Cash Transfers' Poverty Fight Faces Political Risks in Global South
Cash transfers, a poverty alleviation tool, are gaining traction in the Global South. However, recent political shifts and funding cuts raise concerns about their unintended consequences.
Cash transfers boost household consumption, asset ownership, and human capital. They also stimulate aggregate demand. NGOs like the Gates Foundation independently run these programmes, supporting healthcare and disease prevention efforts. Egypt's Takaful and Karama programme, despite positive marginal effects, has limited overall impact and risks legitimising a repressive regime.
Donor funding, though beneficial, can unintentionally reinforce autocratic rule. Most Global South countries operate donor-supported cash transfer programmes. However, these programmes can be manipulated for regime legitimation, patronage, or electoral purposes. The aid sector's current flux, with shrinking budgets and geopolitical competition, may limit donors' ability to consider political ramifications in recipient countries.
Cash transfers, while effective in poverty alleviation, pose political risks. Donors and implementers must navigate these challenges, ensuring programmes benefit the poor without inadvertently supporting oppressive regimes.
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