The objective of this review is to provide a framework to understand and document the full range of impacts from Social Cash Transfer (SCT) programs. Local economy impacts of SCT programs may be generated through market and/or non-market interactions between the claimants of the transfers and other people in the community. Our review of the micro approach to local economy effects of SCT programs provides a few lessons for data collection and analysis. The modern econometric framework for impact evaluation based on the definition of a counterfactual is a useful tool to start comprehending the full impacts of a SCT intervention. An impact evaluation study can be designed to capture spillover effects at the local economy level. Two-stage experimental design is appropriate to account for spillovers and measure impacts at the village level. But, evidence from the few empirical studies available so far is incomplete. We need good data on agricultural activities and outcomes to assess the impacts of SCTs on these dimensions. We need a theory to explain spillover effects. Insights from theory can help guide data collection to test competing hypothesis of the sources of spillover effects. Investigating the heterogeneity in impacts is a promising approach for uncovering the mechanisms at play within this reduced-form framework.
Djebbari, H.; Hassine, N.B. Methodologies to Analyze the Local Economy Impact of SCTs. Food and Agriculture Organization of the United Nations, Rome, Italy (2011) 43 pp.