A considerable body of experimental economics research examines the
impacts of cash transfer programmes. In many developing countries,
though, cash transfers are relatively minor compared to other transfer
mechanisms in terms of their claim on public resources. In Malawi,
fertilizer subsidies dwarf cash transfers, while next door in Zambia,
the government pays farmers prices well above market levels for their
maize. Yet no study to our knowledge has attempted to compare the full
impact of social cash transfers and other kinds of transfers on rural
incomes and welfare in low-income countries.
Filipski and Taylor (2012) employ a simulation model of heterogeneous,
interacting agents to compare the impacts of direct payments and other
transfer mechanisms on production, incomes and welfare in rural Malawi
and Ghana. They calibrate their simulations to existing fertilizer
subsidy schemes in both countries. Then they compare the input subsidy
to two other transfer schemes in each country: a market price support
for staples, similar to what historically has been implemented in both
countries, and cash transfers: in Malawi the Social Cash Transfer (SCT)
scheme, and in Ghana, Livelihood Empowerment Against Poverty (LEAP).
Filipski, M.; Taylor, J. E. Simulating the Impacts of Rural Social Cash Transfers and Farmer’s Subsidies in Malawi and Ghana. International Policy Centre for Inclusive Growth(IPC - IG), Brasilia, Brazil (2012) 1 p.