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Cash Transfers and Social Capital: Evidence from a Randomized Controlled Trial in Malawi

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  • Hiwot Mesfin
  • Francesco Cecchi

Abstract

We examine the social capital implications of conditional and unconditional cash transfer (CCT) programs in Malawi, randomly assigning adolescent women and their households to either program or to a control group. Our results show that cash transfers have a positive aggregate effect on social capital, proxied by trust and gift giving. They also show positive intention-to-treat effects on both trust and gift giving in the short run but a negative spillover effect on gift giving in the long run. Moreover, we find that CCTs have greater positive effects on trust than the unconditional cash transfers (UCT). Further analyses reveal that adolescents with initial reciprocal beliefs drive the increase in trust. These results contribute to the current debate on whether CCTs or UCTs are better policy tools, adding the important ‘externality’ of social capital formation.

Suggested Citation

  • Hiwot Mesfin & Francesco Cecchi, 2024. "Cash Transfers and Social Capital: Evidence from a Randomized Controlled Trial in Malawi," Journal of African Economies, Centre for the Study of African Economies, vol. 33(4), pages 411-434.
    • Handle: RePEc:oup:jafrec:v:33:y:2024:i:4:p:411-434.
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    File URL: http://hdl.handle.net/10.1093/jae/ejad017
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    More about this item

    Keywords

    Social capital; Reciprocal beliefs; Social protection; Conditional cash transfer; Unconditional cash transfer; JEL classification: O12; C93; D62;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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