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Posts Tagged ‘sponsorship’

This is a cross post from Tessie San Martin, CEO of Plan International USA. It was originally posted on the Plan USA blog, titled Old Roads to New Directions. We’ll have Tessie, Chris Blattman and Paul Niehaus from Give Directly joining us in NYC for our November Technology Salon on Cash Transfers. More info on that soon!
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There has been a lot of chatter in the mainstream media about unconditional cash transfers (UCTs) lately. See, for example, recent pieces in The New York Times and The Atlantic; and a much discussed segment in NPR. Most media pieces also mentioned an organization called GiveDirectly that does just this. The idea, touted as an important innovation in development, is simplicity itself: give cash directly to poor people who need it, without strings.

GiveDirectly leverages the low costs of mobile money to deliver cash transfers to poor households in select African countries. Initial results are encouraging. The money is not being spent on “sin goods”. On the contrary, it is being – for the most part – directed into productive investment that helps these poor families get ahead.

It is worth noting differences between UCTs and CCTs (conditional cash transfers). CCT programs provide cash payments to poor households, but they impose conditions on recipients before they get the money, mostly related to children’s health care and education (e.g. enroll the kids in school). UCTs put no such conditions. This is why there is such enthusiasm about UCTs. “No conditions” means such programs tend to be cheaper to administer. At least that is the theory. Note that UCTs and CCTs are similar in that neither has any conditions on how the money (once obtained) is spent.

This posting is focused on UCTs because of the current buzz around them. Although they are showing impressive results, let’s be realistic about the potential and limitations of UCTs. There is a lot that we do not know about the conditions under which UCT schemes lead to sustainable poverty reduction. Nor are we clear about how such programs can be scaled effectively. To the credit of organizations like GiveDirectly, they have partnered with Innovations for Poverty Action to carefully evaluate the results of their actions through rigorous randomized control trials.

It is worth noting that GiveDirectly is doing more than just sending cash to the poor; they are also spending resources carefully identifying, evaluating and selecting beneficiaries, and on monitoring and evaluation. This leads me to one of three points I think are worth making about UCTs.

First, the idea behind UCTs may be simple, but the more successful UCT schemes are complex. The “U” in UCTs does not mean that all you are doing is giving poor people money and stepping back. Research done by ODI and funded by the UK’s Department for International Development (DfID) suggests that UCTs work best when accompanied by information, education and communication efforts, careful targeting and selection of participants, and constant feedback and interaction. In other words, you need to consider who will be selected, what complementary efforts/services will enable and facilitate a good response, and you need to constantly invest in citizen feedback channels that allow you to learn and adapt as better information about program impact comes in. This is not much different than what a good INGO needs to do in order to deliver effective programming (UCT or not).

Second, the media coverage ignores how much variation exists among UCTs schemes. As the World Bank’s Berk Ozler has highlighted, there is a world of difference between “waking up one morning and finding $500 in your M-PESA account” (GiveDirectly) and the interventions being carried out in Liberia for unemployed youth, or what the DfID-funded ODI studies describe. Again, it is too early to tell what kinds of effects on poverty reduction we can expect from such schemes and we are miles away from understanding how scheme design details are related to sustainable paths out of poverty.

This leads me to a third set of questions: for whom are UCTs working? How do program results compare in urban vs. rural areas, for different income levels? We have years of data on CCTs, particularly a lot of data from Mexico, Brazil and other middle income countries where these programs have been scaled up nationally. Yes CCTs have problems (what development and social safety net programs do not?). But there is plenty of research demonstrating the conditions under which CCTs work. UCTs are much less well studied.

But the importance of these innovations, as Chris Blattman has already said, is that it forces (or should force) development organizations and donors to think about “top and bottom lines.” In other words, is what we are doing working? And even if it is working, at what cost? More importantly, we should always ask: are there other options for delivering the same (or similar) results more cost effectively?

As the CEO of a child sponsorship organization, I am drawn to the idea of UCTs. In fact, our initial child sponsorship efforts decades ago bear important similarities to today’s UCT programs. But Plan (like most other child sponsorship organizations) stepped away from such direct transfers, as concerns with sustainability and dependency grew. It is perhaps time to take a new look at the evidence around cash transfers, invest in reviewing results of past sponsorship programs and the lessons learned from that experience that may be applicable to a new generation of UCTs.

In the private sector, publicly quoted companies live and die by the share price, and the pressure to innovate and stay ahead is always present. For public charities like Plan, the rewards – and risks – of innovation are much less clear. But ignoring disruptive technologies and innovations, and failing to continuously push to experiment and learn will lead to irrelevancy. The jury may be out on UCTs, but they need to be taken seriously. GiveDirectly and others like it are pushing us all to do better.

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A recipient signs for a cash transfer (Photo: http://www.plan-international.org)

The popularity of cash transfer programs in the academic and aid blogosphere over the past few years, got me wondering what the difference is between the kind of cash hand-out programs that sponsorship organizations were doing in the early days and today’s cash transfer and conditional cash transfer programs.

What prompted the shift in thinking from ‘line up and get your cash’, to ‘cash handouts are paternalistic, ineffective, unsustainable and create dependency,’ to ‘cash transfers are innovative ways of achieving development gains’ and/or ‘cash transfers empower local people to purchase what they really need?’ How are cash transfers different today from 40+ years ago?

I happen to work for an organization that raises a good percentage of its funding through child sponsorship. From what I’ve heard, for the first few decades of our existence, cash handouts were simply how the organization worked. Along with most other development agencies, we moved away from direct handouts in the 80s. Like some other organizations, by the end of the 1990s we had adopted a rights-based approach. We are also now doing cash grants again in some cases such as this program in Vietnam. I’ve asked around a bit internally and haven’t found anyone able to point me to documentation on what in particular prompted the move from cash handouts to community-based development in the 80s. Obviously it was a change happening most everywhere, not just in the organization where I work. I assume there was a process and a lot of discussion around this like there is with any change in approach, but it’s most likely on paper and not on-line. I do wonder what has been or could be learned about cash transfers from that process of discussion and change in methods.

There is certainly a lot of debate today about cash transfers. When I’ve asked people outside my organization what the difference is between today’s cash transfers and those of 40 years ago, most pro-cash transfer folks say that today’s approach to cash transfers is different or that cash transfers are included as part of broader programs, or that cash transfer programs that succeed are done by governments and not INGOs.

The anti-cash transfer folks tend to feel that cash transfers are not sustainable development, encourage dependency, and cause community conflict, and that they do nothing to improve systems or infrastructure in the long run; eg., what good is having cash if there is no health system? no food to purchase?  no school to attend? Or they consider cash transfers to be individualistic rather than a way to support an entire community or district’s development or worry that conditioning cash transfers can cause unintended consequences. (Here’s a fun piece that talks about what the cash transfer debate says about the international humanitarian community.)

There are tons of studies (mostly by economists it seems) showing that cash transfer and conditional cash transfer programs have improved health, nutrition and education enrollment. Some caution that cash transfer programs such as Brazil’s Bolsa Familia are not a panacea and need to be complemented with other types of programs.

I liked this recent paper ‘Richer but resented: What do cash transfers do to social relations and does it matter‘ by MacAusland and Riemenschneider (HT @rovingbandit). It questions the impact of cash transfers on less visible, more contextualized local and national relationships and power dynamics and suggests a need to go beyond material analysis during design, implementation and impact evaluations of cash transfer programs.

Especially helpful for someone like me who is trying to better understand the discussion around cash transfer programs is the paper’s reference to Copestake’s (2006) aspects of well-being (material, relational and symbolic) and three views on social protection as applied to cash transfers.

I’m pasting in the paragraphs I found especially useful to tempt you into reading the whole paper. I liked the excerpt below because it provides good insight into how different development theories color the objectives set in cash transfer programs and the way that success and impact are measured.

‘…An „income-first view of social protection focuses on the consequences of cash transfers for recipients’ incomes and on their costs, including fiscal costs and perverse incentives to stop working or to seek rents. Second, a needs-first view starts from a more multidimensional view of poverty and focuses on the states role in guaranteeing access to basic needs, including livelihoods, assets, and public action. This would criticise the income-first view for being too narrow. Third, a rights-first view identifies injustice as a key cause of poverty, and criticises the „needs-first approach for being paternalistic.

Very broadly, these views can be identified with philosophical approaches to development. The income-first view is most closely identified with a  modernisation theory and Washington Consensus approach, which is rationalist, individualist and utilitarian in nature, measuring utility primarily in terms of income. The appeal of this view in part lies in the measurability and equivalence of outcomes and costs – so that outcomes measured in dollars can be compared to costs measured in dollars. This possibility is very attractive for planners, since it enables an unambiguous (on this single metric) judgement of whether an intervention should proceed. In terms of approaches to social protection, the income-based view is reflected most clearly in the safety nets approaches of the early 1990s (World Bank 1990).

The needs-first view starts from a similarly utilitarian and individualist standpoint but broadens this by introducing other dimensions of well-being, largely adding material dimensions (such as education, health, and livelihoods) but in some cases relational aspects (such as a capacity for social action). This draws in part from Sens capability perspective (Sen 1985) and is currently being operationalised through the Millennium Development Goals and now multidimensional poverty indices (see e.g. Alkire and Foster 2009). In the social protection literature, this view is closest to the transformative social protection approach (Devereux and Sabates-Wheeler 2004) that emphasises the role of social protection in overcoming not only material shortcomings but in enhancing self-esteem and social status.

The rights-first view has developed rather differently, in part from Latin American traditions of dependency theory and structuralism, which place more emphasis on relational and symbolic aspects of well-being. One application of this tradition can be found in Figueroa (2001) who argues that persistent inequality in Latin America can be explained by processes of social exclusion (based on cultural difference) leading to political exclusion from social protection programmes and education, and resulting economic exclusion. As Copestake (2006b: 4) summarises, this interpretation highlights: “the extent to which economic growth and inequality reduction are dependent upon cultural and political mobilisation, not least through advocacy of human rights. This is in stark opposition to the more common assumption of economists that improved human rights are more likely to follow economic development than to be a precondition for it.”

The consequences of these different views for assessments and planning of cash transfers are quite profound. For instance, the different views will put quite different weights on the negative consequences of excluding members of the community from controlling payments or targeting as opposed to the problems associated with additional costs of targeting. The decision whether to pay for additional community participation will look very different depending on which view is held. Similarly, the different views will imply quite different judgements on whether cash transfer programmes should be replicated, given different material, relational and symbolic outcomes.’

I still don’t really know what I think about cash transfers, (I suppose “it depends’ is always a good answer) but at least I have a bit of a better framework for thinking about them and analyzing what I read about them. Copestake’s three areas (material, relational and symbolic) also give a good framework for analyzing other types of aid and development programs, beyond cash transfers (such as Gift In Kind, as @cynan_sez points out).

I also still haven’t figured out how the old style sponsorship cash handouts were different from today’s ‘innovative’ models. Any old timers out there with insight to share on that?

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