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Stimulating economic growth in the least developed countries: direct cash transfers for the retired via mobile phones

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  • Roy Mersland
  • Joachim Thøgersen

Abstract

The result of current aid policies is that only a small percentage of foreign aid reaches the poorest of the poor in the least developed countries. Current trends of urbanisation and self-reliance place elderly people in an increasingly difficult situation. This paper aims to stimulate debate by introducing an alternative mechanism for foreign aid. With the help of an economic model, we demonstrate how direct cash transfers to elderly people can spur economic growth. Targeting all elderly people above a certain age minimises selection costs and removes perverse incentives. The use of new mobile phone technologies reduces transaction costs and makes our proposed modality feasible including in the least developed countries with low functioning governments.

Suggested Citation

  • Roy Mersland & Joachim Thøgersen, 2013. "Stimulating economic growth in the least developed countries: direct cash transfers for the retired via mobile phones," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 16(3), pages 259-271, September.
    • Handle: RePEc:taf:jecprf:v:16:y:2013:i:3:p:259-271
    DOI: 10.1080/17487870.2013.799905
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    1. Mark McGillivray & Simon Feeny & Niels Hermes & Robert Lensink, 2006. "Controversies over the impact of development aid: it works; it doesn't; it can, but that depends …," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(7), pages 1031-1050.
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