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The Cash Transfer Debate

New Research Shows Cash Transfers Have Limited Impact on Malnutrition

It is clear that cash transfers alone will not end acute or chronic malnutrition, leaving researchers to examine how they can be effectively integrated as part of a larger response.

Written by Andrew Green Published on Read time Approx. 4 minutes
A participant in a cash transfer program in rural Malawi receives her monthly payment. Anthony Asael/Art in All of Us

Cash transfer programs – giving money directly as a form of aid – are everywhere.

In Jordan, Lebanon and elsewhere, they have replaced some of the emergency programs that would normally provide assistance to the Syrian refugees living there. In Kenya, they were at the heart of a longer-term effort to improve outcomes for some of the country’s most vulnerable people. Unconditional cash transfer programs are now present in at least 130 countries, according to a count by the Overseas Development Institute.

With both humanitarian and development projects increasingly turning to cash transfers over the past decade, it was natural the nutrition community would wonder what impact the programs could have on reducing acute and chronic undernutrition.

“It was something relatively new in the developing world,” said Freddy Houngbe, the manager of Moderate Acute Malnutrition Out (MAM’Out), a cash-transfer research project in eastern Burkina Faso. “In the past, it was a food-based approach that was used in those areas. We were looking for evidence to see whether this approach could help reduce or prevent wasting.”

The researchers behind MAM’Out weren’t the only ones asking questions about the potential of cash transfer programs to supplement or supplant standard malnutrition responses. Over the past several years, there have been a wave of studies emerging from the Philippines to Niger considering the impact of a variety of cash transfer programs. The results have been mixed.

The lesson that seems to be emerging, according to experts, is that cash transfers alone are not going to solve the problem of malnutrition. What has people concerned, though, is that in some instances they might actually make the situation worse.

Better Outcomes

Cash transfer programs come in a variety of forms. Some, like MAM’Out, are unconditional – small amounts distributed by hand or through mobile transfers at regular intervals to people who meet the selection criteria. Others offer payments that are contingent on participants meeting some criteria, anything from attending training sessions to requiring pregnant women to make regular prenatal visits.

At their core, though, the idea is the same: Rather than a proscribed approach, cash gives participants the opportunity to set their own priorities and, hopefully, emerge with better outcomes.

Within the nutrition community, there was some speculation that cash transfers might be able to overcome the restrictions of more traditional assistance programs. The Research on Food Assistance for Nutritional Impact (REFANI), a consortium of nutrition-focused nongovernmental organizations and university programs, laid out some of those hurdles: Food-based interventions can suffer from supply problems or provide products that are unacceptable to the people they are supposed to be assisting. They are also expensive.

In contrast, cash transfers give people the option to buy what they want, and there is evidence that the programs may be more cost-efficient than traditional food-assistance interventions. There was enough potential there to convince the World Food Program, which announced in 2014 that 30 percent of their food-assistance programming involves cash transfers.

That is not to say that the nutrition community expected cash transfers to be a panacea. The REFANI team was quick to point out that there was “limited and inconsistent evidence on the impact” of cash transfers on nutrition. Now a decidedly mixed bag of evidence has started to emerge.

In Niger, an emergency cash transfer program appears to have reduced the risk of acute malnutrition for children in the midst of a food crisis, according to brand new research in the Journal of Global Health.

But the MAM’Out trial in rural Burkina Faso found cash transfers did not prevent child undernutrition. Houngbe told News Deeply he suspects that is because the project did not address the other causes beyond financial insecurity that drive malnutrition, including access to water and birth spacing. And in Pakistan’s Sindh province a REFANI trial found a significant decrease in the risk of a child suffering from wasting, but only within a cohort that received a double cash transfer. There was no significant reduction in the risk of wasting for children whose families received the standard transfer.

In light of those results, Sophie Whitney, a global nutrition expert with the European Commission’s Directorate General for European Civil Protection and Humanitarian Aid Operations told News Deeply, “I don’t think we are in a position now where we can label this kind of project as malnutrition prevention.”

Whitney said the results don’t mean cash transfers have no role to play in addressing acute malnutrition, but “dumping tons of food or cash and focusing solely on people’s access to food will not be enough to trigger an impact on prevention.” What both she and Houngbe suggested is that cash transfers are not a solution by themselves, but need to be part of a holistic approach to addressing all of the factors contributing to malnutrition, including poor health and water and sanitation systems.

“If we really want to get an impact, we may need to deliver several services, several interventions at the same time,” Houngbe said.

Unanticipated Consequences

The results of cash transfer programs targeted at improving chronic malnutrition have been similarly mixed.

Among the most striking results, research from the Philippines found a conditional cash transfer program aimed at the poorest communities produced a significant reduction in severe stunting.

These results are tempered, though, by new World Bank findings, also from the Philippines, that consider the ramifications cash transfer programs may have on the nutritional status of people who are not selected to participate.

“No one had looked at welfare outcomes of non-beneficiaries,” Dr. Eeshani Kandpal, an author on both Philippine studies, told News Deeply. “Prices are one step, but what happens when people face higher prices?”

What the researchers found was an 11 percent increase in stunting rates among non-beneficiary children. Kandpal said it is likely tied to the increase in the price of perishable, protein-rich foods, like eggs. Families who were not receiving the cash transfer were unable to keep up with the rising costs, limiting a key source of protein for young children.

She cautioned that price fluctuations are likely limited to perishable goods in poor, remote communities where it is difficult to quickly increase the supply flow. But, at the very least, it is a potential consequence for policymakers to take into account as they construct cash transfer programs.

It also underscored, researchers said, how much is still unknown about the impact cash transfers can have on nutrition.

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