Cash Transfer Programs in the Developing World

Posted in Projects

Helping people make the most of their money in with Behavioral Design for Cash Transfer Programs

 

Governments around the developing world use cash transfer programs—in which money, rather than goods, is given directly to people who need it—for social protection and to spur economic growth. Evidence shows that recipients spend the money on essentials like their children’s school supplies or investing in their small businesses. In short, cash transfers work.

The widespread adoption of cash transfer programs was a significant step toward reducing extreme global poverty. But there’s more we can do to design the way cash is delivered to account for how beneficiaries make decisions and take actions that are critical to improving their family’s situation. To meaningfully impact the lives of poor and vulnerable families around the world, social assistance programs must give people the cognitive support they need to make the most of the financial support they deserve.

That’s why together with the World Bank, we’re bringing behavioral innovations to cash transfer programs in sub-Saharan Africa in an initiative called Behavioral Design for Cash Transfer Programs.

Building on our previous work in Madagascar, Mexico, and Sudan, we’re focusing on light-touch design features to improve outcomes at little additional cost in six countries in the region. We’ll explore many useful and behaviorally-informed features, including goal-setting tools, more flexible payment schedules, the framing of cash, planning prompts, reminders, feedback on savings progress, and wallets for physically (and mentally) separating funds.

Behavioral Design for Cash Transfer Programs is generously supported by the Global Innovation Fund and will continue through 2021—but stay tuned for regular updates and insights.

Interested in learning more about applying behavioral science to cash transfer programs? Reach out to us: info@ideas42.org