An Assessment of the Socio-Economic Impact of Cash Transfers: A Comparative Study of Kenya and Malawi between 2008 And 2014

Cash transfers have increasingly been regarded as best practice for social protection mechanisms in developing countries. In Kenya, the pilot program of cash transfer introduced in the year 2004 focused on Orphans and vulnerable children with the aim of mitigating the effect of Acquired Immuno Deficiency Syndrome (AIDS) and Human Immuno Virus (HIV) on children in the nation. In Malawi, the Social Cash Transfer was rolled out in 2006 on a pilot basis in response to chronic hunger and poverty faced by households in the country. Cash transfers in Kenya and Malawi have a number of similarities. Notably, the overarching objective of poverty reduction. However, there are significant differences in the design and targeting of programs in the two countries. In addition, cash transfer programs in Kenya are largely government funded while Malawi‟s Social Cash Transfer program is donor funded. This study aimed at comparing cash transfers in the two countries and analyzing the effects of differences in funding and design have had on the success of programs implemented. The study was grounded on Anthony Giddens‟ social investment theory that argues for active social investments by the state in the welfare of society. The interrelationships between variables in the study has been captured in the conceptual framework. The study found that cash transfers in Malawi resulted in higher consumption and investment within beneficiary households. Similarly, programs in Kenya had positive impacts on investments. However, programs in Kenya did not significantly affect consumption levels of households. The study also revealed that CT programs did not have positive impacts on health. They did however positively influence enrollment in school in both Kenya and Malawi. The study recommends increased government commitment in the design and funding of programs especially in Malawi. Governments also need to accompany CT programs with investments in social infrastructure such as schools and hospitals to increase the effectiveness of the programs. The thesis recommends further research into the influence of donor funding on the design and implementation of cash transfer programs.