Can Social Cash Transfers Reduce Chronic Poverty? A Case Study of the Malawi SCT Program (PDF)

Master's Thesis from the year 2013 in the subject Politics - International Politics - Topic: Development Politics, grade: 2.1, University of Reading (Graduate Institute of International Development and Applied Economics), course: Development Policy, Practice and Process, language: English, abstract: The purpose of this study was to explore the role that social cash transfers play in reducing chronic poverty in developing countries. The study was set up following an upsurge in development policy on the use of social protection measures including cash transfers as effective means for reducing deep poverty levels and curtailing trans-generational transmissions of poverty. The study was in a form of a case, using the Malawi Social Cash Transfers (SCTs) Scheme.

It specifically aimed at exploring the targeting mechanism of the Malawi SCTs scheme, beneficiaries' use of cash transfers, and on identifying synergies in the scheme. Using a mixed methods approach, the study was mostly based on the review of literature. This was supplemented by key informant interviews conducted by phone. The study found that overall, the Malawi SCTs scheme plays a significant role in moving chronically poor households out of their deprivations. Beneficiaries of the scheme were found to have increased capabilities in accessing food, education and health services and in acquiring assets such as livestock and permanent houses.

However, the study also found that despite its positive impacts, the scheme fails to reach out to all chronically poor households in the country. This was found to be a result of the targeting mechanism followed by the scheme. As such, it was found that the scheme faces a lot of challenges in implementing complimentary services since communities, based on the understanding that everyone is poor, exclude SCT beneficiaries from benefiting from other social protection programmes. Furthermore, it was found that erratic provision of transfers to beneficiary households erodes the positive impacts of the scheme. Therefore the study concluded that although SCTs play a significant role in reducing chronic poverty, better operational designs, such as use of domestic financing and universal targeting measures, would make the schemes more effective.