SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 Evidence at Your Fingertips Series Cash or In-Kind Transfers: Do Outcomes Vary According to Transfer Modality? Summary 1. Cash transfers in general appear to be more 3. The cost of in-kind transfers, such as food, effective than in-kind transfers or vouchers at presents a potential limitation to the improving a range of outcomes, including decreasing scalability of programs, despite evidence monetary poverty, improving health and nutrition, suggesting their impact on outcomes; these transfers and increasing food security, across diverse country tend to be more expensive than cash alternatives. contexts, program objectives, and design features. 4. Health, nutrition, and food security outcomes 2. However, identifying a superior modality are overwhelmingly the focus of the transfer is challenging due to the heterogeneity in programs included in this review, although a few context, program design, and objectives of the studies studies also assess income and wealth outcomes. reviewed, despite evidence generally favoring the Further evidence for other outcomes is needed. effectiveness of cash transfers and acknowledging the enhanced effectiveness of a combination of modalities, referred to as “cash plus,” in specific cases. SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 Evidence Overview Studies reviewed focused on health, nutrition, and food more than 10 countries ranging from Africa (e.g., security outcomes, although a few examined income, Malawi) and Middle East and North Africa (e.g., Yemen) assets, labor, and education (Table 1). The review also to South Asia (e.g., Pakistan) and Latin America (e.g., covered a wide array of contexts with evidence from Mexico). Table 1: Overview of Included Studies: Transfer Modality Brief Country Program Scope of Outcomes measured evaluation Assets Consumption Food Income & Health Education & monetary Security & labor market poverty nutrition participation South Transfers to the Cash vs livestock X X Sudan Ultra-Poor Bangladesh Transfer Modality Cash vs food vs half Research Initiative cash + half food vs X X cash + BCC vs food + BCC Pakistan Women and Cash vs vouchers Children/Infants X Improved Nutrition in Sindh Mexico Programa de Cash vs food basket X X Apoyo Alimentario Ecuador World Food Cash vs food basket Programme vs vouchers X X program Rwanda GiveDirectly Cash vs livestock X X X X DRC Social protection Cash vs vouchers X X X program Yemen World Food Cash vs food basket Programme X X program Niger Zinder Project Cash vs food basket X Niger Acute malnutrition Cash vs food vs X X program cash + food Ethiopia Productive Safety Cash vs cash + food X X X Net Program vs food basket Uganda Early childhood Cash vs fortified development food X X program Malawi Cash and Food for Cash vs food basket X Livelihoods Pilot vs cash + food Sources: Ahmed, Hoddinott, and Roy 2019; Aker 2017; Audsley, Halme, and Balzer 2010; Avitabile, Cunha, and Meilman Cohn 2019; Chowdhury et al. 2017; Cunha, De Giorgi, and Jayachandran 2019; Cunha 2014; Gentilini 2016; Gilligan and Roy 2013; Hoddinott, Sandström, and Upton 2018; Langendorf et al. 2014; Leroy et al. 2010; McIntosh and Zeitlin 2021; Sabates-Wheeler and Devereux 2010; Schwab 2019. -2- SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 Introduction training without the provision of inputs, for instance, and other types of trainings, public works programs, and Three forms of transfer modalities are assessed in this subsidized goods are not included. Vouchers, also known brief: cash, voucher, and in kind. Unlike cash transfers, as near-cash transfers, have characteristics of both cash which allow beneficiaries to choose how to spend the and in-kind transfers; they allow for some level of choice, transfer, in-kind transfers supply people with food, similar to cash, but may be restricted to specific items physical capital, assets, materials, or training. This review or shops (Gentilini 2015). This brief includes evidence considers only a subset of in-kind transfers—those that from 2010 onward to encompass the breadth of research provide a material good. Agricultural or other livelihood covering more than a decade (Table 1). Key Questions 1. Do different modalities of transfers have different impacts, either at the individual or the household level? 2. Is one modality more cost-effective than the others? 3. How could the evidence regarding modalities influence the design and implementation of transfer programs? 4. What are the evidence gaps regarding the effectiveness of cash, in-kind, and voucher transfers? Key Findings In Rwanda, where child malnutrition is high, a multidimensional in-kind intervention provided seeds or For greater readability and comparability of modalities, livestock along with training or one of two sizes of cash the key findings for this brief are organized according to transfer (McIntosh and Zeitlin 2021). The smaller cash modality rather than outcome, in contrast to other briefs transfer (34 percent of mean annual consumption) had in this series. no significant impact on any maternal and child health and nutrition outcomes, whereas the larger cash transfer (142 percent of mean annual consumption) had significant Cash Transfers impacts on household dietary diversity score, height- for-age z-scores, weight-for-age z-scores, middle-upper arm Across a wide range of country contexts, program circumference, and child mortality. Both cash transfers had objectives, and design features, cash appears to have significant impacts on consumption, savings, productive a greater effect on health, nutrition, food security, and and consumption assets, and house value, whereas the economic outcomes than in-kind or voucher transfers. in-kind transfer had a significant impact only on savings. -3- SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 Two additional studies revealed the advantage of have led to the cognitive improvements, whereas food “cash plus” transfers, which provided cash and another rations were likely shared with other household members, intervention, over in-kind transfers and vouchers. limiting the nutritional intake among target children. In Pakistan, in combination with behavior change communication (BCC), a larger cash transfer—twice the In one study, cash proved more effective for certain amount of the smaller cash transfer and the voucher— outcomes, whereas food demonstrated greater efficacy reduced the odds of children being wasted at six for others (Schwab 2013). Given cash was cheaper to months1 and being stunted and reduced the risk of acute deliver and administer ($4.09 [8.3 percent of the transfer respiratory infections, fever, and malaria (Fenn et al. value], vs $10.37 [21.1 percent of the transfer value]) it 2017). Although the smaller cash transfer and voucher, may have an advantage over food transfers though this equally priced, reduced stunting, and the smaller transfer is dependent on the primary outcomes of interest. Cash reduced risk of fever and malaria, neither affected the recipients in Yemen exhibited greater dietary diversity primary outcome of wasting (Fenn et al. 2017). Likewise, while food recipients consumed a greater quantity of in Bangladesh, although cash, food, or cash plus food food, e.g. calories per day. The transfers also had different had no impact on children’s nutritional status, cash paired productive effects: in-kind food transfers encouraged with BCC decreased chronic undernutrition, with height- nonfood production and cash recipients purchased more for-age z-scores increasing by 0.25 standard deviations. livestock, though study limitations prevent definitive Cash plus BCC also increased children’s energy intake, conclusions on the productive impacts of the transfers animal-source food consumption and improved childcare (Schwab 2019). practices, which were likely pathways to the effects on nutritional status. In-kind food transfers paired with BCC increased energy intake but did not decrease chronic In-Kind Transfers undernutrition. (See the size/value brief for further In-kind transfers may be preferred when programs are insights). designed to influence behaviors, such as consumption patterns, or provide basic needs in the face of crises. Evidence from a program in Malawi found that cash Evidence also suggests that in-kind transfers may facilitate improved food security indicators, including food targeting by inducing less-needy people to self-select out consumption and dietary diversity, more than standard of the program by offering a good that appeals only to in-kind food transfers (Audsley, Halme, and Balzer 2010). the intended target rather than cash, which is universally Consumption scores also increased in the cash-only group, appealing (Aker 2017). Within the broader category of by 23 percent more than the food group and 14 percent in-kind transfers, food is the most frequently provided more than the cash plus food group. The food recipients according to the available literature, although there had no significant change in dietary diversity. In addition are considerable variations in the composition of food to children’s nutritional status, one study that assessed transfers based on program targeting and objectives. early childhood development outcomes found cash to be Programs targeting infants and young children may the most effective modality. In Uganda, micronutrient- provide specialized foods tailored to their nutritional fortified food had no significant impacts on cognitive or needs, such as lipid-based nutrients or micronutrient- noncognitive scores, whereas cash significantly increased fortified foods, whereas programs targeting households cognitive measures for children aged three to five (Gilligan provide a broader range of foods. Food transfers and and Roy 2013). Cash generated significant improvements agricultural transfers were examined. in children’s dietary quality and anemia status, which may 1 This effect did not persist after one year. -4- SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 Food Transfers (Cuhna 2014). Four to ten years later, while in-kind transfers had no impact on standardized test scores, cash Findings from two studies that provided specialized food transfers resulted in lower test scores than in controls transfers tailored to the nutritional needs of infants and (-0.14 to -0.19 standard deviations) (Avitabile, Cunha, young children suggest that these transfers were not as and Meilman Cohn 2019). Both transfers led to increased effective as other modalities at improving nutrition. As child labor, which is probably harmful to learning and previously mentioned, micronutrient-fortified foods had no thus responsible for the poor outcomes. Food transfer impact on children’s cognitive and noncognitive outcomes children’s increased consumption of zinc and iron, which in Uganda (Gilligan and Roy 2013). A child-focused support brain development, likely lessened the adverse acute malnutrition program in Niger conducted during effects of child labor on learning. Similarly to the Niger the lean season found that a transfer of supplementary evidence, food transfers in this setting have much higher food plus cash had a much stronger preventive effect distribution costs than cash (18  percent higher) (Cuhna on moderate acute malnutrition (half the incidence) and 2014). severe acute malnutrition (one-third the incidence) than cash or supplementary food alone (Langendorf et al In Ecuador, a transfer program featuring cash, food, 2014). Neither food nor cash alone was as effective as and vouchers was designed to address the food security the combined transfer. and nutrition needs of poor Ecuadorian households and Colombian refugees (Hidrobo, Peterman, and Heise Other food transfers included in the review provided 2014). Food recipients had greater food consumption staples such as cereals and pulses, which anyone in the and per capita caloric intake, but vouchers were more household can consume. As seen above, in most studies, effective at increasing dietary diversity. All transfers food transfers were less effective than other modalities reduced controlling behaviors and physical and sexual and more expensive to implement (Cuhna 2014; Hidrobo, violence equally. These findings support previous findings Peterman, and Heise 2014; Schwab 2019), although that, rather than one modality being superior in all cases, three studies found food to be more effective. A review the most-effective modality depends largely on the of Ethiopia’s Productive Safety Nets Program found that outcomes of interest. That said, food transfers were far food and cash plus food increased income growth, asset more expensive to deliver ($11.46, vs $2.99 to provide accumulation, and self-reported food security but food cash and $3.27 to provide vouchers). transfers (59 percent) were slightly more effective than cash plus food (45 percent) at increasing income (Sabates- Agricultural Transfers Wheeler and Devereux 2010). In a study in Niger, food transfers had larger impacts on food consumption, Of the studies reviewed, only two provided livestock or dietary quality, and food-related coping strategies than seed transfers, along with training, and both had mixed cash transfers (Hoddinott, Sandström, and Upton 2018), results. As noted earlier, the livestock transfer in Rwanda but while transfer amounts were equal, implementation affected savings but not other outcomes (McIntosh costs for food transfers were15 percent more than cash. and Zeitlin 2021).2 With the goal of increasing asset The Programa de Apoyo Alimentario in Mexico, which accumulation and food security for the poorest households, provided food or cash transfers, detected minimal a South Sudan pilot of Targeting the Ultra-Poor provided difference in effects on overall food consumption but training, asset transfers (livestock), food stipends, and food transfers led to significant increases in consumption coaching. This was compared with unconditional cash of vitamin C, iron and zinc by children and their mothers transfers (Chowdhury et al 2017). Although both transfers 2 Consumption, nutrition (household, maternal and child), health (maternal and child), and welfare outcomes. -5- SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 increased household consumption, only Targeting the on a variety of food and nonfood items including school Ultra-Poor significantly increased assets.3 Because fees, clothing, agricultural inputs, and small animals. The agricultural assets were provided with training, it is not second and third vouchers could be spent only on food possible to review the impact of the asset transfer alone. items at the fairs. Although all items at the voucher fair Nonetheless, this reinforces that a “plus” component may were available in local markets, some items were excluded have more significant effects than cash alone, particularly from the voucher fairs, such as meat, doughnuts, and beer. for poorer households. Although cash and food vouchers resulted in different purchasing decisions, this did not lead to differences in food consumption, and cash transfers were found to be Voucher Transfers more cost-effective (Aker 2017). Vouchers fall between cash and food transfers given that they allow for some level of choice but may be restricted Implementation Considerations to a predefined set of goods. Based on the available evidence, vouchers may be inadequate to improve health, Cash appears to be more cost-effective, delivering similar dietary diversity, and nutrition outcomes. or better health, nutrition, and food security outcomes than in-kind or voucher transfers. Cost information was In a program in Pakistan, which has a high prevalence of not available for all studies, but when it was, cash was child anemia and wasting, food vouchers could be used the least expensive to deliver and implement. In Niger, for for specified fresh foods (fruits, vegetables, milk, meat) at example, it costed $12.91 to make each transfer to a food specific shops (Fenn et al. 2017). The food vouchers had beneficiary, versus $4.00 to make each transfer to a cash no effect on nutritional outcomes in children under five beneficiary (Hoddinott, Sandström, and Upton 2018). In and did not reduce the risk of any disease. An unintended the Democratic Republic of the Congo, vouchers were outcome was observed in the voucher arm: a negative more expensive ($14.35 per recipient, for administrative intervention effect on mean hemoglobin, possibly because costs4), with cash involving only a one-time account- of the restrictive nature of the vouchers. Because voucher opening fee of $8 per recipient (Aker 2017). In Malawi, households could shop only at specific shops, what was cash was more effective than food at increasing food in stock at certain times may have limited what they were consumption, diversity, and threshold scores5, and was able to purchase, resulting in a less-diverse selection of more cost-effective (Audsley, Halme, and Balazar 2010). foods. There were also anecdotal reports that vendors Program costs to increase food security indicators by overcharged for food items redeemed using the vouchers 1 percent of their baseline values are significantly lower to cover administrative fees for recovering voucher costs. for cash. As such, the voucher value may have been less than the face value. Context will have implications for selection and implementation of modalities. For instance, food transfers In the Democratic Republic of the Congo, vouchers could may be preferable in situations in which markets are not be spent only at a voucher fair on prearranged days. For functioning or have limited stock and have shown more the first distribution, recipients could spend the voucher promise for increasing daily caloric intake, which may be 3 The paper estimates treatment effects for total value of assets owned, total value of potentially productive assets, as well as land and financial assets. 4 This includes staff time, materials, security, travel, and account and transfer fees. 5 A monitoring and evaluation system which describes households’ food consumption level. It was designed by the International Food Policy Research Institute (IFPRI) to track changes in three food security indicators: the food diversity score; the food consumption score; and the food consumption group. -6- SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 the primary outcome in emergency response. Targeted intake. There are also gaps in assessing the effects of nutrition impacts may be achieved through specific different modalities on outcomes other than health, supplementation to increase food consumption or caloric nutrition, and food security. intake. Security is also an important factor in choosing transfer modalities. In the Democratic Republic of the 2. If vouchers are selected, decision makers should be Congo, cash offered the greatest security to recipients cautious about restricting food-based vouchers—in because it was more easily hidden, which reduced the terms of specific foods and where vouchers can be potential for theft, and did not require recipients to travel redeemed—to ensure that a variety of food can be long distances or wait for long periods of time to collect obtained. (Aker 2017). 3. If food transfers are selected, policy makers and implementers should consider whether specific Emerging Insights nutritional outcomes are desired to justify the costs of implementation. 1. Further research is needed to better understand the conditions under which different modalities—and their 4. If cash transfers are selected, an enabling environment composition—are more or less effective. For instance, must be in place such that households can access the composition of food transfers can significantly available goods in the market. affect outcomes such as dietary diversity and caloric References Ahmed, Akhter, John Hoddinott, and Shalini Roy. 2019. “Food Transfers, Cash Transfers, Behavior Change Communication and Child Nutrition: Evidence from Bangladesh”. IFPRI Discussion Paper 1868. Washington, DC: International Food Policy Research Institute. Aker, Jenny C. 2017. “Comparing Cash and Voucher Transfers in a Humanitarian Context: Evidence from the Democratic Republic of Congo.” World Bank Economic Review 31(1): 44-70. Audsley, Blake, Riikka Halme, and Niels Balzer. 2010. “Comparing Cash and Food Transfers: A Cost-Benefit Analysis from Rural Malawi.” In Revolution: From Food Aid to Food Assistance, Innovations in Overcoming Hunger, edited by Steven Were Omamo, Ugo Gentilini, and Susanna Sandström, 89-102. Rome, Italy: World Food Programme. Avitabile, Ciro, Jesse M. Cunha, and Ricardo Meilman Cohn. 2019. “The Medium Term Impacts of Cash and In-Kind Food Transfers on Learning.” Policy Research Working Paper No. 9086. World Bank, Washington, DC. Chowdhury, Reajul, Elliott Collins, Ethan Ligon, and Munshi Sulaiman. 2017. “Valuing Assets Provided to Low-Income Households in South Sudan.” https://bracupgi.org/wp-content/uploads/2022/08/Valuing-Assets-Provided-to-Low-Income-Households-in-South-Sudan.pdf. Cunha, Jesse M. 2014. “Testing Paternalism: Cash Versus In-Kind Transfers.”. American Economic Journal: Applied Economics 6 (2): 195-230. Cunha, Jesse M., Giacomo De Giorgi, and Seema Jayachandran. 2019. “The Price Effects of Cash Versus In-Kind Transfers.” Review of Economic Studies 86 (1: 240-81) Fenn, Bridget, Tim Colbourn, Carmel Dolan, Silke Pietzsch, Murtaza Sangrasi, and Jeremy Shoham. 2017. “Impact Evaluation of Different Cash- Based Intervention Modalities on Child and Maternal Nutritional Status in Sindh Province, Pakistan, at 6 Mo and at 1 Y: A Cluster Randomised Controlled Trial.” PLoS Medicine 14 (5): e1002305. Gentilini, Ugo. 2015. “Revisiting the “Cash Versus Food” Debate: New Evidence for an Old Puzzle?” World Bank Research Observer 31 (1): 135-67. Gentilini, Ugo. 2016. The Other Side of the Coin: The Comparative Evidence of Cash and in-Kind Transfers in Humanitarian Situations? 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Washington, DC: International Food Policy Research Institute. http://ebrary.ifpri.org​ /cdm/ref/collection/p15738coll2/id/128125 Langendorf, Céline, Thomas Roederer, Saskia de Pee, Denise Brown, Stéphane Doyon, Abdoul-Aziz Mamaty, Lynda W-M. Touré, Mahamane L. Manzo, and Rebecca F. Grais. 2014. “Preventing Acute Malnutrition Among Young Children in Crises: A Prospective Intervention Study in Niger.” PLoS Medicine 11 (9): e1001714. Leroy, Jef L., Paola Gadsden, Sonia Rodriguez-Ramirez, and Teresa Gonzalez de Cossío. 2010. “Cash and In-Kind Transfers in Poor Rural Communities in Mexico Increase Household Fruit, Vegetable, and Micronutrient Consumption but also Lead to Excess Energy Consumption.” Journal of Nutrition 140 (3): 612-7. McIntosh, Craig, and Andrew Zeitlin. 2021. “Cash versus Kind: Benchmarking a Child Nutrition Program against Unconditional Cash Transfers in Rwanda.” Cornell University, Ithaca, NY. https://arxiv.org/abs/2106.00213. Sabates-Wheeler, Rachel, and Stephen Devereux. 2010. “Cash Transfers and High Food Prices: Explaining Outcomes on Ethiopia’s Productive Safety Net Programme.” Food Policy 35 (4): 274-85. Schwab, Benjamin. 2013. “In the Form of Bread? A Randomized Comparison of Cash and Food Transfers in Yemen.” American Journal of Agricultural Economics 102 (1): 91-113. Schwab, Benjamin. 2019. “Comparing the Productive Effects of Cash and Food Transfers in a Crisis Setting: Evidence from a Randomised Experiment in Yemen.” Journal of Development Studies 55 (sup1: 29-54. Trako, Iva and Dahyeon Jeong. 2022. “What Do We Know about Cash and In-Kind Transfers in Humanitarian Settings? Not Enough.” Let’s Talk Development. World Bank Blogs. September 20. https://blogs.worldbank.org/developmenttalk/what-do-we-know-about-cash-and-kind​ -transfers-humanitarian-settings-not-enough-0. -8- SOCIAL PROTECTION & JOBS | P  OLICY & TECHNICAL NOTE MARCH 2024 | No. 32 Evidence at Your Fingertips Series This note is part of thematic briefs in the series including: • Evidence Briefs on Cash Transfers: Overview and Ten Key Messages • Cash Transfer Size: How Much Is Enough? • Cash Transfer Timing: How Transfer Duration and Frequency Contribute to Outcomes • Cash Transfer Payment Mechanisms: Do Outcomes Vary According to Payment Mechanism? • Can Safety Nets Reduce Gender-Based Violence? How? The series is launched with that aim that these be living documents. In that spirit, the team welcomes suggestions on materials and topics to be covered in the future series that can serve as useful, practical references for practitioners of social protection. The series is a joint initiative by Innovations for Poverty Action and the World Bank’s Social Protection and Jobs Global Practice comprising Nathanael Goldberg, Lauren Whitehead, Savanna Henderson, Ana  Alatriste Tamayo, Julie Kedroske, Ugo Gentilini, Yuko Okamura, Mohamed Almenfi, Hrishikesh TMM  Iyengar, and Mia Blakstad. For any questions regarding this brief, please reach out to socialprotection@poverty-action.org and ugentilini@worldbank.org © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: +1 (202) 473 1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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