Social protection has become one of the most widely used tools in international development. Alongside education and healthcare, infrastructure investment, employment creation, agricultural support, financial inclusion, public works and humanitarian assistance, it helps governments and development organisations address poverty and protect people from economic, social and environmental shocks. Social protection commonly includes labour-market interventions, social insurance and social assistance. Cash transfers are now one of the most prominent forms of social assistance because they provide resources directly to individuals and households, allowing recipients to respond to their own priorities.
Yet cash transfers are not all the same. A modest monthly payment intended to support food consumption differs from a large lump sum intended to finance an investment. This distinction has become increasingly important as policymakers consider whether larger transfers can do more than provide temporary relief-whether they can help households escape poverty traps and become more resilient to climate-related shocks.
From informal support to modern social protection
Before formal social-protection systems emerged, families, communities, religious institutions and mutual-aid organisations supported people experiencing illness, unemployment, disability, old age or destitution. These arrangements were valuable but often localised and unable to protect entire populations against widespread crises. Modern state-led social protection initially developed through contributory insurance linked to formal employment. These programmes protected workers against risks such as sickness, workplace injury, disability and old age.
During the twentieth century, social protection gradually expanded beyond workers in formal employment as governments accepted greater responsibility for people who could not contribute to insurance systems. This expansion was especially important in low- and middle-income countries, where informal employment, subsistence agriculture, unemployment and unpaid care work left much of the population outside contributory schemes. Governments increasingly relied on food subsidies, school feeding, public works, emergency relief, agricultural-input support and targeted assistance to poor households.
During the economic crises and structural-adjustment reforms of the 1980s and 1990s, these measures were often described as “social safety nets”. Initially, they were viewed mainly as temporary protection against economic reforms and emergencies. Over time, however, social protection came to be understood as a longer-term development instrument that could reduce poverty, build human capital and help households manage risks throughout their lives.
Mexico and the rise of large-scale cash transfers
A major turning point came with the introduction of Mexico’s Programa de Educación, Salud y Alimentación, commonly known as PROGRESA, in 1997. PROGRESA is widely regarded as the first major national conditional cash-transfer programme of the modern era. It provided regular payments to poor households, generally through women, on the condition that children attended school and household members participated in specified health and nutrition activities. The programme sought to address current and future poverty simultaneously. Cash provided immediate income support, while the conditions were intended to improve children’s education, health and nutrition and thereby interrupt the intergenerational transmission of poverty. PROGRESA was large because it reached millions of households, not because each household received a large lump sum. Individual payments were relatively modest and regular. Nevertheless, the programme established cash transfers as a credible national development policy rather than a marginal form of relief. PROGRESA also placed rigorous evaluation at the centre of programme design. Its influence extended beyond Mexico, contributing to the expansion of conditional cash transfers across Latin America and later in Africa and Asia. Mexico’s programme was subsequently renamed Oportunidades and then Prospera, while Brazil consolidated several programmes into Bolsa Família.
At the same time, unconditional cash transfers expanded based on a different principle: people experiencing poverty generally understand their own needs and should be able to decide how additional resources are used. Conditions may also be inappropriate where schools, clinics and other services are unavailable or difficult to access. Monitoring compliance can be costly and may exclude those facing the greatest barriers. By 2015, around 130 low- and middle-income countries had at least one non-contributory unconditional cash-transfer programme, while 63 had at least one conditional programme.
From small regular payments to large lump sums
Most established cash-transfer programmes provide relatively small payments on a monthly or quarterly basis. Their main purpose is to stabilise consumption. They help families buy food, meet school expenses, access healthcare and avoid damaging coping strategies such as selling productive assets or withdrawing children from school.
Researchers and practitioners later began asking a different question: What happens when a poor household receives a much larger amount of money at once?
A modest regular payment may improve consumption but remain insufficient to purchase livestock, irrigate land, improve housing, acquire equipment or establish an income-generating activity. A larger lump sum may overcome this financial barrier. Evidence from Kenya, Uganda, Rwanda and other countries increased interest in substantial unconditional transfers. Evaluations examined whether they could improve consumption, savings, assets, income generation and psychological well-being without prescribing how recipients should spend the money.
Two economic ideas explain why a large payment might differ from a smaller regular transfer.
The permanent income hypothesis suggests that households receiving a one-off payment may save or invest part of it so that the benefits can be spread over time. Where formal savings options are limited, households may purchase land, livestock, housing materials or productive assets.
The poverty-trap or “big push” argument suggests that some households remain poor because they cannot accumulate the minimum assets needed to enter more productive activities. A sufficiently large transfer could help them cross that threshold and move towards a higher and more sustainable income level.
The systematic review
Our systematic review on The Impact of Large-Scale Cash Transfers in Low- and Lower-Middle-Income Countries: Poverty and Climate Resilience Outcomes, produced by The Research and Evaluation Centre—the REC—with funding from UK International Development, examined substantial one-off transfers in low- and lower-middle-income countries. The review defined a large one-off transfer as at least US$300, delivered in no more than three payments. Although its scope allowed for both conditional and unconditional transfers, no eligible evaluations of large one-off conditional transfers were identified. The findings therefore relate mainly to large one-off unconditional cash transfers. The review synthesised 19 impact-evaluation studies covering 15 interventions implemented between 2014 and 2024. Eighteen studies were randomised controlled trials, and one was quasi-experimental. Most interventions were conducted in Kenya, Uganda, Rwanda, Nigeria, Liberia and Malawi, with additional evidence from Lebanon. Mobile money was the most common delivery method, and follow-up periods ranged from one to 42 months.
The review examined poverty outcomes such as consumption, income, savings, assets, employment, business activity and food security. It also assessed irrigation, agricultural inputs, livelihood diversification and households’ capacity to cope with climate-related shocks. Livelihood diversification was treated as an outcome in its own right, but only three studies contributed evidence to the diversification meta-analysis. This evidence was assessed as very low quality.
What does the review tell us?
The clearest overall message is that large one-off cash transfers are helpful and effective for reducing poverty in the short to medium term, but generally not transformative on their own. They ease immediate constraints and improve consumption, food security, savings and assets, yet they rarely produce the deeper shifts in jobs, businesses, livelihood diversification or climate resilience that would amount to lasting transformation.
Consumption and income: Large transfers generally increased household consumption and expenditure. Recipients were better able to pay for food and other immediate needs. Household income also increased, but the improvement was modest. A large payment can strengthen a household’s financial position, but it does not necessarily create a permanent new source of income.
Assets and savings: Many households used part of the transfer to improve their homes or purchase durable goods. Others invested in land, livestock and smaller household assets. Savings also increased. The review does not show savings declining over time: its descriptive trajectory suggests that average savings effects were larger at later follow-up periods. This pattern should nevertheless be interpreted cautiously because it is based on simple averages across studies, and evidence beyond three years remains limited. Overall, recipients did not immediately spend the entire payment. Many converted part of it into savings or assets that could provide security or support future production.
Credit, employment and businesses: Access to credit remained largely unchanged. A cash transfer may reduce the immediate need to borrow, but it does not remove barriers such as a lack of collateral, credit history or accessible financial institutions. Employment also did not substantially increase. This does not suggest that recipients became less willing to work. Rather, cash alone may not create jobs where employment opportunities and productive markets are limited.The review also found little consistent improvement in business expenditure, survival or expansion. Some recipients invested in businesses, but cash could not overcome constraints such as weak demand, poor infrastructure, limited market access and insufficient business skills.
Food security: Food security was one of the clearest areas of improvement. Recipient households experienced less hunger and were better able to cope during periods of food scarcity. There were some indications of more varied diets, but too few studies measured dietary diversity consistently to support a firm conclusion.
Climate resilience: The findings were less conclusive. Some households invested in irrigation, and there were small increases in the use of seeds, fertilisers, tools and other agricultural inputs. However, the evidence base was small and generally of low or very low quality. Only three studies assessed livelihood diversification. Their pooled result was close to zero and not statistically significant, providing little evidence that transfers moved households into genuinely different livelihoods. The review also concludes that recipients often used transfers for livestock, seeds and farm tools, primarily reinforcing agricultural livelihoods in which they already operated.These investments may improve welfare or production, but they do not necessarily reduce climate risk because drought can affect crops, grazing land and livestock simultaneously.
Large transfers may therefore strengthen some foundations of resilience by increasing savings, assets and household consumption. However, cash alone does not consistently create climate-resilient livelihoods. Households also require climate information, infrastructure, extension services, appropriate technologies, insurance, market access and viable alternatives to climate-sensitive work. Livelihood support is therefore needed in two directions: to make existing activities such as farming and livestock production more productive and less climate-exposed, and to create realistic opportunities for genuine diversification into livelihoods affected by different risks.
Health, education and community effects
The review found no consistent average improvements in education or health during the follow-up periods covered by the studies. This does not mean such benefits are impossible. Education and health outcomes may take longer to emerge and also depend on the availability and quality of schools, clinics and other public services. There was also no clear community-wide economic boost. Recipients may spend money in local markets, but the available evidence did not show consistent benefits for non-recipients or surrounding communities.
What should happen next?
Use cash-plus approaches for resilience: When the objective is climate resilience, cash should be combined with support that addresses the constraints households actually face. This could include climate information, agricultural extension, drought-resistant inputs, irrigation, insurance, savings products, market connections or vocational training. The additional component should be tailored to the context rather than automatically adding generic training to every programme. Because transfers commonly reinforced existing agricultural livelihoods, programmes should support those activities through animal-health services, water and fodder access, improved inputs, storage, insurance, extension and market connections, while also opening viable pathways into less climate-sensitive work. The review did not provide enough evidence to determine which cash-plus combination works best, so these packages should be rigorously tested.
Deliver cash before predictable shocks: Timing matters. Payments aligned with lean seasons, planting cycles and early-warning systems may allow households to prepare for droughts or floods rather than merely recover afterwards. Anticipatory transfers can help families purchase food, protect livestock and avoid selling productive assets before a crisis becomes severe.
Preserve recipient choice: Large one-off transfers should generally remain unconditional. Conditions may be difficult and costly to monitor, particularly when services are inaccessible. Programmes can still offer voluntary financial guidance, savings mechanisms and connections to productive opportunities without prescribing exactly how recipients must spend the money.
Strengthen digital inclusion: Mobile money can reduce costs and speed up payments. However, people without phones, identification documents, network access or digital literacy may be excluded. Digital delivery should therefore include alternative payment options, accessible registration, effective complaints systems, data protection and support for recipients who require assistance.
Match the payment to the objective: Regular and one-off transfers serve different purposes. Regular transfers may be better suited to chronic poverty and recurring food, education or health expenses. Lump sums may be more appropriate for acquiring assets, improving housing, recovering from disasters or making productive investments. In some settings, combining a lump sum with smaller regular payments may protect consumption while an investment begins producing returns.
Future research considerations
Studies should follow households for more than five years to determine whether improvements in income, savings and assets last. More evidence is also needed outside East Africa, and future research should directly compare lump sums with instalments, cash with vouchers, and cash-only programmes with cash-plus approaches. Researchers also need consistent measures of climate resilience. Evaluations should examine whether households can anticipate shocks, protect assets, maintain consumption and recover more rapidly-not merely whether they purchased an agricultural input. Future studies should make livelihood diversification a clearly defined primary outcome and distinguish movement into genuinely new income sources from expansion of an existing activity, such as purchasing additional livestock. They should also test which complementary livelihood supports add value to cash.
Cash as part of a wider development strategy
The development of cash transfers-from conventional safety nets and conditional programmes to large unconditional payments-reflects an important change in development thinking. People experiencing poverty are increasingly recognised as decision-makers who can use resources purposefully. The review supports this view. Itsmain takeaway is that large one-off transfers are helpful and effective for poverty reduction, but generally not transformative on their own. They improve consumption, food security, savings and asset ownership. They provide breathing space and reduce immediate financial constraints.
But cash has limits. It cannot replace functioning institutions, reliable infrastructure, accessible public services, viable markets or effective climate policy. Large cash transfers should therefore be understood neither as a miracle solution nor as a temporary handout. They are a powerful development tool whose effects depend on their size, timing, purpose and the opportunities available to recipients. The future lies in using cash more strategically: protecting households’ immediate welfare while connecting them to the services, markets and institutions needed to build lasting and climate-resilient livelihoods. Because recipients often expand livelihoods they already know rather than diversify, lasting transformation requires complementary support that improves those existing livelihoods, reduces their exposure to climate risk and creates viable alternatives.
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