Unconditional Cash Transfer Programs and Spillover Effects on the Local Economy : Evidence from Mali

Extreme poverty reduction in sub-Saharan Africa is challenged by the region’s high population growth, climate change, and armed conflicts. These recent years, social safety net programs have been considered as development policy tools to address poverty and improve households' welfare. However, despite the growing interest in social safety net policies, impact studies do not look at all aspects of the contribution of cash transfer programs. This study attempts to fill in the gap by providing more comprehensive insights into the role of unconditional cash programs in the West African context. Many methodological approaches were applied. The first essay which investigates the causal relationship between the Unconditional Cash Transfers (UCT) program and school-aged children’s time allocation showed that the program increases girls' school enrolment at primary school by 4.3 percentage points. The second essay concludes that conflict has a negative and statistically significant effect on the probability of use and expenditures on fertilizers, pesticides, and machinery. However, the cash program has no significant impact in mitigating the negative effects of conflict. The third essay analyses whether the Income Generating Activities (IGAs) as UCT exit strategy contribute to keeping households out of poverty after leaving the program. Findings mainly indicate that animal fattening and rearing as IGAs are more likely to increase the household consumption per capita than those who choose no IGA. The two last essays show that the program has a multiplier effect on the local economy, and generates a positive welfare effect for non-beneficiary households. As a policy implication, social safety nets should be scaled up and supported as part of governments' development agenda and strategies.