The Foreign Service Journal, November 2018

18 NOVEMBER 2018 | THE FOREIGN SERVICE JOURNAL USAID Tests Cash Transfers A recent experiment conducted by USAID made the news on Sept. 14 when The Atlantic published a story about the “A/B Test” in Rwanda to deter- mine which would be a more effective way to disperse aid and prevent malnu- trition: a “holistic” intervention involving education, donations and sanitation, or a simple cash transfer to each concerned household. In the $140 billion foreign aid sec- tor, the authors wrote, “donors rarely measure the effectiveness of individual programs, let alone weigh one interven- tion against another.” The authors lauded USAID’s willingness to look hard at its own effectiveness with traditional pro- grams as “unusual, and quite brave.” USAID released the results publicly in September. They showed that “neither the holistic intervention nor the smaller cash transfers moved the needle much on nutrition.” However, large cash transfers of approximately $530 per household made a significant difference, as those families were able to save 60 percent more while at the same time purchasing healthier, more varied foods for their families. Children in those households were taller and weighed more than children in other households. The results of the experiment show that cash transfers should be considered by donors when applicable, the authors argue. They also remind us of the need to consider the needs and desires of the recipients themselves when designing effective aid programs. n This edition of Talking Points was com- piled by Donna Gorman, Dmitry Filipoff and Shawn Dorman.