- Light-touch behavioral interventions proved to be more effective at helping cash transfer recipients set and stick to future-oriented financial goals (and potentially improve livelihoods) than traditional financial literacy programs.
- Designing programs for people living in poverty struggling with prospective memory and scarcity can be combatted through behaviorally designed activities such as goal setting and accountability groups.
In South Sudan, where an estimated 82% of the population experiences poverty, ongoing conflict, persistent food insecurity, and recurring natural disasters make it even more difficult for people experiencing poverty to plan for the future. The SSSNP provides cash transfers to South Sudanese people experiencing poverty to both provide the necessary cash to support people in meeting their basic needs and strengthen economic resilience. While recipients have pressing short-term needs to spend their cash on, such as food, water, and transportation, they also have longer-term important goals they wish to work toward, such as expanding a business or improving their home. However, many recipients reported finding it difficult to use some of their cash transfer towards their future goals.
We worked with the World Bank and United Nations Office for Project Services (UNOPS) to understand the barriers recipients faced in identifying and spending their money in line with their longer-term goals, and then designed tools they could use to mitigate those barriers. We designed a goal-setting tool, prioritization activities, and budgeting envelopes that participants could use to plan for and spend their money in line with their goals.
In 2021, we completed a randomized controlled trial with 900 cash transfer recipients. Recipients that received the behavioral interventions were 4% more likely to have designated a priority purchase for their cash transfer, 6% more likely to spend in line with this priority, and spent 7% more of their cash transfer toward their priority when compared to the control group. These are all signs that the behavioral interventions have supported recipients in not only setting concrete goals, but taking actions that align with them.
This project provides promising results that behavioral interventions are a cost-effective way of supporting cash transfer recipients set and stick to financial goals. Cash transfers are a key instrument in the fight against global poverty, and these findings can be used to increase the impact of existing cash transfer programs and improve the lives of those living in poverty, even when governments and NGOs have limited resources to support them.