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Beyond Experiments in Development EconomicsLocal Economy-wide Impact Evaluation$
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J. Edward Taylor and Mateusz J. Filipski

Print publication date: 2014

Print ISBN-13: 9780198707875

Published to Oxford Scholarship Online: September 2014

DOI: 10.1093/acprof:oso/9780198707875.001.0001

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Spillover Effects of Social Cash Transfers

Spillover Effects of Social Cash Transfers

Lesotho’s Child Grants Program

9 (p.181) Spillover Effects of Social Cash Transfers
Beyond Experiments in Development Economics

Karen Thome

Benjamin Davis

Oxford University Press

Africa is the focus of a new generation of social cash transfer programs to combat extreme poverty. Evaluations of these programs use randomized control trials (RCTs) comparing outcomes in treatment and control households. These households are the conduit through which new cash enters local economies. This chapter shows how to build a model to simulate the full local economy-wide impacts of social cash transfers, including the spillovers they create. Monte Carlo methods are used to construct confidence intervals around simulated program impacts. Findings from Lesotho’s Child Grants Program reveal local income multipliers as high as 2.23 maloti per loti transferred to beneficiary households. Most of the productive spillovers that create these multipliers accrue to non-beneficiaries, most of whom are poor—just not poor enough to be eligible for the program. The local supply response is critical in shaping the spillovers from this poverty program.

Keywords:   cash transfers, spillovers, poverty, economy-wide model, randomized control trial, supply response, economic simulation, local general equilibrium, impact evaluation, development project

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