+ eVouchers to the Food vs. Cash debate

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A new World Bank report seeks to answer one of the oldest questions in development aid: should we give cash, or food? To answer this question, they looked at most of the available evaluations, discovering that the evidence to date suggests that both cash and food have a similar impact, while cash tends to be cheaper.

At the end of the blog post, the author briefly mentions that “vouchers seem an underexplored modality, particularly as they can now, just like cash, be delivered through a range of technologies.” I was surprised that they did not look at the recent IFPRI study (analyzing a World Food Programme experiment), which did, in fact compare vouchers to both food and cash. This study also found that cash was cheaper than food, but that vouchers were even cheaper. As the Economist observed, the results suggest “a switch from universal subsidies to vouchers could be the most efficient way of boosting health as well as relieving poverty.”2014-05-12 11.03.03

Through my role managing eVouchers at Zoona, I participated in a pilot with the Government of Malawi and a local non-profit, AICC, which tested how e-vouchers could improve the efficiency of the Government’s seed subsidy program for smallholder farmers. The independent evaluation of the 2013/14 pilot found cost savings as well as a significant reduction in fraud versus the use of paper of vouchers.   We will be expanding the pilot this year and will have more results to share in mid-2015.

In countries that are pushing for financial inclusion and where subsidies are a large part of the economy, e-vouchers are an important tool. As an agrodealer in Malawi named Boston told me: “The e-vouchers must be used. In Malawi, we are moving toward e-money, and e-vouchers are part of that transition.”

Our experience with eVouchers, as well as the experience of many other programs worldwide, suggests that vouchers, especially delivered electronically, should be part of the food versus cash debate.

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