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The Cash Transfer Debate

Not a Silver Bullet, but Cash Transfers Can Help Improve Nutrition: Expert

While cash transfers have not delivered on their early promise when it comes to malnutrition, that does not mean they have no role to play, according to Stephen Devereux, the codirector of the Centre for Social Protection.

Written by Andrew Green Published on Read time Approx. 5 minutes
Yemeni women and children gather to receive cash transfers from the United Nations Children’s Fund. MOHAMMED HUWAIS/AFP/Getty Images

With many countries now developing a new generation of social protection programs for nutrition, policymakers are integrating lessons from previous efforts and increasingly using cash transfers as part of a more multisectoral approach, according to a leading researcher in the field.

Stephen Devereux is the codirector of the Centre for Social Protection at the Institute of Development Studies in the United Kingdom, where experts research approaches to various development issues and offer guidance on implementation.

That includes advice on cash transfers, which were once seen as the solution to various development needs. But as Malnutrition Deeply has documented in the first two stories in our series on cash transfers, they have shown little impact in reducing acute malnutrition.

Devereux said that doesn’t mean there is no role for cash transfers within broader efforts to address malnutrition. Speaking to Malnutrition Deeply on the sidelines of the Global Hunger Today conference in Cork, Ireland, Devereux talked about what successful programs that integrate cash transfers might look like.

Malnutrition Deeply: Can you begin by explaining the rise in popularity of cash transfers?

Stephen Devereux: In the early 2000s there was a big debate between the food aid lobby, pushed mostly by USAID and the World Food Program, and the cash transfer lobby, who argued that food aid was damaging to farmers and local trade. So we should move from food aid to cash transfers wherever we could. Cash transfers were proposed as a flexible, nonpaternalistic alternative to food aid, and this was very rapidly seen as the solution.

The perception was, you give poor people a small amount of cash, and you’ll get this amazing amount of different types of impacts. Also, the assumption was you would get much bigger impacts with cash than you would with food. To some extent that is true. But it became an ideological argument, that giving cash is morally better than giving food.

Now we are seeing the results of impact evaluations that are coming out, and cash transfers are not delivering when it comes to stunting. They are not delivering when it comes to wasting. They are not delivering on nutrition outcomes to the degree that people were expecting.

The other part of it is that the understanding of food security and nutrition has also evolved. Until quite recently that distinction wasn’t very clear in people’s heads. It has really become sharply clear in some of these evaluations that have been done on social protection programs. You can have good impacts on food security and not see good impacts on nutrition security.

My argument is that cash transfers only deal with one driver of malnutrition, which is access to food. So you give poor people money, they can buy more food, and they do. Then we see these improvements in food security indicators – like meals per day, spending on food, calorie consumption, dietary diversity. All those indicators can improve.

But we see that malnutrition is stuck at the level it was before the social protection program came in. Food security is largely driven by income constraints and poverty, but nutrition security is driven by other things. Health and sanitation and water supply, things like that.

Malnutrition Deeply: Are you seeing the conversation starting to shift toward more multifaceted policies in response to those results?

Devereux: Definitely. One of the good things that has happened is that the evidence is building from programs or experiments around the world. When you have success stories in terms of reducing malnutrition, it’s almost always cash transfers combined with other interventions that gives you that big impact on malnutrition.

Those lessons, which are in countries like Bangladesh and Brazil, definitely have useful applications for what’s happening in Africa, where in many cases the social protection lobby has become so powerful that it’s almost saying, just give poor people more money and they’ll be OK.

I think we are now realizing that it’s not enough, and if you look at those case studies elsewhere, you can bring those lessons in and hopefully change the debate and get better outcomes.

Malnutrition Deeply: How do you make people aware of the need to go beyond cash transfers?

Devereux: You can have a big influence through training and advisory work. The Centre for Social Protection does a lot of training in social protection. We get policymakers from agencies or governments and we do training courses in Africa and Asia and the U.K. every year. So we are reaching a few hundred policymakers or people with influence on policy. Hopefully they are taking those lessons back and some things might change in terms of policy.

What’s also changing is the social protection policies and strategies that governments have been designing and implementing, with the aid of international consultants. Very often they started out with this very narrow, simple idea that prioritizes giving people cash transfers like child support grants or pensions.

That first generation of policies and strategies is now being replaced by another round, with some countries that had a social protection policy or strategy now updating theirs.

The second generation is much more sophisticated. For example, by recognizing that you need nutrition-sensitive social protection, which means adding linkages to other services. Or by giving people education and advice along with the cash transfer. So they know how to buy the right kinds of food, and hygienic practices like washing hands before cooking and after going to the toilet. These kinds of messages are being bundled together in what’s called “nutrition-sensitive social protection,” which hopefully gets better impacts than the cash transfers alone.

The real challenge is not so much in making the case based on evidence, because that’s pretty clear now. It’s trying to help governments to coordinate their activities, both within the government and with their development partners. The main challenge is really about taking those lessons and applying them in a way that leads to coordinated activity within government, and between governments and donors.

The great success stories have mostly been in Latin America, where it wasn’t about whether cash transfers were going to solve the problems of poverty, vulnerability and food insecurity. It was about asking: What do we need to do to achieve zero hunger? And you bring all the ministries and agencies that you need together, and you focus on the outcome, which is zero hunger. The objective isn’t to give cash transfers to poor people – that’s just one instrument in the policy toolbox.

This is a very important shift in thinking. If you start by thinking about the objective then you can think about what you need to achieve the objective, rather than saying cash transfers is always going to be the solution.

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