Home >politics >policy >Targeted cash transfer schemes can do more harm than good

Trying to alleviate poverty by distributing cash to poor households can harm the excluded households in the area, shows a World Bank paper by Deon Filmer, lead economist in the Development Research Group of the Bank, and others. The authors find that a cash transfer scheme in the Philippines led to greater demand by the beneficiary households for protein-rich perishable food items such as fish and eggs. However, this pushed up their local prices by 6-8%. Thus, the excluded households which did not receive any cash transfer had to substitute them with cereals. Consequently, these households witnessed increased stunting among children, i.e. deterioration in height-for-age. More worryingly, the authors’ calculations suggest that the negative effect on the height-for-age of non-beneficiary children exceeded the positive impact the cash transfer programme had for the beneficiary children. The impact of the scheme was long-term as effects were visible even 31 months after the transfer program had been in place.

Also Read: General Equilibrium Effects of Targeted Cash Transfers: Nutrition Impacts on Non-Beneficiary Children

Improvement in economic conditions is unlikely to curb the opioid epidemic in the US, according to research by Janet Currie and co-authors, economists with Princeton University. The opioid epidemic refers to the increasing abuse of such drugs, some legal and some illegal, often used as painkillers. Using county-level data on opioid prescription rates and employment-to-population ratios between 2006 and 2014, the authors conclude that opioid usage may allow some women to work who would otherwise not be working. They estimate that a 100% increase in opioid prescription led to a 5.2% increase in employment among women in counties with below-average education. No such effects were seen in the case of men. The study found that the overall impact of unemployment on opioid usage was ambiguous. While unemployment can drive people towards opioid addiction among other things, regular employment accompanied by employer-sponsored health insurance can also have the effect of sustaining such addiction.

Also Read: US Employment And Opioids: Is There A Connection?

Preference for the male child continues to be strong in India, though the silver lining is that a change in attitude is visible, shows an Economic & Political Weekly paper by Anjali Radkar, associate professor at the Gokhale Institute of Politics and Economics, Pune. The paper is based on the National Family Health Surveys conducted in 1992-93, 1998-99 and 2005-06. Among married women, the desire for at least one son fell from 90% in 1992-93, to 85.1% in 1998-99, and to 80.7% in 2005-06. The preference was seen to be lower among couples with higher education and economic status. An increase in daughters-only families has also been visible especially in cases where women are urban, educated, young, and currently working. Families that have adopted permanent methods of contraception after having had only daughters are termed as daughters-only families.

Also Read: Is Son Preference Weakening?

Much like in the case of manufacturing and assembly, foreign investments and creation of an international network has enabled developing countries to excel in horticulture exports, shows a recent report by Theodore H. Moran of the Center for Global Development. Citing the example of countries such as Kenya, Ethiopia, Colombia, etc., the paper states that by attracting and supporting large international firms and expatriate entrepreneurs, these countries could convert the domestic economy into an international horticulture market. Large international firms help push exports by providing the required capital access and technical expertise as well as reducing the challenges of meeting higher international standards. But while on the one hand the entry of international supply chains in horticulture has reduced poverty among regional farmers, it has also exposed some workers to insecurity, exploitation and hazardous working conditions.

Also read: FDI and Supply Chains in Horticulture

Public debt has risen in most poor countries, with 70% of low-income countries having higher fiscal deficits in 2017 than during 2010-2014, states an IMF blog-post by Tao Zhang, deputy managing director at the Fund. The build-up in debt in many countries is attributable to the sharp drop in commodity prices since 2014, which hit earnings of countries exporting minerals and agricultural produce. Natural disasters, including the ebola epidemic and civil conflict also worsened matters. The new build-up of debt threatens to reverse the reduction in indebtedness witnessed in the first decade of 2000s, partially owing to debt write-off by the richer countries and multilateral agencies. The situation would have been less worrying, had the new debt been accumulated to finance investment, hence boosting long-term growth prospects. However, that is not the case and in most countries, investments rose less than deficits, even falling in some cases.

Also Read: Managing Debt Vulnerabilities in Low-Income and Developing Countries

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