Events

Policy Research Talk: The Unintended Consequences of Cash Transfers

December 11, 2019

Washington, DC and Online

  • Cash transfers are a major anti-poverty tool, reaching 400 million poor households around the world. While there may be no more direct means to reduce poverty than providing cash, even this straightforward intervention can carry unintended consequences that undermine its intended goal.

    In this Policy Research Talk, World Bank economist Eeshani Kandpal will present new research showing that cash transfers can generate significant negative spillovers for nonbeneficiaries. She will highlight an example from the Philippines where a targeted cash transfer program significantly increased local prices of perishable protein-rich foods, which in turn raised stunting rates among young nonbeneficiary children by 34 percent. The underlying relationship between prices and transfers—prices rose the most in villages with the largest cash influx—has been found in other contexts as well. While these effects are likely concentrated in the poorest areas, fully understanding the set of conditions under which such spillovers arise will be critical in designing effective anti-poverty policies.

    The relationship between prices and saturation demonstrates the risks of household-based targeting. A key question Kandpal will address is whether there are practical alternative targeting strategies that allow governments to distribute limited resources over a wide geographic base while avoiding such spillovers. She will conclude with a discussion of the literature on targeting strategies, including Universal Basic Income, and what we might infer about the potential spillovers from these various strategies.

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    Eeshani Kandpal (Speaker)

    Economist

    Eeshani Kandpal is an Economist in the Development Research Group of the World Bank. Her research agenda lies at the intersection of two themes. The first is that average treatment effects often mask the widely divergent impacts of development policy, like health interventions, cash transfers, and empowerment programs. Unintended consequences may bolster or undermine the intended goals of the policy, but economic theory and evidence can help us predict where such consequences may arise. A second theme of her research is that inequality in access to government services or social capital often varies by attributes like gender, wealth, and ethnicity or caste. The conjunction of these two themes, and particularly how public policy interacts with preexisting inequality, is where she situates her research.

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    Roberta Gatti (Discussant)

    Chief Economist, Human Development

    Roberta Gatti is the Chief Economist of the Human Development practice group in the World Bank. Roberta joined the World Bank in 1998 as a Young Professional in the Development Research Group. Her papers, which includes theoretical and empirical contributions on labor and household economics, political economy, growth, and social inclusion, are published in international refereed journals such as the Journal of Public Economics, the Journal of Economic Growth, and the Journal of Development Economics.

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    Aart Kraay (Chair)

    Director of Research

    Aart Kraay is Director of the Development Research Group at the World Bank. He joined the World Bank in 1995 after earning a Ph.D. in economics from Harvard University (1995), and a B.Sc. in economics from the University of Toronto (1990). His research interests include international capital movements, growth and inequality, governance, and the Chinese economy. His research on these topics has been published in scholarly journals such as the Quarterly Journal of Economics, the Review of Economics and Statistics, the Economic Journal, the Journal of Monetary Economics, the Journal of International Economics, and the Journal of the European Economic Association. He is an associate editor of the Journal of Development Economics, and co-editor of the World Bank Economic Review. He has also held visiting positions at the International Monetary Fund and the Sloan School of Management at MIT, and has taught at the School of Advanced International Studies at Johns Hopkins University.

  • The monthly Policy Research Talks showcase the latest findings of the World Bank’s research department, challenge and contribute to the institution’s intellectual climate, and re-examine conventional wisdom in current development theories and practice. These talks facilitate a dialogue between researchers and operational staff and inform World Bank operations both globally and within partner countries. Read More »

EVENT DETAILS

Watch Live on December 11