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© Markus Richter / Faculty of Sociology

About social cash transfers

What are social cash transfers?

Social cash transfers are a kind of social assistance - means-tested monetary public support of poor people - or (less frequently) pension-type benefits without means test. More precisely, social cash transfer programmes are publicly financed welfare programmes that provide regular non-contributory monetary payments for free, untied use to persons considered as poor and/or vulnerable. The best known types of social cash transfers are conditional cash transfers like the Brazilian Bolsa Família and social pensions. However, social cash transfers are not limited to these two models, but encompass a broad range of diverse programme designs.

In contrast to other uses of the term social cash transfers, we do not count public employment programmes (public works) as social cash transfers, unless they imply a guaranteed payment even if work is not available within a certain period of time (as under India´s Mahatma Gandhi National Rural Employment Guarantee Scheme). Most public employment programmes constitute a form of (low) wage payment, confined to a fixed term and basically depending on the availability of work, rather than a form of regular social assistance

The dataset FLOORCASH-Discourse and the publications drawing on FLOORCASH-Discourse include ideas on an Unconditional Basic Income. But the dataset FLOORCASH-SocCit and the publications drawing on FLOORCASH-SocCit do not analyse Unconditional Basic Income schemes because these are mostly small pilot programmes.

What makes social cash transfers a relevant object of study?

First, social cash transfers are new in the countries of the global South. Whereas monetary social assistance programmes were introduced in West and North European welfare states in the first half of the 20th century and turned into modern benefit schemes after World War II, social cash transfers are a comparatively young phenomenon in low and middle income countries (‘global South’). Only since the mid-1990s and increasingly since the early 2000s have social cash transfers been established in the developing and emerging economies on a broader scale. One type of social cash transfer programmes, in particular, conditional cash transfers, is acknowledged as a Southern innovation.

Second, social cash transfers are new instruments of development policy. Social cash transfers have increasingly been recognized, both among development agencies and among Southern governments, for contributing to poverty reduction and even promoting development at large. Until the 1990s, all major international organisations had misgivings about social cash transfers, but by the mid-2000s a global consensus had emerged that social cash transfers are a desirable new instrument of development policy. Some scholars maintain that social cash transfers have unleashed a ‘development revolution’ (Hanlon/Barrientos/Hulme 2010).

Third, social cash transfers are widely acknowledged for their positive impacts. Social cash transfer programmes have been widely acclaimed for contributing to basic social protection and to poverty reduction among the beneficiary populations. Impact evaluations suggest a broad range of further positive impacts in areas as diverse as education, health, nutrition, savings, investment, and empowerment. Thus, they have received attention in many different areas of social research and policy practice, such as disaster relief and provision for refugees. Not all social cash transfer programmes function equally well. There is research on the policy designs and the conditions that make for positive effects.

Fourth, social cash transfers have spread to most countries of the global South within a remarkably short period of time. Starting in the mid-1990s (and earlier in few cases) and increasingly since the early 2000s, social cash transfer programmes have expanded considerably - in terms of numbers of programmes, of beneficiaries and of numbers of countries with such programmes. As of today, three thirds of Southern countries have introduced one or more of these programmes. The wave of diffusion raises theoretical questions of explaining the rise.

Fifth, social cash transfers have turned into key institutions of social protection in the global South. Formal social security in the global South has long centred on the employed in the formal, mostly urban sector, with an emphasis on social insurance, and on privileged groups close to government. The majority - persons in the informal sector and in rural areas - remained excluded. As a response, during the 1990s, some countries like Mexico, Brazil and South Africa introduced more inclusive policies, relying especially on social cash transfers. Some systems of poor relief had already been introduced in colonial times. In the early 2000s, international organisations picked up the issue, with initiatives like the ILO's campaign "Social Security for All" launched in 2001, and activities by the World Bank, by HelpAge International and other international organisations. In the 2000s, social cash transfers mushroomed across the global South, both in low income and middle income countries, reaching considerable sections of the population and becoming a factor in national elections. The ILO Recommendation no. 202 (2012) on National Social Protection Floors eventually proclaimed the idea of basic social protection for everybody for the first time in history. All in all, the dramatic spread of social cash transfers over the last 15 years has thoroughly transformed the politics and the institutions of Southern welfare.