'We are all poor here’: economic difference, social divisiveness, and targeting cash transfers in Sub-Saharan Africa

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Abstract

Social transfer practitioners are familiar with the social divisiveness that transfers can inadvertently create. One manifestation of this potential divisiveness is the oft expressed opinion voiced in community meetings, or by key informants, that ‘we are all poor here’. This is more often than not articulated by respondents as a plain statement of fact, not as special pleading nor with undertones of victimisation. This paper examines the circumstances of small economic difference giving rise to the sentiment captured by ‘we are all poor here’, utilising income distribution data from three SSA countries to illustrate important cautionary features that arise for the workable scaling up of cash transfers in Sub-Saharan Africa. The paper focuses on differences in per capita consumption in the long tail representing up to 60 per cent of the population that typifies national income distributions in the poorest countries.
The paper first reprises the efforts made by practitioners to narrow down eligibility to cash transfers to the destitute or ultra-poor, often defined as those unable to attain even the minimum acceptable level of calorie intake from their own efforts. Both proxy indicators and the deployment of a 10 per cent cut off point to determine the scale of cash transfers are discussed. The paper examines inter-decile per capita consumption differences for Malawi, Zambia and Ethiopia as revealed by national budget surveys. These show that as a rule of thumb US$2 per capita per month separates the poorest decile from the next poorest decile in the income distribution, and US$9-10 per capita per month separates the poorest decile from the sixth decile.
It is deduced, first, that the sentiment ‘we are all poor here’ accurately reflects the very small differences in personal and family circumstances separating everyone falling within the bottom 50-60 per cent of per capita consumption in poor mainly rural SSA countries; second, that beneficiary selection in cash transfer schemes therefore occurs within a context of very close proximity in well-being, life styles, command over assets and income streams, and real material consumption of this proportion of the population; and, third, that these wafer thin differences in consumption capabilities are narrower still in rural areas than in country averages, since urban income distributions are always significantly less equal than rural ones.
Existing pilot cash transfers are examined in the light of these findings, and it is found that they are unable to achieve their destitution reduction goals without inevitably creating some proportion of ‘leapfrogging’ by recipients above the levels of per capita consumption of non-recipients in adjacent income deciles. Social divisiveness is explained by small economic difference. The findings place some doubt on the merits of the 10 per cent rule that has been used to establish cut-off points in pilot cash transfers in Zambia and Malawi (and most recently Kenya). Without intending to be definitive on such matters, it is pointed out that categorical targeting such as social pensions avoids social invidiousness because all citizens understand that if and when they reach the eligible age threshold, they, too, will be entitled to the benefit.
Original languageEnglish
Publication statusPublished - 2008
EventSocial Protection for the Poorest in Africa: Learning from Experience - , Uganda
Duration: 8 Sep 200810 Sep 2008

Conference

ConferenceSocial Protection for the Poorest in Africa: Learning from Experience
Country/TerritoryUganda
Period8/09/0810/09/08

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