Cash Transfer Programmes
Cash transfers have become the dominant modern anti-poverty tool, reaching over 1.3 billion people across 200+ programmes globally. Conditional cash transfers (Brazil's Bolsa Família, Mexico's Prospera) tie payments to school attendance or vaccination. Unconditional cash transfers (Pakistan's BISP, GiveDirectly's direct giving) provide cash with no strings attached. The evidence is broadly positive across decades of randomized trials.
Key insights
The evidence is unusually clean
Hundreds of randomized evaluations across Latin America, Africa, and South Asia find consistent effects: cash transfers raise household consumption, increase school attendance and child nutrition, reduce child labour. Effects on adult labour supply are small to nil (a much-feared concern that empirically didn't materialize at scale). The 'people will spend it on alcohol' worry has been repeatedly refuted — Evans & Popova 2017 reviewed 19 studies and found null or negative effects on temptation goods.
Brazil's Bolsa Família is the largest CCT
Brazil's Bolsa Família started in 2003 by merging four earlier programmes. It reached 14 million families at peak, was replaced by Auxílio Brasil (2021), and is back to ~21 million families under Bolsa Família 2.0 (2023). Conditions: school attendance ≥85% for children, prenatal care for pregnant women, child vaccinations. Total spending: ~0.4% of Brazilian GDP. Credited with substantial poverty reduction; complementary to broader macroeconomic gains.
Conditional vs unconditional — diminishing case for conditions
Early generations of CCTs imposed conditions on the theory that money alone wouldn't change behaviour. Evidence from the past 15 years has weakened this view. Unconditional cash transfers produce similar effects on most outcomes, with lower administrative costs. The remaining case for conditions is mostly political (paying for conditions is more politically palatable than 'free money') rather than evidence-based.
Cash transfer coverage — selected major programmes
Beneficiaries (millions of individuals)
Key Finding: South Asia and Brazil run the largest national programmes; India's PM-KISAN reaches over 100 million farming households.
Typical effects of cash transfers — evidence summary
Effect direction and approximate magnitude in randomized evaluations
Key Finding: Effects are robust across outcomes: positive on consumption, schooling, nutrition; small/null on adult labour supply and 'temptation' goods.
Methodology & caveats
Conditional vs unconditional
Conditional Cash Transfers (CCT) require recipients to meet specified conditions — children's school enrolment, attendance, vaccinations, health check-ups. Unconditional Cash Transfers (UCT) impose no conditions beyond eligibility. Hybrid programmes 'soft-condition' or label transfers without enforcement. The evidence base now treats unconditional as the default for design, with conditions added only where strongly justified.
Targeting methods
Programmes use various combinations of: geographic targeting (high-poverty regions), means testing (income/asset thresholds), proxy means testing (asset and demographic scoring), categorical targeting (children, elderly, disabled), self-targeting (low-wage public works that only the poor will take). All have errors — exclusion of some who should be included, inclusion of some who shouldn't be. Universal basic income removes targeting at the cost of higher spending.
GiveDirectly and the RCT case
GiveDirectly delivers unconditional cash to extremely poor households (mostly Kenya, Uganda, Rwanda, Malawi, Mozambique) via mobile money. They have been the subject of multiple high-quality RCTs evaluating different transfer sizes, durations, and combinations. The results have become a reference benchmark — any new anti-poverty intervention is now expected to show effects 'at least as good as just giving cash'.