A Regional Multiplier Approach to Estimating the Impact of Cash Transfers on the Market: The Case of Cash Transfers in Rural Malawi

Simon Davies

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Poverty, Education, and Child Welfare International Development and Aid Economic Growth and Fiscal Policies

Abstract

This article analyses the impact on the local economy of an emergency cash–transfer programme in rural Malawi. The results are of interest, given the growing use of cash transfers as development aid as well as the increasing popularity of such transfers as a form of social protection across sub–Saharan Africa. It uses a form of social accounting matrix to show that there are widespread benefits for the regional economy as a whole (with multiplier estimates of 2.02 to 2.45), especially during the most ‘lean’ periods of the year, and for small farmers and small businesses in particular, as this is where poorer households' purchases are focused; education and health also benefit.

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References

2004Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages 2002Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages 2002Does Foreign Direct Investment Increase the Productivity of Domestic Firms 1985Social accounting matrices : a basis for planning 1999Estimating the Multiplier Effects of Tourism Expenditures on a Local Economy through a Regional Input-Output Model 2006Reducing Child Poverty with Cash Transfers: A Sure Thing?2006Cash‐based interventions: lessons from southern Somalia

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