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

  • Davies, Simon
  • Davey, James

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/3724/1/MPRA_paper_3724.pdf
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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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  1. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
  2. Elhanan Helpman & David T. Coe, 1993. "International RandD Spillovers," IMF Working Papers 93/84, International Monetary Fund.
  3. 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.
  4. Steele, D B, 1969. "Regional Multipliers in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 21(2), pages 268-92, July.
  5. Beata K. Smarzynska, 2003. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages," William Davidson Institute Working Papers Series 548, William Davidson Institute at the University of Michigan.
  6. Davies, Simon & Easaw, Joshy & Ghoshray, Atanu, 2006. "Mental Accounting and Remittances: A Study of Malawian Households," MPRA Paper 3603, University Library of Munich, Germany.
  7. Harold Brodsky & David E. Sarfaty, 1977. "Measuring the Urban Economic Base in a Developing Country," Land Economics, University of Wisconsin Press, vol. 53(4), pages 445-454.
  8. 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.
  9. 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.
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