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Materials on Development Financing - The design and management of cash transfer programmes: an overview No. 3, March 2015

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Introduction

Cash transfers are increasingly recognised as an important tool for tackling poverty and inequality in developing countries, with many implementing large-scale cash transfer programmes aiming to offer comprehensive access to social security.
There is significant evidence of the positive impacts of these programmes on human, social and economic development.1 Increasing attention is now being paid to issues of service delivery quality, value-for-money, risk management, and accountability within these schemes, which are particularly important when governments seek to scale-up small, successful programmes or reform under-performing large-scale schemes.

Often, however, inadequate attention is paid to the design of systems for the effective management of programme operations, in other words the detailed translation of policy into practice. In many large-scale programmes, key business processes are poorly defined and, as a result, inconsistently applied. Insufficient emphasis on the operational design and implementation of programmes can lead to poor service delivery, which, in turn, may undermine the achievement of programme objectives.
Indeed, beneficiaries can be exposed to abuse and exploitation, funds may be expropriated by programme implementers and operating budgets can spiral out of control, thereby undermining the value-for-money case for cash transfer programmes.

This paper describes and explains the operations of cash transfer schemes, outlining good practice in the design processes required to operationalize policy-level design principles. It describes the four key components comprising the administrative structure of most cash transfer programmes and, based on international experience, provides a brief analysis of the issues, options and risks associated with each component based. The paper goes on to describe a number of critical organizational policies and systems that are required to ensure good quality implementation of the four core operational processes.

The authors are Stephen Barrett and Stephen Kidd. Stephen Barrett is a Social Protection Policy and Programming Specialist with wide experience in the design and implementation of large-scale social assistance programmes. He is a Senior Adviser on Social Protection to the Government of Rwanda and previously worked on the Expanding Social Protection Programme of the Government of Uganda, where he oversaw policy development and the implementation of the Social Assistance Grants for Empowerment (SAGE) cash transfer scheme. Stephen Kidd is a Senior Social Policy Specialist at Development Pathways, with over 10 years experience advising on social security policy and programme design and implementation across a wide range of countries in Africa, Asia, the Pacific and Latin America.
KfW commissioned Stephen Barrett and Stephen Kidd through Development Pathways for this paper. The views expressed in this paper are those of the authors and not necessarily of KfW.