Effectiveness of pro-poor interventions on wealth accumulation and household engagement in income generation in Malawi

Abstract

The purpose of this study was to evaluate the effectiveness of pro poor interventions with a special focus on wealth accumulation and diversity in income generating programs. The study used a Recursive Bivariate Probit model. The study used secondary data gathered by the Local Development Fund (LDF) in 2020 which drew a sample of 1396 households (868 beneficiaries, 528 non-beneficiaries). The study finds that participation in Livelihoods and Skills Development (LSD) programs significantly improved household asset accumulation by 14.8% and petty trading by 31.8%. Participation in Public Works Program (PWP) significantly improved asset accumulation by 17.7%. The study therefore concludes that the LSD program is more effective in helping households accumulate assets and engage in trade activities that result in improvement of income. Since the study demonstrates that the LSD program is more successful in assisting households to accumulate assets and participate in trade activities, the government should consider implementing a graduation model that extends the LSD's financial trainings to PWP and Social Cash Transfer (SCT) groups.