“What do we know about the relative merits of providing assistance in the form of food or cash in developing countries? asked Daniel Gilligan, Deputy Division Director of the Poverty, Health and Nutrition Division, IFPRI, Washington DC to start his presentation on February 12, 2019. Many studies provide evidence on the impact of food or cash transfers but very few directly compare the impacts of food and cash in the same setting. There is also limited information on relative costs. Often this issue is dominated by ideology and politics. The impact of transfers may differ by modality for several reasons. Food transfers may be more likely to be spent on food (due to transaction costs) or on child goods as in many cultures’ food resources are primarily controlled by women. Food transfers are also not affected by increases in food prices. Cash transfers on the other hand may be more fungible, allowing spending to occur where needed with lower transaction costs, may be cheaper to deliver, and are less paternalistic.
During our research seminar, Gilligan presented the results of a three-year IFPRI–World Food Programme study that assessed the performance of different transfer modalities on household food security in Ecuador, Niger, Uganda, and Yemen. In all countries, an experimental study design was used. The timing, frequency, and value of transfers were equalized to the extent possible across modalities. In Ecuador and Uganda, the evaluation design included treatment groups for food, cash, or vouchers (Ecuador only) and a control group (no transfer) to answer two questions: (1) What is the impact of each modality relative to no transfer, and (2) what is the impact of cash(vouchers) relative to food? In Niger and Yemen, the intervention design included only treatment groups for food or cash and so could only evaluate the relative impact of cash relative to food.
The study found that cash transfers (or vouchers) improved household food security more than food transfers in three of the four countries. Food security was measured using household caloric availability (quantity) and WFP’s Food Consumption Score (quality), a measure of household dietary diversity in which food groups are weighted by their nutrition quality (protein and micronutrients). In Ecuador, all three transfer modalities improved the quantity and quality of food consumed, but vouchers lead to the largest increase in the FCS. In Uganda, cash transfers improved both the quantity and quality of food consumed relative to the control group, but food transfers had no impact on either measure. Contrary to the study design, food transfers were delivered several months earlier than cash transfers in Uganda, which may explain their weak impact on food security. In Yemen, cash transfers caused a relatively greater impact on the FCS than food but had a modestly smaller impact than food on caloric availability. Results in Niger were quite different, with food transfers having a greater impact on diet quality (FCS) than cash. In a comparison of the delivery costs for each intervention, cash transfers (and vouchers) were substantially less costly to deliver than food transfers, making them more cost effective than food transfers everywhere but Niger. The study found little evidence that cash had adverse impacts as measured by creation of social tensions or purchase of intoxicants.
Gilligan concluded his presentation with additional evidence from Uganda that linked cash transfers to pre-school attendance. Using data from a WFP/UNICEF program in Karamoja, the study analyzed the impact of cash on cognitive development for preschool children. Cash transfers significantly improved child development across three out of four domains (visual reception, receptive language, expressive language) for children ages 3-5 years. The research explored the plausibility that these effects operated through improved nutrition or stimulation, finding support for both channels: the program reduced anemia (particularly moderate/severe), improved diet quality (particularly meat/eggs, dairy), and improved sanitation/health at ECD Centers, while ECD center participation increased.
The seminar presentation is available below.
