TY - JOUR
T1 - What Would Happen to Poverty in Africa if Most Aid Were Delivered as Social Cash Transfers?
T2 - A Case Study of Uganda
AU - Ulrich, Jacob
AU - Kavuma, Susan
AU - Asiimwe, Wilson
AU - Yave, Bruno
PY - 2024
Y1 - 2024
N2 - This article explores the potentially game-changing idea of repurposing a
major part of overseas development assistance (ODA) to fund the
up-scaling of social cash transfers (SCTs) in Africa. The analysis
contributes to the debate about how best to use global development aid
by considering the idea of simply bypassing the aid industry and instead
giving most funds directly to the poor. With Uganda as a case study, we
use the UGAMOD microsimulation model to analyse the socio-economic
impact of using a major part of the current aid envelope, which for
2017–2020 was on average 2.37 billion USD, to provide two types of SCTs,
namely old-age pensions and child grants. The scenarios analysed
include both universal and means-tested SCTs at different cost levels,
ranging between 4 and 115 per cent of current annual ODA in Uganda. We
demonstrate that allocating a major part of ODA to SCTs would, seen in
isolation, lead to very considerable reductions in poverty. In one
tested scenario, where most ODA is allocated for universal child
support, it is predicted that about two-thirds of current poverty would
be eliminated. Importantly, however, large-scale SCTs would also come
with significant socio-economic allocation costs, as aid is shifted away
from its current uses, much of which goes to the social sectors. We
discuss what this may imply for government revenue generation and the
timing of any potential scaling of SCTs. Lastly, we note that scaling of
SCTs would have political economy implications, which would need to be
better understood.
AB - This article explores the potentially game-changing idea of repurposing a
major part of overseas development assistance (ODA) to fund the
up-scaling of social cash transfers (SCTs) in Africa. The analysis
contributes to the debate about how best to use global development aid
by considering the idea of simply bypassing the aid industry and instead
giving most funds directly to the poor. With Uganda as a case study, we
use the UGAMOD microsimulation model to analyse the socio-economic
impact of using a major part of the current aid envelope, which for
2017–2020 was on average 2.37 billion USD, to provide two types of SCTs,
namely old-age pensions and child grants. The scenarios analysed
include both universal and means-tested SCTs at different cost levels,
ranging between 4 and 115 per cent of current annual ODA in Uganda. We
demonstrate that allocating a major part of ODA to SCTs would, seen in
isolation, lead to very considerable reductions in poverty. In one
tested scenario, where most ODA is allocated for universal child
support, it is predicted that about two-thirds of current poverty would
be eliminated. Importantly, however, large-scale SCTs would also come
with significant socio-economic allocation costs, as aid is shifted away
from its current uses, much of which goes to the social sectors. We
discuss what this may imply for government revenue generation and the
timing of any potential scaling of SCTs. Lastly, we note that scaling of
SCTs would have political economy implications, which would need to be
better understood.
KW - Africa
KW - Aid policy
KW - Economic modelling
KW - Innovative aid
KW - Scaling of social cash transfers
KW - Social cash transfers
KW - Uganda
KW - Africa
KW - aid policy
KW - Economic modelling
KW - Innovative aid
KW - Scaling of social cash transfers
KW - Social cash transfers
KW - Uganda
U2 - 10.1080/08039410.2024.2328031
DO - 10.1080/08039410.2024.2328031
M3 - Journal article
AN - SCOPUS:85188248321
SN - 0803-9410
VL - Latest Articles
JO - Forum for Development Studies
JF - Forum for Development Studies
ER -