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Tanzania: Can cash transfers make a difference for better health and education?

In Tanzania, the World Bank teamed up with the government to create an innovative conditional cash transfer program that relied on local communities to play a central administrative role in identifying beneficiaries, monitoring conditions, and handling payments. The impact evaluation built into the program found that the cash transfers led to positive changes in both health and education. The program’s effects were greatest among those who needed it most—the poorest of the poor. This suggests that conditional cash transfer systems can be adapted to work well in low-income countries—even in the absence of a strong central government to administer them.

Though the economy in Tanzania continues to grow, poverty remains widespread, especially in rural areas where some 30 million people—three quarters of the population—live. Since 2001, the level of poverty in rural areas has remained stagnant at around 37 percent to 40 percent.

In 2000, the Government of Tanzania, with support from the World Bank, created the Tanzania Social Action Fund (TASAF) as part of a broader strategy to reduce poverty by stimulating local economies. Among other activities, TASAF has funded community-run projects to build health clinics and schools, giving communities experience managing funds, hiring contractors, and monitoring projects. In 2010, the national government rolled out the conditional cash transfer program via TASAF, piloting it in three of the country’s poorest districts, Bagamoyo, Chamwino, and Kibaha.

Eighty eligible study villages were randomized into treatment and control groups of 40 villages each, stratified by village size and district.  Median village size was 560 households at baseline, and every village had a primary school and a public dispensary or health center, facilitating fulfillment of program conditions. Overall, some 5,000 families representing 13,000 beneficiaries were given up to $18 per month, depending on the family size, conditioned on keeping their children enrolled in school, taking children under the age of five for regular health checkups, and ensuring that elderly members of the household also went to health clinics on a regular basis. SIEF funded researchers evaluated the impact. Households were surveyed at baseline in 2009, again in 2011 after 18–21 months (about 1.5 years) of transfers, and finally in 2012 after 31–34 months (about 2.5 years) of transfers.

The program increased the likelihood of seeking treatment when ill, and that it led to significantly higher investments in preventative health measures. For example, there was an 18 percentage points increase in shoe ownership, which can reduce exposure to parasitic worms. Health improvements were concentrated among young children from birth through the age of five, but there were no detectable health improvements for elderly individuals, who were supposed to visit a health clinic once a year. The health improvements, however, took time to materialize: There had been no improvement for children after 1.5 years, but when researchers surveyed the beneficiaries after 2.5 years, children up to age five had 0.76 fewer sick days per month, showing the importance of  looking beyond the short term. There also were significant increases in take-up of health insurance. After 2.5 years, households in villages where the program was implemented were 36 percentage points more likely to participate in the government-run health insurance program, known as the Community Health Fund, or CHF, and being in the program raised by 16 percentage points the likelihood of a household financing medical treatment with health insurance. The project had a significant positive impact on non-bank household savings. For example, participating households invested in more livestock assets, which they used to create small enterprises. The evaluation showed that these programs don’t need to be run centrally to succeed:  communities worked with local government authorities and TASAF to do their own screening and monitoring to identify beneficiaries and ensure they followed conditions for receiving payments.

The Government of Tanzania scaled up the project to include the country’s 123 districts and two islands. In 2015, the program was reaching 1.1 million households across 10,000 villages nationwide, benefitting more than 5.5 million of the country’s poorest citizens. The social safety net project is being implemented with World Bank support.