A Regional Multiplier Approach to Estimating the Impact of Cash Transfers on the Market: The Case of Cash Transfers in Rural Malawi

Abstract

This article analyses the impact on the local economy of an emergency cash–transfer programme in rural Malawi. The results are of interest, given the growing use of cash transfers as development aid as well as the increasing popularity of such transfers as a form of social protection across sub–Saharan Africa. It uses a form of social accounting matrix to show that there are widespread benefits for the regional economy as a whole (with multiplier estimates of 2.02 to 2.45), especially during the most ‘lean’ periods of the year, and for small farmers and small businesses in particular, as this is where poorer households' purchases are focused; education and health also benefit.

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