IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/28818.html
   My bibliography  Save this paper

Disbursing Emergency Relief through Utilities: Evidence from Ghana

Author

Listed:
  • Susanna B. Berkouwer
  • Pierre E. Biscaye
  • Steven L. Puller
  • Catherine Wolfram

Abstract

Government transfer programs to distribute food, water, or electricity at low or no cost have been widespread during the COVID-19 global health crisis. How does program design affect the efficiency and distributional implications of these policies? And what design features determine their political popularity? We study these questions in the context of a program to distribute relief through the electric utility in Accra, Ghana, using data from 1,200 households surveyed during the COVID-19 crisis. We find that distributing relief through electricity transfers has significant advantages. It enables an immediate government response to the crisis because it leverages the existing financial infrastructure between the government utility and households. Moreover, theoretical efficiency concerns about in-kind transfers are mitigated because the transfers are inframarginal for most households and electricity credit can be stored, with many even preferring electricity transfers over cash. These advantages do not preclude delays in transfer receipt and the exclusion of some eligible households, and the program is regressive in both design and implementation. The households least likely to receive relief are those who use less electricity, pay a landlord or other intermediary for electricity, or share an electricity meter with other users – all common among low-income electricity consumers in urban settings. Finally, transfer receipt increases support for the governing party, but support for the program drops significantly if even a fraction of its costs are to be recovered through future electricity tariff increases. Concerns around disbursing relief through utility transfers in this context thus arise not from efficiency loss, but from regressivity, distributional challenges, and politicization.

Suggested Citation

  • Susanna B. Berkouwer & Pierre E. Biscaye & Steven L. Puller & Catherine Wolfram, 2021. "Disbursing Emergency Relief through Utilities: Evidence from Ghana," NBER Working Papers 28818, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:28818
    Note: DEV EEE PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w28818.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephen Younger, 2016. "The Impact of Reforming Energy Subsidies, Cash Transfers, and Taxes on Inequality and Poverty in Ghana and Tanzania," Commitment to Equity (CEQ) Working Paper Series 55, Tulane University, Department of Economics.
    2. Bruce, Neil & Waldman, Michael, 1991. "Transfers in Kind: Why They Can Be Efficient and Nonpaternalistic," American Economic Review, American Economic Association, vol. 81(5), pages 1345-1351, December.
    3. Briggs, Ryan C., 2021. "Power to which people? Explaining how electrification targets voters across party rotations in Ghana," World Development, Elsevier, vol. 141(C).
    4. Hidrobo, Melissa & Hoddinott, John & Peterman, Amber & Margolies, Amy & Moreira, Vanessa, 2014. "Cash, food, or vouchers? Evidence from a randomized experiment in northern Ecuador," Journal of Development Economics, Elsevier, vol. 107(C), pages 144-156.
    5. Mr. David Coady & Ian W.H. Parry & Louis Sears & Baoping Shang, 2015. "How Large Are Global Energy Subsidies?," IMF Working Papers 2015/105, International Monetary Fund.
    6. Jesse M. Cunha, 2014. "Testing Paternalism: Cash versus In-Kind Transfers," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 195-230, April.
    7. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    8. Stephen Younger, 2016. "The Impact of Reforming Energy Subsidies, Cash Transfers, and Taxes on Inequality and Poverty in Ghana and Tanzania," Commitment to Equity (CEQ) Working Paper Series 1355, Tulane University, Department of Economics.
    9. Whittington, Dale & Briscoe, John & Mu, Xinming & Barron, William, 1990. "Estimating the Willingness to Pay for Water Services in Developing Countries: A Case Study of the Use of Contingent Valuation Surveys in Southern Haiti," Economic Development and Cultural Change, University of Chicago Press, vol. 38(2), pages 293-311, January.
    10. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 703-745.
    11. Severin Borenstein, 2012. "The Redistributional Impact of Nonlinear Electricity Pricing," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 56-90, August.
    12. Casey, Katherine, 2015. "Crossing Party Lines: The Effects of Information on Redistributive Politics," Research Papers 3299, Stanford University, Graduate School of Business.
    13. Khera, Reetika, 2014. "Cash vs. in-kind transfers: Indian data meets theory," Food Policy, Elsevier, vol. 46(C), pages 116-128.
    14. Basurto, Maria Pia & Dupas, Pascaline & Robinson, Jonathan, 2020. "Decentralization and efficiency of subsidy targeting: Evidence from chiefs in rural Malawi," Journal of Public Economics, Elsevier, vol. 185(C).
    15. Herman M. Southworth, 1945. "The Economics of Public Measures to Subsidize Food Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(1), pages 38-66.
    16. Sudhanshu Handa & Silvio Daidone & Amber Peterman & Benjamin Davis & Audrey Pereira & Tia Palermo & Jennifer Yablonski, 2018. "Myth-Busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa," The World Bank Research Observer, World Bank Group, vol. 33(2), pages 259-298.
    17. Dennis Egger & Johannes Haushofer & Edward Miguel & Paul Niehaus & Michael Walker, 2022. "General Equilibrium Effects of Cash Transfers: Experimental Evidence From Kenya," Econometrica, Econometric Society, vol. 90(6), pages 2603-2643, November.
    18. Strand, Jon, 2013. "Political economy aspects of fuel subsidies : a conceptual framework," Policy Research Working Paper Series 6392, The World Bank.
    19. Kristin Komives & Vivien Foster & Jonathan Halpern & Quentin Wodon, 2005. "Water, Electricity, and the Poor : Who Benefits from Utility Subsidies?," World Bank Publications - Books, The World Bank Group, number 6361, December.
    20. Katherine Casey, 2015. "Crossing Party Lines: The Effects of Information on Redistributive Politics," American Economic Review, American Economic Association, vol. 105(8), pages 2410-2448, August.
    21. Deutschmann, Joshua W. & Postepska, Agnieszka & Sarr, Leopold, 2021. "Measuring willingness to pay for reliable electricity: Evidence from Senegal," World Development, Elsevier, vol. 138(C).
    22. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.
    23. Sievert, Maximiliane & Steinbuks, Jevgenijs, 2020. "Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa," World Development, Elsevier, vol. 128(C).
    24. Lucie Gadenne & Samuel Norris & Monica Singhal & Sandip Sukhtankar, 2021. "In-Kind Transfers as Insurance," NBER Working Papers 28507, National Bureau of Economic Research, Inc.
    25. Ugo Gentilini, 2016. "The Other Side of the Coin," World Bank Publications - Books, The World Bank Group, number 24593, December.
    26. Abdullah, Sabah & Jeanty, P. Wilner, 2011. "Willingness to pay for renewable energy: Evidence from a contingent valuation survey in Kenya," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2974-2983, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marx, Paul & Eichhorst, Werner & Rinne, Ulf & Brunner, Johannes, 2022. "Income Support for Non-covered Workers during COVID-19: A Review of Policy Responses," IZA Policy Papers 189, Institute of Labor Economics (IZA).
    2. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    3. Kibrom A Abay & Nishant Yonzan & Sikandra Kurdi & Kibrom Tafere, 2023. "Revisiting Poverty Trends and the Role of Social Protection Systems in Africa during the COVID-19 Pandemic," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 32(Supplemen), pages 44-68.
    4. Abay,Kibrom A. & Yonzan,Nishant & Kurdi,Sikandra Smith & Hirfrfot,Kibrom Tafere, 2022. "Revisiting Poverty Trends and the Role of Social Protection Systems in Africa during theCOVID-19 Pandemic," Policy Research Working Paper Series 10172, The World Bank.
    5. Berkouwer, Susanna & Biscaye, Pierre & Hsu, Eric & Kim, Oliver & Lee, Kenneth & Miguel, Edward & Wolfram, Catherine, 2023. "Money or Power? Choosing Covid-19 aid in Kenya," Energy Economics, Elsevier, vol. 127(PB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berkouwer, Susanna & Biscaye, Pierre & Hsu, Eric & Kim, Oliver & Lee, Kenneth & Miguel, Edward & Wolfram, Catherine, 2023. "Money or Power? Choosing Covid-19 aid in Kenya," Energy Economics, Elsevier, vol. 127(PB).
    2. Susanna B. Berkouwer & Pierre E. Biscaye & Eric Hsu & Oliver W. Kim & Kenneth Lee & Edward Miguel & Catherine Wolfram, 2021. "Money or Power? Financial Infrastructure and Optimal Policy," NBER Working Papers 29086, National Bureau of Economic Research, Inc.
    3. Abhijit Banerjee & Rema Hanna & Benjamin A Olken & Elan Satriawan & Sudarno Sumarto, "undated". "Food vs. Food Stamps: Evidence from an At-Scale Experiment in Indonesia," Working Papers 2373, Publications Department.
    4. World Bank Group, 2016. "Cash Transfers in Humanitarian Contexts," World Bank Publications - Reports 24699, The World Bank Group.
    5. Gentilini,Ugo, 2016. "The revival of the"cash versus food"debate : new evidence for an old quandary ?," Policy Research Working Paper Series 7584, The World Bank.
    6. Aker,Jenny C., 2015. "Comparing cash and voucher transfers in a humanitarian context : evidence from the Democratic Republic of Congo," Policy Research Working Paper Series 7469, The World Bank.
    7. Hirvonen, Kalle & Hoddinott, John F., 2018. "Payment modality preferences: Evidence from Ethiopia’s Productive Safety Net Programme," ESSP working papers 125, International Food Policy Research Institute (IFPRI).
    8. Lehmann, M. Christian & Matarazzo, Hellen, 2019. "Voters’ response to in-kind transfers: Quasi-experimental evidence from prescription drug cost-sharing in Brazil," Economics Letters, Elsevier, vol. 184(C).
    9. Tagliati, Federico, 2022. "Welfare effects of an in-kind transfer program: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 154(C).
    10. Dorosh, Paul A. & Thurlow, James & Pradesha, Angga & Raihan, Selim, 2020. "Evaluating Food Policy Options in Bangladesh: Economywide Analysis Under Uncertainty," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304635, Agricultural and Applied Economics Association.
    11. Rafiei, Rezvan & Huang, Kai & Verma, Manish, 2022. "Cash versus in-kind transfer programs in humanitarian operations: An optimization program and a case study," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    12. Christian P R Schmid & Nicolas Schreiner & Alois Stutzer, 2022. "Transfer Payment Systems and Financial Distress: Insights from Health Insurance Premium Subsidies," Journal of the European Economic Association, European Economic Association, vol. 20(5), pages 1829-1858.
    13. Donati, Dante, 2023. "Mobile Internet access and political outcomes: Evidence from South Africa," Journal of Development Economics, Elsevier, vol. 162(C).
    14. Gilligan, Daniel & Hidrobo, Melissa & Hoddinott, John & Roy, Shalini & Schwab, Benjamin, 2014. "Much ado about modalities: Multicountry experiments on the effects of cash and food transfers on consumption patterns," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 171159, Agricultural and Applied Economics Association.
    15. Deutschmann, Joshua W. & Postepska, Agnieszka & Sarr, Leopold, 2021. "Measuring willingness to pay for reliable electricity: Evidence from Senegal," World Development, Elsevier, vol. 138(C).
    16. Griffith, Rachel & von Hinke, Stephanie & Smith, Sarah, 2018. "Getting a healthy start: The effectiveness of targeted benefits for improving dietary choices," Journal of Health Economics, Elsevier, vol. 58(C), pages 176-187.
    17. Grácio, Matilde & Vicente, Pedro C., 2021. "Information, get-out-the-vote messages, and peer influence: Causal effects on political behavior in Mozambique," Journal of Development Economics, Elsevier, vol. 151(C).
    18. Upton, Joanna B., 2014. "Resolving the Puzzle of the Conditional Superiority of In-kind versus Cash Food Assistance: Evidence from Niger," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172942, Agricultural and Applied Economics Association.
    19. Siu, Jade & Sterck, Olivier & Rodgers, Cory, 2023. "The freedom to choose: Theory and quasi-experimental evidence on cash transfer restrictions," Journal of Development Economics, Elsevier, vol. 161(C).
    20. Hirvonen,Kalle Valtteri & Hoddinott,John, 2020. "Beneficiary Views on Cash and In-Kind Payments : Evidence from Ethiopia's Productive Safety," Policy Research Working Paper Series 9125, The World Bank.

    More about this item

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:28818. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.