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.