Uncovering New Methods: Cash Aid in Zambia
In order to alleviate poverty, Zambia piloted a unique program with incredible results. In a trial run of the effectiveness of cash aid, the Zambian government gave the poor money—with no strings attached—and found that cash aid in Zambia dramatically improved the lives of its recipients.
Cash aid in Zambia is part of a greater change in thought regarding how best to help the poor. Since the early 2000s, some of the poor—beginning first in Latin America—have received conditional and unconditional cash transfers that have supported households throughout the developing world.
Zambia launched its trial cash aid program to determine how effective it would be to give the poor money. The study spanned the course of five years, during which 5,500 Zambian households were given a total of five million dollars.
Zambian officials were interested in determining not only whether recipients of cash aid spent their money responsibly, but also whether the money was used productively. The answers to these questions were a resounding yes.
This trial, as well as other studies, have showed that cash aid can be just as effective, or even more so, at alleviating poverty than more traditional methods, such as job training or food. Those that received cash aid became entrepreneurial and the benefits of this spilled over into the local economy.
Ashu Handa, the researcher and professor behind the Zambian pilot program, found that the recipients of cash aid boosted their spending by over 50 percent of the original amount they received from the government. This in turn helped businesses, who also saw their profits increase by 50 percent.
For a country like Zambia where poverty is widespread, cash aid could dramatically improve the lives of the poor. 64 percent of Zambians live below the poverty line and this percentage becomes even greater in rural areas.
The Zambian government recognized the impact of this program and is eager to extend coverage to the entire nation. However, the nationwide version comes with its own catch—only those that truly cannot work, like the elderly or the sick, will be eligible to receive cash aid.
Opponents of cash aid claim that it encourages laziness; that the poor would only spend money on vices and the money would be devoured in a “bottomless pit.” This assumption, that research has proven wrong, would leave many families—able-bodied, two-parent households—ineligible for the cash aid that could change their lives.
Regardless, cash aid in Zambia has had a tangible impact on the poor and could continue to promote a better quality of life for many in this African country, as well as in other parts of the developing world.
– Jennifer Faulkner