Are Cash Transfers a Silver Bullet? Evidence from the Zambian Child Grant

Accumulated evidence from dozens of cash transfer programmes across the world suggest that there are few interventions that can match the range of impacts and cost-effectiveness of a small, predictable monetary transfer to poor families in developing countries. These results lead many policymakers to consider cash transfer programmes the ‘gold-standard’ in anti-poverty policy with some even advocating for benchmarking all development interventions against what would have been accomplished with a direct cash transfer. However, the benchmarking argument rests on the accumulated evidence from many programmes that highlights the range of potential benefits of cash transfers, while each individual study typically focused on only one programme and one outcome. This article is the first to provide comprehensive impact results of an unconditional cash transfer from one programme, covering many outcomes in poverty, social and economic domains. We implement an experimental design to evaluate the Zambian Government’s Child Grant, an unconditional cash transfer to families with small children in three of the poorest districts of Zambia. We document the broad impacts of the programme, including on consumption, livelihood strengthening, material welfare of children, young child feeding, investment in assets, productive activities and housing after two years, making this one of the first studies to demonstrate both protective and productive impacts of a national unconditional cash transfer programme. However impacts in areas such as child nutritional status and schooling depend on initial conditions of the household, suggesting that cash alone is not enough to solve all constraints faced by these poor, rural households. Even an unconditional cash transfer programme with a wide range of impacts does not produce effects for all outcomes, suggesting that complementary programmes to achieve specific outcomes will still be necessary even in the most successful cases.