Selective inclusion in cash transfer programs: Unintended consequences for social cohesion

Abstract

Debates over universal versus selective or targeted provision of benefits in social protection programming have gained traction in recent years. In some cases, poverty targeting has been found to benefit communities, creating positive economic spillover effects even for non-recipients. However, targeted programs can also reconfigure social relations, carrying a social stigma that bifurcates communities. Drawing from rich qualitative data from a cash transfer program in Chad, we explore both the economic and social implications of targeting in cash transfer programs in contexts with widespread poverty. We find significant positive economic effects on non-beneficiaries. At the same time, not only does participation engender considerable social costs, but several punitive and economic costs arise for recipients as a result of their inclusion in the program, with repercussions for the transfer’s productivity. We conclude that in contexts where everyone is poor, targeting can create new fissures within a community, stemming from a combination of jealousy and skepticism with regard to the perceived deservingness of transfer recipients vis-à-vis other village inhabitants. When budgets are insufficient to cover all poor, the positive effects of cash transfer programs may be enhanced by reducing the geographic focus of social safety net programs to ensure all inhabitants can access benefits.