Making Sustainable Reductions in Extreme Poverty: A Comparative Meta-Analysis of Livelihood, Cash Transfer and Graduation Approaches
Moving people out of extreme poverty is challenging and costly since the poorest households tend to be physically and socially isolated, and face disadvantages across multiple dimensions. This paper compares the cost-effectiveness of three strands of social protection interventions:
- Livelihood development programs;
- Lump sum unconditional cash transfers (the transfer of a large sum of cash with no restrictions on use);
- Graduation programs (holistic suite of interventions encompassing consumption support, access to finance and coaching).
After screening, 48 programs are included in this review, some focused solely on the extreme poor, others reaching a broader set of beneficiaries. Annual household consumption or income gain as a proportion of total program cost was used as a benchmark indicator for cost-effectiveness across programs.
Overall, lump-sum cash transfers are found to have the highest impact-cost ratio, followed by livelihood and Graduation programs. However, Graduation approach has the most rigorous evidence of long-term (at least a year after end of intervention) impacts and is more consistent in producing positive changes than both livelihood approach and cash transfers. Graduation initiatives have higher cost-effectiveness than livelihood programs that have long-term impact estimates and target extreme poor.
There are only two cases of lump-sum cash transfers programs that target the extreme poor and measure long-term impacts. Additional evidence is needed to make a more robust comparison between the Graduation Approach and lump sum cash transfers in sustainable poverty reduction among the extreme poor.