Corruption prevention strategies in cash transfer schemes

Query

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Purpose

Our agency is looking at practical challenges to scaling up cash transfer programming, but also at making the case that these programmes can be effective interventions for reaching the poorest cost-effectively.

Content

1. Benefits and challenges of cash transfer schemes
2. The impact of cash transfer schemes on corruption
3. Corruption mitigation strategies in cash transfer schemes
4. References

Summary

Cash transfer (CT) programmes have been promoted as a cost effective intervention for poverty alleviation as well as a quick fix to problems of endemic corruption.

While several studies indicate a positive effect on poverty reduction, especially with regard to health and education outcomes, evidence remains inconclusive on the impact of such approach on citizen and women’s empowerment and the development of civil society, all factors that can affect levels of corruption in the long term.

Little is known to date on the actual impact of such interventions on corruption, the quality of governance and political processes more generally. In the absence of a systematic evaluation of the effects of CT on corruption, there is no conclusive evidence that these are more prone to corruption than payments in kind. Some studies even point to the potential of CT programmes in reducing levels of administrative corruption provided appropriate safeguards are in place. The suggested safeguards include simple and transparent targeting criteria, automated and robust delivery mechanisms, participatory monitoring and oversight, and the introduction of effective complaint mechanisms for stakeholders to report irregularities.

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