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Thursday, 18 September 2008

Zambia Social Cash Transfer

This is the website that Namugala hopes you never get to visit. Contrary to what Namugala claims, the cash transfer is exactly what it says...a cash transfer, not a food transfer. In fact if Namugala actually understood the program, she would know that the most attractive thing about the scheme is that cash transfers are more economically efficient. Here is how the website explains why cash transfers are better than in-kind transfers:

Even though both concepts arise from the same principle of supporting extremely poor households, they do differ in many regards. First and foremost, cash transfers have the advantage of permitting beneficiaries to use the money flexibly on their own priority needs unlike in-kind transfers that prescribe to the beneficiaries what to consume. In that sense, cash transfers empower beneficiaries to make their own choices and don’t give them the feeling of being patronized. Cash transfers also inject cash into local markets and the community, whereas handouts may even distort prices and disadvantage local markets. Although the costs for setting up a cash transfer scheme might in some cases be higher, the running costs are definitely much lower due to the minimal logistical costs.
And therein lies the irony, RB and Namugala want to corrupt people, and they cannot even do it through cash as the Social Cash Transfer scheme advocates! Corruption is bad, but it is even worse when done through sugar because it limits people's choice set. In short, RB and Namugala practised the worst form of corruption. But of course when someone wants to corrupt, welfare is the last thing they think about. Its much easier to hide corruption through food and pretend you just practising charity.


Update (19/08/2008):

We now have Rupiah Banda's speech, which clearly shows he was campaigning while giving the food. So not only do we know that the "cash transfer" is about cash, we also know that RB himself says : "It is indeed a great pleasure to have you all here today at this very important occasion of meeting the beneficiaries of Social Cash Transfer Scheme as well as making a small donation to them". He wanted to make a donation in addition to the program.

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