Large cash transfers are better than direct aid interventions, suggests study on USAID programme

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A new comparative study on various approaches to providing aid, conducted in Rwanda over a program to improve child and maternal health, suggests that providing large cash assistance seem to work better than other approaches.

The researchers at the Innovations for Poverty Action (IPA) compared outcomes under the USAID’s integrated nutrition and WASH program (a project to improve water, sanitation and hygiene — WaSH) named Gikuriro, conducted in 74 villages over a year, with unconditional cash transfers.

The cash transfers were done in two ways for families in 100 villages. One, some families were given the equivalent amount of cash — up to $117 –that GiveDirectly, the implementing NGO, would have spent on them under Gikuriro. Two, some families were given a ‘large’ GiveDirectly transfer, of $532.

The study found that neither Gikuriro nor the cost-equivalent cash transfer had an impact on any of the primary outcomes such as child growth, household dietary diversity, maternal or child anaemia, household consumption, or wealth, with a year, the duration of the study.

But the larger cash transfer showed outcomes such as improved consumption, dietary diversity, height-for-age, child mortality, savings, assets and house values.

But several experts say the study doesn’t mean that cash is always better.

“We have evidence here that large cash transfers can move child health outcomes, but the study does not speak to what Gikuriro would have achieved if it had spent this larger amount of money,” said Economists Craig McIntosh and Andrew Zeitlin in World Bank blog.

“So, we think the conclusion from our results should not be as simple as ‘cash won”

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