completely independent from the cash transfer's reception. From a policy perspective, the paper offers a contribution to the evaluation of the very recent wave of social protection policies based on (unconditional) cash transfers in Sub-Saharan Africa, suggesting that there might be an important role for public interventions aimed at helping households to pool risk more effectively.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5824.
Date of creation: 01 Oct 2011
Date of revision:
Safety Nets and Transfers; Rural Poverty Reduction; Labor Policies; Services&Transfers to Poor; Debt Markets;
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-10-15 (Africa)
- NEP-ALL-2011-10-15 (All new papers)
- NEP-DEV-2011-10-15 (Development)
- NEP-MFD-2011-10-15 (Microfinance)
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.:
- Thomas, Jonathan & Worrall, Tim, 1988. "Self-enforcing Wage Contracts," Review of Economic Studies, Wiley Blackwell, vol. 55(4), pages 541-54, October.
- Dubois, P. & Jullien, B. & Magnac, T., 2006.
"Formal and informal risk sharing in LDCs : theory and empirical evidence,"
Economics Working Paper Archive (Toulouse)
200608, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
- Pierre Dubois & Bruno Jullien & Thierry Magnac, 2008. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," Econometrica, Econometric Society, vol. 76(4), pages 679-725, 07.
- Dubois, Pierre & Jullien, Bruno & Magnac, Thierry, 2008. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," CEPR Discussion Papers 6661, C.E.P.R. Discussion Papers.
- Dubois, Pierre & Jullien, Bruno & Magnac, Thierry, 2007. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," IZA Discussion Papers 2842, Institute for the Study of Labor (IZA).
- Pierre Dubois & Bruno Jullien & Thierry Magnac, 2008. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," CESifo Working Paper Series 2184, CESifo Group Munich.
- Dubois, Pierre & Jullien, Bruno & Magnac, Thierry, 2007. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," CEPR Discussion Papers 6060, C.E.P.R. Discussion Papers.
- Dubois, Pierre & Jullien, Bruno & Magnac, Thierry, 2005. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," IDEI Working Papers 351, Institut d'Économie Industrielle (IDEI), Toulouse, revised Dec 2007.
- Pramila Krishnan & Stefan Dercon, 1997.
"In sickness and in health ... risk-sharing within households in rural Ethiopia,"
CSAE Working Paper Series
1997-12, Centre for the Study of African Economies, University of Oxford.
- Stefan Dercon & Pramila Krishnan, 2000. "In Sickness and in Health: Risk Sharing within Households in Rural Ethiopia," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 688-727, August.
- Stefan Dercon & Pramila Krishnan, 1997. "In sickness and in health... risk-sharing within households in rural Ethiopia," Economics Series Working Papers WPS/1997-12, University of Oxford, Department of Economics.
- Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 53(2), pages 391-422, August.
- Donald Cox & Zekeriya Eser & Emmanuel Jimenez, 1996.
"Motives for Private Transfers over the Life Cycle: An Analytical Framework and Evidence for Peru,"
Boston College Working Papers in Economics
327., Boston College Department of Economics.
- Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 57-80, February.
- Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 495-526, July.
- Pedro Albarran & Orazio P. Attanasio, 2003. "Limited Commitment and Crowding out of Private Transfers: Evidence from a Randomised Experiment," Economic Journal, Royal Economic Society, vol. 113(486), pages C77-C85, March.
- Dercon, Stefan & Krishnan, Pramila, 2002.
"Risk Sharing and Public Transfers,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Albarran, Pedro & Attanasio, Orazio P., 2002. "Do Public Transfers Crowd Out Private Transfers? Evidence from a Randomized Experiment in Mexico," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.