The effects of DFID CTPs on poverty and vulnerability

Summary of research1

Location: Global

What we know: Cash transfers are an important element of national social protection systems to alleviate poverty and vulnerability.

What this article adds: A recent review assessed the impact of DFID-supported national cash transfer programmes (CTPs) between 2011 and 2015 on poverty and vulnerability, development of sustainable, nationally-owned CTPs and on value for money. Health and nutrition objectives are included in all DFID CTPs, which overall are having a “satisfactory” impact on poverty and vulnerability, having reached 9.3 million people (six million target). Country ownership of CTPs has increased but systematic financial and technical assistance and strategic oversight is lacking. Value-for-money criteria are largely met and a large research portfolio has contributed to the evidence base. Impact on secondary objectives is more variable; evidence of impact on health and nutrition is uneven, both within and between programmes, with scope to optimise. Recommendations are made regarding scale-up, clarity regarding impact in programme design, women’s empowerment and strategic approach to technical assistance on CTPs.

Cash transfers are an important element of national social protection systems and help to alleviate poverty by supplementing household income, thereby increasing food consumption and access to education and health services, among other benefits.

Under its global results framework for 2011-15, the UK Department for International Development (DFID) committed to reaching at least six million people with cash transfers. Over this period, DFID spent an average of £201 million per year – around 2% of its total expenditure – on the support of national cash-transfer programmes (CTPs)², either through direct funding or the provision of technical and financial support for system-building. Most of these programmes fall within DFID’s social protection portfolio, contributing to the “poverty, vulnerability, nutrition and hunger” pillar of DFID’s results framework, and aim to have positive effects on nutrition and health.

This review by the Independent Commission for Aid Impact (ICAI) explored the impact of DFID CTPs from 2011-2015 on poverty reduction. The authors conducted desk reviews of 18 of the 28 DFID programmes and detailed case studies of programming in two countries: Bangladesh and Rwanda. The review addresses three broad areas: (1) The impact of DFID-supported cash transfers on poverty and vulnerability, including health and nutrition; (2) DFID’s contribution to the development of sustainable, nationally-owned cash transfer systems; and (3) The value for money of DFID’s cash-transfer programming.

The 2015 DFID Annual Report showed that between 2011 and 2015 the department had reached a “peak”³ of 9.3 million people with cash transfers, against a target of six million. The authors examined this claim thoroughly and found some inclusion errors in the data that led to over-reporting of around 475,000 people, all from one programme. These errors were corrected when brought to DFID’s attention. For the rest of the programme portfolio, the authors verify that DFID had exceeded its target.

The authors report that DFID CTPs have succeeded in their primary purpose of alleviating extreme poverty. Programmes have consistently helped to improve household incomes and boost consumption levels of food and other basic items, with no evidence of increases in unhealthy consumption choices (e.g. alcohol or gambling). The evidence suggests a modest but positive impact on savings, asset accumulation and debt reduction, which in turn increases household resilience to shocks.

In terms of education, results of DFID-funded programmes are uneven, with some showing a positive contribution to school attendance but others only modest impact. There are encouraging signs of women’s empowerment in DFID-funded programmes but the evidence is not strong enough to support a clear conclusion.

Health and nutrition objectives are included in all DFID CTPs. This reflects empirical evidence from the literature that cash transfers can promote both greater use of health services and more dietary diversity, although impacts on child wasting and stunting are generally weaker. Evaluations of DFID-funded programmes show a wide range of uneven results, including some cases where no positive effect was observed.

In some instances, health and nutrition objectives are not being achieved; in Ethiopia and Bangladesh, DFID is supporting experiments combining cash transfers and other types of health and nutrition-related support in order to improve results. The available evidence suggests that several of the programmes DFID is supporting are currently not optimised for maximum impact on nutrition and health and that improvements in design and implementation – including timeliness and transfer size – could strengthen results in this area.

Overall, in the context of the ICAI’s traffic-light award system⁴, DFID CTPs were awarded a green-amber score for impact on poverty and vulnerability, DFID having achieved and exceeded its global-reach targets and across the portfolio. Impact on secondary objectives are more variable and evidence of impact on health and nutrition is uneven, both within and between programmes, with a pattern of results that DFID is sometimes unable to explain.

Wherever possible, DFID funds cash transfers through national programmes. The review finds that DFID has good relations with its national counterparts and has helped to increase country ownership of CTPs. However, a systematic approach to both financial and technical assistance is lacking, with no overall clearly stated rationale or strategy for DFID’s efforts in this area. There is also a lack of adequate monitoring and assessment of the results of its system-building activities. The authors therefore awarded DFID an amber-red in this area.

The review finds that DFID’s support for cash transfers meets many of the criteria for value for money. It is consistently delivering on its core objective of alleviating extreme poverty and reducing vulnerability. However, there may be a value-for-money case for scaling up funding towards national coverage. DFID has made an important contribution to building up evidence on what works in CTPs. During the review period, it managed a centrally-commissioned research portfolio of over £35 million that has been innovative in both themes and methodology and has demonstrated a willingness to learn from international evidence and from DFID’s own programmes. On this basis, the authors rated DFID’s portfolio as green-amber on value for money.

Conclusion and recommendations

The authors make four recommendations for the further improvement of DFID CTPs (Box 1). They conclude that, overall, DFID’s cash transfer portfolio merits a green-amber score. The portfolio has demonstrated its capacity to achieve impact in its core objective of alleviating extreme poverty. DFID has also made an important contribution to encouraging the spread of national protection systems. There may be scope to achieve even greater value for money by scaling up successful programmes.

Endnotes

¹ Independent Commission for Aid Impact (ICAI) (2017). The effects of DFID’s CTPs on poverty and vulnerability: An impact review. January 2017. Available from: http://icai.independent.gov.uk/report/cash-transfers/

²National programmes did not include humanitarian assistance but included any kind of regular payments made to individuals and households, such as child-support grants, old-age pensions, payments to vulnerable groups such as widows and people with disabilities and transfers to particularly poor households.

³ DFID uses a “peak year” indicator which takes the largest number of people reached in any single year between 2011 and 2015 by each programme and sums that “peak” figure across all programmes. The figure of 9.3 million is therefore the sum of the best single-year reach performance of each CTP over this period.

⁴Green: Strong achievement across the board; Green/Amber: Satisfactory achievement in most areas but could do more; Amber/Red: Unsatisfactory achievement in most areas, with some positive elements; Red: Poor achievement across most areas with urgent remedial action required in some.