Behavioural Insights for Cash Transfers
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Investment Overview
Funding of $4.62 million (a grant of $2.22 million awarded in 2017, followed by a subsequent $2.4 million awarded in 2020) to design, implement, and test ‘nudges’ to encourage recipients of cash transfers to work towards productive goals and to invest towards better outcomes for their families. The grant will also be used to support country governments and the World Bank to embed nudges into government social protection programmes providing vital safety nets for the poorest households.
The Development Challenge
Almost every developing country has a diverse set of safety net programmes and other social protection measures, in particular conditional and unconditional cash transfers. The World Bank estimates that safety net programmes in developing countries lift an estimated 69 million people from absolute poverty each year, a substantial contribution in the global fight against poverty. Early childhood and productive inclusion-focused cash transfers in particular have demonstrated success in Latin America and Sub-Saharan Africa, and in recent years, the adoption of programmes like this by governments across the developing world has led to a search for ways of making them more cost-effective. While countries have designed cash transfer programmes in different ways, these programmes still do not account adequately for the recent body of research that shows that understanding of psychology and other social science disciplines can inform the effectiveness of government programmes. Applying insights from the growing literature on behavioural science has the potential to bring about significant additional cost-effective impact by minor adjustments to programme features to “nudge” beneficiaries on their decisions and actions.
The Innovation
ideas42 use a problem-driven process to understand drivers of behaviour and draw from the behavioural science literature to design nudges which may enhance decision making. The ideas42 team will analyse each country’s cash transfer programme to define problems, diagnose the behavioural constraints, and design/test/scale solutions which include framing or labelling, timing, goal-setting and plan-making. The impact of these nudges is rigorously evaluated and findings will be disseminated to the World Bank, country governments, and other stakeholders, as well as adding to the evidence base for the effectiveness of nudges in CT programmes and building the case for their adoption at scale.
Our Investment
The objectives of GIF support are:
To use a lean design process to customise and field test behavioural interventions in existing social protection cash transfer programmes focused on productive inclusion or human development outcomes in up to eight countries.
To generate and disseminate evidence on the innovation across a wide spectrum of programmatic contexts.
To help build capacity and support for this process and its scale-up within departments of the World Bank (the Social Protection and Labour Global Practice, Africa Region, and the Mind, Behaviour and Development team (eMBeD)), the global cash transfer community of practice, and the respective country governments.
Investment Objective
Enable ideas42 to partner with government social protection agencies and the World Bank to deploy a problem-driven approach to implement behavioural design interventions in social protection cash transfer programmes in at least five countries. Rigorous evaluation will test the impact of behavioural additions on productive inclusion and human development outcomes, and ideas42 will support the capacity of the World Bank and local governments to apply these methods and scale proven approaches.
Why we invested
An innovative idea on maximising the effectiveness of a major source of development spending.
The potential for generating additional impact from programmes proven to benefit millions of poor people.
Cost-effectiveness – with behavioural nudges, it is possible to generate disproportionately higher impact outcomes.
A direct route to scale through partnership with the World Bank, which offers the ability to integrate interventions into existing large-scale social assistance programmes.
Strong commitment to generating and disseminating evidence to demonstrate the effectiveness of the innovation.
A strong and credible team, with expertise in integrating behavioural interventions into development programmes.
Behavioural Insights for Cash Transfers in numbers
In GIF grants awarded
Behavioural Insights for Cash Transfers Impact Brief
Introduction
ideas42 are a non-profit organisation using behavioural science to address complex social problems. One very promising focus of their work is the design and implementation of innovative solutions rooted in behavioural science to increase the effectiveness and efficiency of cash transfer programmes targeting the poorest households.
Over the past twenty years the number and coverage of social protection programmes with a cash transfer component in developing countries has rapidly expanded. This expansion was further accelerated by the pandemic. Such programmes provide safety nets for millions of people and help to lift them out of poverty. ideas42 uses a problem-driven process to understand the drivers of behaviour of cash transfers recipients. They then draw upon behavioural science literature to design cost-effective nudges, or minor adjustments to social protection programmes, which may enable people to make better use of the transfers they receive. If these nudges are effective, they could be easily scaled and adapted for programmes across Sub-Saharan Africa.
Use of GIF Funds
In 2017, GIF awarded a $2.22 million grant to ideas42 to partner with the World Bank’s Social Protection and Jobs Global Practice and the social protection agencies of Kenya, Tanzania, Ghana, and other countries to develop and test behavioural enhancements to their cash transfer programmes. A follow-up grant of $2.4 million was awarded in 2020.
Objectives
To enable ideas42 to partner with social protection agencies within governments in sub-Saharan Africa and the World Bank’s Social Protection and Jobs Global Practice to deploy a problem-driven approach to implement behavioural design interventions in social protection cash transfer programmes in at least five countries. Rigorous evaluation will test the impact of behavioural additions on productive inclusion and human development outcomes, and ideas42 will support the capacity of the World Bank and local governments to apply these methods and scale proven approaches.
Implement the innovation in ongoing social protection cash transfer programmes focused on productive inclusion or human development outcomes in Kenya, Tanzania, and five other countries by using a lean design process to customise and field test behavioural interventions.
Generate and disseminate evidence on the innovation across a wide spectrum of programmatic contexts in Kenya, Tanzania, and four other cash transfer programmes.
Build capacity of the staff of the World Bank Social Protection and Jobs Global Practice and the national Implementing Agencies, and produce key resources to equip them to initiate and scale the innovation.
Facilitate the adoption of the innovation and its integration in processes within the World Bank’s ongoing and new social protection programmes.
Impact to Date
ideas42 have refined and finalised behavioural nudge designs for cash transfers through co-creation with the World Bank and government implementation bodies. The designs encompass a self-affirmation activity, social norms poster, partitioning pouch, and goal-setting and plan-making exercise. In Kenya and Tanzania, ‘lab in the field’ evaluations, randomised at the individual level (and therefore not immune from spillover effects) for 900 beneficiaries have been completed, with the control group receiving an informational intervention about ‘the importance of saving’ as an alternative to the nudge. Key results one month after the intervention include:
Intention to invest: Intention to invest is measured in terms of having a productive goal. The reported productive goal increased in both Kenya (by 7pp or 9%) and Tanzania (3pp or 3%)
Saving: Savings are measured in two ways – first, incidence of savings, and second, actual amount of the transfer saved. In Tanzania, the incidence of savings increased (8pp or 13%). In Kenya, the results showed no significant increase in the incidence of savings but a marginal (but high magnitude) significant increase in the amount saved (5pp or 41%).
Productive investments: In Tanzania, the results show an increase in incidence of productive investment (5 pp or 8.9%). While results are suggestive of positive effects, there are no other conclusive outcomes.
Household vulnerability: In Kenya, the results show a significant increase in complete repayment of debt within a month (14pp or 60-70%).
Overall, based on the one month follow-up results of the trial, we observe that in both Kenya and Tanzania beneficiaries are setting productive goals and increasing their savings (in anticipation of the productive goal planning). Short-term results are encouraging and demonstrate that the intermediate behaviour change necessary for long-term outcomes were facilitated by the nudges. A cluster randomised controlled trial is now underway in Tanzania which will look at effects after 6 months.
This builds on evaluation undertaken in Madagascar’s Human Development Cash Transfer Programme (not funded by GIF). This multi-level, multi-arm randomised controlled trial with a sample of more than 6,000 households was conducted 12 months after the intervention, with positive impacts observed across some combinations for income, likelihood of repaying loans, food security, as well as expenditure on education and adoption of positive parenting behaviours.
In 2020, ideas42 completed a baseline for a more rigorous cluster randomised trial in Kenya, but subsequent intervention roll-out was disrupted mid-way by Covid-19. ideas42 pivoted to conduct Computer Assisted Telephone Interviews with some significant results for those who received the intervention on goal setting, savings, productive investment, and income received from other sources.
ideas42 have closely engaged with partners in Kenya, Ghana, and Tanzania to strengthen their ability to apply behavioural principles in their work, especially in pandemic response. All processes from design, user-testing, to randomised trials were co-designed and co-delivered. ideas42 also conducted workshops for government agencies, for example, as part of the World Bank Financial Literacy Workshop in Kenya.
To facilitate easy application of behavioural science to cash transfer programmes, ideas42 have generated several public goods including a checklist tool for practitioners to design behaviourally informed programmes, a policy paper on learning and results to date, a guidance note and infographic on applying behavioural insights to social protection cash transfers in emergency responses, and presentations to document processes. ideas42 further developed key operational tools such as training and facilitation manuals, and testing procedure documentation.
To date, ideas42 has reached 12,170 recipients with behavioural nudges integrated in cash transfer programmes, and, as a result of the work under this grant, 13 new social protection programmes have expressed interest in adopting behavioural insights.