Dan Banik and Ugo Gentilini discuss the growing popularity of cash transfers, the evolution of conditional and unconditional forms, logistical and structural challenges of social protection programs, and how the governments used cash transfers to provide quick relief during the COVID-19 pandemic.
Cash transfer schemes have grown in popularity in many parts of the world in the past few decades. Numerous studies find that cash transfer programs can be one of the most effective social protection tools at our disposal in the fight against poverty. There is now also growing empirical evidence of how cash transfers can provide quick relief during major economic crises. In addition to economic effects, they may change gender hierarchies and improve the position of women in local society, increase school attendance, and improve nutrition. It is therefore no surprise that cash transfer programs have been warmly embraced by many civil society organizations and international agencies. But is it all win-win? What works and what does not, and how can cash transfers be made even more effective as a tool for global development?
Ugo Gentilini is an economist and the global lead for social assistance at the World Bank. He has worked extensively on the analytics and practice of social protection, including in relation to economic crises, fragility and displacement, and resilience and disaster risk management. He also writes a popular weekly newsletter and is my go-to-person on everything to do with social protection. In a new paper — Cash Transfers in Pandemic Times — Ugo combines analysis of large datasets with a review of about 300 pandemic papers, evaluations, and practical experiences and concludes with 10 lessons from the largest scale up of cash transfers in history. Twitter: @Ugentilini
Key highlights
Introduction – 0.48
Definition and understanding of cash transfers – 3.46
Increased interest in cash transfers – 6.15
Evolution of conditional and unconditional cash transfers – 14.38
Challenges and benefits of cash transfers – 19.33
What works, cash transfers and in-kind transfers - 25.36
Logistical and structural challenges of cash transfers - 31.00
How the pandemic has changed cash transfers – 40.10
Cash transfers going forward and advice for the future – 43.42
Host:
Professor Dan Banik, University of Oslo, Twitter: @danbanik @GlobalDevPod
https://in-pursuit-of-development.simplecast.com/
Banik Ugo, it's lovely to see you. I've enjoyed reading your work over the years. Welcome to the program.
Gentilini Thanks for having me Dan, big fan of your show.
Banik Let’s get cracking Ugo. There's so much attention on cash transfers these days, everyone is talking about it. It's the aid agencies like the Norwegians are talking about it, and academics are studying it, just last year alone 95,000 academic titles cropped up in your Google search, 1.3 million papers over the last three decades have been published on this topic. So, just for the benefit of our listeners, let's begin by asking you a very simple question since you work with this on an everyday basis in the World Bank, what is a cash transfer? How would you define this very simply? What does it entail and what are the different types of forms and shapes that these cash transfers end up taking in various parts of the world?
Gentilini So Dan, you are absolutely right that when we talk about cash transfers, we are actually talking not about one program but about a family of the various programs that have very different objectives, design features and effects. You could think of cash transfers provided conditioned on certain activities like sending kids to school or conditioned on work and in that case, they are called public works programs. Or you could think of cash transfers that are meant for people of a certain age, for example, seniors, they're called social pensions. They can be targeted based on some welfare measure or they can be provided to everyone in society. That's the famous debate on universal basic income, they can be provided regularly overtime every month or just on a one-off basis, they can be small in terms of benefits, or they can be very significant, they can transfer a very significant amount of cash. Sometimes as part of why they are integrated programs that also transfer assets, provide skills and other interventions, it's very important when we speak about cash transfers to be clear on what program we are discussing.
Banik Why this sudden burst of interest? Is it based on some of the work that some economists are doing? I think I remember Andy Sumner a couple of years ago and many others who basically came up with a very simple prescription saying come on, let's stop doing anything else and this is the magic bullet. So somehow cash transfers have assumed this wonderful blueprint, it's the solution to all our ills, does that explain this radical increase in interest in cash transfers?
Gentilini Dan you're right about the increase in interest in academia, I was stunned when estimating that 1.3 million papers were produced over the past 40 years, I'm not sure if any other development intervention has been studied so much in depth. Let me say that cash transfers are exciting, perhaps because they offer the opportunity to help others in a very concrete, tangible, visible way, and I think technology also has helped a lot in increasing that interest. They offer also a kind of an opportunity, a point of contact with beneficiaries also for providing other services so it's not just a program in itself, it's actually a window into people's lives. But I also have to say that this excitement is matched by an equal level of debate, and this is because philosophical, societal, political, economic, and practical forces are fused and collected very powerfully in a single program. When you look at cash transfers, they sort of intersect with contentious debates at various levels. The first is about mindsets and attitudes towards redistribution, take the question of whether to provide transfers in-kind or cash, it’s a question that has been for us for centuries. In some societies, cash is something that you earn, while food is something that you deserve so the notion is that you need to put effort to earn cash, and this is something that has deep historical roots. This also means that these philosophical questions are reflected in specific design choices, and they affect whether and what conditions or responsibilities to have in place, why did you provide transfers in cash or in-kind, or whether and how to target beneficiaries. As you said, there is a debate on where they fit within the broader development discourse and here there are kind of two extreme views. On one hand, there is the narrative of poverty, simply the lack of cash so just to give people cash and the problem will be solved. On the other extreme poverty is totally about structural power imbalances, so cash is even a distraction from addressing the real drivers of inequities. I think there is some truth in both, there is middle ground, and I don't see them actually as mutually exclusive.
Banik When I think about cash transfers, I'm often reminded of something that my students told me many years ago, and listeners of this show have heard me talk about this, that after having taught what does not work for a whole term, they were frustrated they said, tell us what actually works because we want to do development and there needs to be some hope. So, I devised this what works course promising practices in International Development and one of the big success stories in many ways is cash transfers, however way you look at it. I think there's always been this interest in cash transfers as something that works, it is relatively simple, it's easy to understand, but as you also said, it is sometimes pushed back because perhaps it doesn't address all these structural inequalities. In some rich countries, people have reacted particularly in the UK saying why should we give money, free dough to people. We will get back to the arguments for and against. I'm just thinking about the fact that Lula was just elected in Brazil, and he has often been seen to be a champion of Bolsa Familia, very successful redistribution program. You have a long history in Latin America with Mexico Progresa, Oportunidades, or Prospera as it is called now. All of these cash transfer programs Ugo as I've read over the years were successfully championed in Mexico in Brazil, and then it sort of caught on in the whole of Latin America. But when that model of conditional cash transfers, I have to mention here that you actually get money, a household gets money in return for doing certain things like sending children to school, getting a health checkup or whatever. That conditional cash transfer model when tried to apply it elsewhere and I’m thinking about South Asia, in India, it didn't catch on. When one tried to do the same kind of conditionality model in sub-Saharan Africa, it did not catch on. So, could you reflect a bit on this historical evolution of the conditional cash transfer model and how increasingly we see perhaps in some parts of the world, including on the African continent, more of the unconditional cash transfers that have become more popular.
Gentilini You're 100% right Dan. In part, I think the origin of cash transfers in recent decades can be traced back to some of the Latin American experiences that had a particular design, some of that design is still in place, some has been replaced with something else, I think Mexico has moved in a different direction with cash transfers. Three years ago, I would say that the design has in fact evolved and if we look at first the magnitude of the expansion already in the early 2000s, the number of unconditional cash transfers has increased really exponentially to look at trends, around 1999, 2000, 2001 there is a steep acceleration worldwide. In part it reflects the diversity of conditions and preferences and appetite for other forms of transfers, sometimes the supply of services upon which transfers are conditioned may not be there, or the attitudes towards distribution as such that an unconditional cash transfers is preferred. Also, there is such a range of ways to design programs as I mentioned earlier, sometimes you have a simple unconditional cash transfer that can work very well, other times there is information that is provided alongside that transfer. For example, some training in nutritional information or feeding practices that are not conditions per se, you don't get excluded from the program if you don't fulfil them or you do not attend the training, but it comes with the program, and they have been proved to work quite well. So, there is a spectrum of options and we have seen a lot of diversity, so some of the conditional cash transfer programs still exist and many variants from kind of quasi conditional to fully unconditional are present different parts of the world. Perhaps with the recent pandemic, there has been a further acceleration on unconditional transfers because of the nature of the pandemic. Programs were simplified in many ways and there is also interest out there in having unconditional cash transfers as sort of a benchmark against which you could compare the custom benefits of programs that were slightly more complex or sophisticated or integrated and see what works best.
Banik So let me raise two issues, one has to do with why I think some of the programs that worked in Latin America did not perhaps work elsewhere. There are all kinds of cultural, national, and contextual issues here, of course, but one has to do if I recall correctly, with the lack of adequate infrastructure, not having banks or ATM machines available. In those days, in the early days or even a few decades ago, we were not talking about digital payments we were thinking about transferring that amount and there were some issues with political intermediaries, middlemen, etc. But just getting the cash to people was often more of a challenge, I think of the African continent a few decades ago, than it is now, perhaps because now mobile technology has taken off. Similarly, this was also a problem to reach out to, say, rural parts of India. That infrastructure issue I thought was a big challenge, but perhaps you can say something about how that has developed, because given this technological progress that we've all witnessed, including during the pandemic, I'm sure issues of targeting identification perhaps are a little easier now than before, that's one thing. The other thing I wanted to talk to you about is whether the evidence about conditional cash transfers, if I read correctly, there isn't really that much evidence saying that the conditional aspect of cash transfers are better than the unconditional, so that's why let's just go to the unconditional aspect. If you could clarify that for me and my listeners that would be great.
Gentilini Absolutely I think that in recent decades perhaps the past couple of decades, but even more so over the past five years, the frontier of what is possible has expanded enormously, sometimes innovations happen when they're planned, and sometimes they happen when you are under pressure.
Banik You mean like during the pandemic?
Gentilini For sure. The moment that governments did have information on about 15 or 20% of the population and those people were already receiving transfers as part of routine interventions and then you have a shock that affects 80% of the population, how do you reach that missing 60%? Especially for informal sector workers and other categories of populations that are neither eligible for social insurance nor do they participate in cash transfer programs and there we have seen an explosion of innovations in how to outreach and let people know that the programs exist. I think Columbia, Morocco, and other countries have invested a lot in letting people know through social media and other vehicles about what's available for them. The use of apps, the use of technology for enrollment, skipping a number of steps that are normally required for participation and verification of for example, people's income and basically access was made easier and that increased coverage enormously. We estimated that about 1.3 billion people received cash between 2020 and 2021, that's historical, that's unprecedented, and I think that within that 1.3 billion, there is even a more incredible figure which said that 200 million workers were supported by unconditional cash transfers. If you look at the history of cash transfers, that's quite remarkable, because these sorts of programs that normally tend to serve those populations tend to come in the form of public works, for active labour markets. Seldom we have seen the state reaching that far in supporting workers with simple cash, and that in my mind is quite a historical shift. By the way Dan as we speak about COVID, there are about 622 million people that are receiving cash transfers as part of inflation responses. So as the cost of living goes up, the price of food goes up, since April, countries have been using cash again to respond to another huge crisis, and cash seems to be again the primary vehicle for addressing it.
Banik Ugo, let's talk a bit about what works and what has been a challenge. When you look at the literature, when you look at the evidence, when you look at what the banks have been doing, what other agencies and bilateral donors have been doing, how would you classify the welfare effects of cash transfers, say on poverty reduction, on gender, schooling, and nutrition. If one goes by your Twitter feed, it is all win-win, it seems that everything is really fantastic and I enjoy reading what you post on Twitter because it is showing that there's a lot of positive effects in terms of maternal and child health, nutrition, and it also apparently has economic effects, it could have an effect on fiscal and monetary policy. How would you classify the good news in terms of what really has worked, which in many ways I think explains this growing popularity. Maybe there is much more evidence out there that is so persuasive that it is very hard to look away from.
Gentilini Thanks for pointing that out. I hope that my tweets don't come across as advocacy.
Banik No, you're providing the evidence my friend of things that are working, which we are very grateful for because we academics are sometimes too critical.
Gentilini I think that the evidence is much stronger in some dimensions relative to others, so that's one way of looking at it, and the other is always compared to other interventions. So, let me stick to the first part, where do we know that there is more positive evidence, in some dimensions relative to others, and I think that we can put to rest the debate on whether cash or cash transfers are used wisely. It’s been widely proved that people use cash for very desirable purposes, they have an immediate effect on poverty that is almost mechanical, they have very strong effects on food security, dietary diversity, the quality of the foods that people access and also increasing attendance and enrollment of education and health services whether they're conditioned or not. Where they are slightly less effective is when it comes to dimensions that require a lot of other interventions to be achieved. I think of chronic malnutrition and the effect on stunting there is some positive effect, but it's not very large because it takes so much more than a cash transfer to have good nutrition. The same for learning, when you look at the facts on test scores it takes much more. We have a lot of evidence on the labour market effects and I would say that on average the fears that cash transfers will get people lazy that they will withdraw from the labour market that would hinder labour supply, those are largely overstated, but at the same time we also don't see a huge effect on increasing that supply as well, so it's kind of neutral. Unless there are particular design features like providing a larger cash transfer for entrepreneurship and here, we have seen also very long-term effects, there are some studies that look at the persistence of effects, and they get up to 12 years although we see those effects fading a little bit over time. There is evidence on when it comes to gender, huge reduction in intimate partner violence because of poverty induced stress that can lead to violence within the household but transfers themselves are less effective in empowering women more widely, so they have a particular effect on gender-based violence, but not necessarily on other empowerment dimensions. Then there are a couple of dimensions also that I think are quite fascinating and they haven't received full attention yet. One is for example, the psychological dimension, we know that when you're very poor, you're constantly preoccupied with immediate concerns, such a concentration of worries that are very concrete, it's the here and now, and the notion that transfers can provide that psychological security and sense of independence and dignity.
Banik You mean predictability that you can actually expect an income?
Gentilini You can expect an income that would make you psychologically better, and we know that when there is stress, there is violence, there can be depression and that can lead to substance abuse, can even lead to suicides and we have seen that transfers actually had a mitigating effect on all those dimensions. But on the other hand, cash can ironically sometimes also increase stress, so there is a study that came out a couple of months ago that showed that cash transfers actually produce some very valuable objective effects in well-being, they improved welfare, but people felt worse, and this is because cash represented a moment of hope, but at the same time they made people realize the magnitude of the unmet needs. This is not a case against cash, but it shows that transfers operate within a web of hopes of dynamic needs or pressures of expectations and this ecosystem doesn't often receive full attention, yet it matters a lot for people's well-being.
Banik It reminds me of what I read in the literature over the years. In some respects, you see a very direct linkage in terms of cash improving certain aspects of daily livelihoods, but in certain other areas, such as cash transfers for HIV prevention, the evidence is less clear. I think I remember reading something saying that sending girls to school there are incentives to prevent girls from engaging in certain types of activity that helps, but we can't see a direct impact. In other cases, for example, in relation to cash and migration there may even be a counter argument that you think that providing cash transfers will reduce the risk of international migration, it turns out it actually increased in certain contexts because people had more money to migrate. One of the earliest debates I remember on this topic, I think it was Kaushik Basu and many others who were involved in this, pros and cons between cash for work or food for work, and this had to do with social protection schemes in India in terms of doing something with unemployment and there were advantages and disadvantages. If I can recall this correctly, Ugo some of the arguments in favour of food for work was that because of rising prices because of inflation, it is much better to provide people with food than with cash. Cash can also be abused, food is something that makes sure that you survive, it can be used for nutrition purposes, etc. How is that debate progressing do you think? Is there still that kind of disagreement between what works best in certain situations and that maybe food is better than cash?
Gentilini I think that the debate is still there, but it's not as intense as it was at the time of the studies and debates that you mentioned. I think it's fair to say that the use of cash requires certain preconditions, and one of those preconditions is the functioning of markets. So, in cases where you don't have a functioning food market, maybe an income transfer can be more effective than a cash transfer. The problem sometimes is how you define a working market, how you measure it, which can be very complex and there are many different definitions around those. There is evidence also that when prices can get very high, there is a preference by some prospective participants for something very concrete in in-kind transfers, but at the same time, people do appreciate the flexibility of having a fungible resource like cash because they can decide how to spend it. Sometimes there is rent that is due and that will be the priority for a household. The debate is still there and it is also important to think in terms of costs, in principle, when you think of an in-kind transfer, there is more complexity to it.
Banik You mean the in-kind transfers versus the cash?
Gentilini Correct, so for an in-kind transfer you need to purchase the food from farmers or wholesalers, you need to store it, you need to transport it and you need to distribute it. Those logistics tend to make cash transfers more cost effective, but there can also be cases where there are some exceptions, especially in cases where you have very limited food availability. Sometimes when you purchase in-kind transfers in large quantities, you can get a huge price discount and that price discount can offset the entire logistics that cash transfers entail. But that's very much the exception and we see that now, on average cash transfers tend to be up to about 23% more cost effective than an equivalent transfer in-kind. There is also a middle ground, which is the vouchers, those are the schemes that you don't need to procure anything, you provide a transfer or provide access for people to buy food for a given quantity or quality in predefined stores and they have access to it, it's kind of a restricted form of cash that is sometimes used. If we look at history, a number of cash transfer programs have undergone that transition of shifting from in-kind vouchers to cash and the more we see organisations coming up and the more markets are integrated the more technology makes transfers very fast and efficient. It is likely that even humanitarian assistance is going to be more and more provided in cash transfers, not only in terms of social protection. We have seen that now, for example, about 20% of humanitarian assistance is provided in the form of cash transfers, something that was definitely not the case 2 decades ago.
Banik When you talk about food you're absolutely right, because I've done studies of this in India and one of the big problems is actually food storage, even if you solve the acquisition and the distribution, just making sure that the food doesn't rot in the godowns and the storage houses, that is a nightmare. It also turns out that we cannot expect people living in poverty to actually be given bad quality food, sometimes they say they would like the freedom to choose what they buy. When you get it from say a government fair price shop, they say that the quality of the rice is bad, so, why should we eat bad quality rice. But talking about some other issues Ugo, when I look at the literature it turns out that by in large there's an overwhelming body of evidence saying that cash transfers are good, they work and as you rightly pointed out, they have maybe more clear effects in certain sectors than in others, but the general evidence is that it works. But one area where there also appears to be some sort of consensus, and maybe you'd like to reflect on this, is the fragmentation that takes place across various programs in certain countries. The lack of administrative capacity I mentioned earlier, the whole set of issues related to targeting registration, proof of identity, and then of course the logistics of actually distributing the cash through mobile phones or through a bank card. There is this whole infrastructure related aspect that I would like you to reflect on if you can, whether we have now reached a point where all of these can be bypassed to a certain extent. But there are certain other things that perhaps can't be bypassed. I was reading this study from Columbia from 2018, where the author talks about the centrality of queues, you queue up for something, you register and then you queue up for another thing, and there's another queue. There are all kinds of delays to just actually get the cash, so have we moved beyond this, or do we still have these logistical challenges out there that need to be fixed?
Gentilini Sometimes we may get the impression that everything now works perfectly well, but I'm convinced that it works much better than just a few years ago. If we look at how information systems are developing nearly everywhere in the world, that's fairly remarkable on the information that governments have about what programs are available out there. I think the information on how they work as well, but of the variety of delivery options that you have on the table. If you think of how to let people know that something exists, you don't need to go door to door, there are so many platforms that one could tap, the same for payment options and also inviting people to provide information themselves so you don't have to necessarily again go out and collect it. There are so many databases that could be tapped and used that we have seen whether they're CV registries or whether it's information that the health sector has or in education, there is much more of a kind of government wide approach to social protection than there was just until recently. But of course, there are so many programs out there, sometimes it's hard to take stock of how many there are including at central and at local level, and the variety of actors. Sometimes one government department doesn't necessarily coordinate with another what is going on in the development sphere or in the humanitarian assistance sphere and sometimes there are things that are going on in parallel. A figure comes to mind since we discussed humanitarian assistance earlier, about 0.5% of the 30 billion humanitarian assistance out there per year is channeled through government structures and sometimes this is for good reasons, and other times less so. But it just gives a flavour of the systems within the system that are available in a country and sometimes even a cash program that is intended to reach similar populations in similar areas, even with similar design may sometimes suffer from coordination problems because of different actors not using the same systems.
Banik For me there are two sets of actors that can facilitate, but also be a hindrance in rolling out cash transfer programs. One is of course the political actors, the political intermediaries, the middle men who may want to take credit, saying Ugo, I'm giving you the money, but vote for me, you should basically be thankful. In that aspect it becomes more like a charity case rather than a right of citizens, so if we can cut out the middleman if we can cut out that kind of political capital that you're getting this because of some leader, some saviour that would be great, so that's one aspect. The other category of people I find who play a very important role are bureaucrats. It could be street level bureaucrats who sometimes may end up doing certain things or performing certain acts that are unintended, not a part of the program, like maybe making sure that there is proper behaviour of the recipients, whether it is school going or health checkups or whatever. They may even be willing to ignore or hide some of the not so nice behaviour in order to make something look much better than they really are. What do you think about these two groups of people? In addition, of course now you have increasingly civil society organisations involved, it's not just governments as was the case in Latin America, now you have a whole variety of actors getting into this cash field.
Gentilini That's correct, actors have increased enormously and that brings more options in a way, also more competition, but also increases the premium and importance of coordination. But then I think there is even a third layer here, and while we discuss evidence, while we discuss delivery and actors there is a structural issue as well if we look at how tax and transfer systems work at the moment. That means how much people receive in total, so if you tax them on one hand and then provide transfers on the other, how much is left at the end of the day. If we look at what's going on in low-income countries, the poorest 10%, the poorest 20%, they tend to be net payers which means that you can have a very effective program supported by the best available evidence, incredibly well coordinated, informed by state-of-the-art information systems, and yet those structural issues will hinder its performance. This is because of a sort of reverse effect of on one hand of very limited coverage, so coverage is still very low. Let us take aside for a moment emergency responses, 1/5 of the poorest quintile or the bottom 20% is covered by some form of social assistance, that's very little. On the other hand, we look at taxes, most taxes in low-income countries or indirect tax, and indirect taxes tend to be a little bit more regressive than direct taxation, so this combination of indirect taxation and low compensation through social protection leads to this outcome of people having to pay more than what they receive. That is if you wish an empirical regularity in a number of low-income countries and then these tax transfer systems become more and more progressive as you climb the income ladder. So basically, in high income countries you start being a net payer around or after the bottom 40% of the population. So that's I think an important issue that is sometimes forgotten in this conversation that we need to really account for those structural drivers that are hard to address, but they do affect very concretely any social protection program.
Banik Good point, so when you think about social protection, some of the core social protection instruments Ugo, generally I think we're talking about three overarching pillars, so you have social insurance as in old age pensions, disability, maternity, unemployment, health whatever informal savings programs, then you're talking about labour certain active labour market programs certain regulations and then you have the third category of social assistance, which is where the cash transfers are. In hindsight, and having recently written this paper for the bank about how transfers cash transfers were used by governments during the pandemic, what did you find? Because apart from this becoming increasingly popular, it seems to me having read your paper that among all of these core instruments of social protection, there was something about cash transfers that made governments choose it as a tool in this crisis, even in situations where countries perhaps did not have well established social protection programs cash transfers seem to be almost an easy way out to resolve some of the challenges. I know that solving informal sector related problems is a challenge, but still cash appeared to be a solution. So, what did you find and how did governments actually use this to address these big challenges that the pandemic posed?
Gentilini If we look at high income countries so high level of formality wage employment, in those countries, wage subsidies were used extensively, and they were a very direct way of providing support, keep paying people while staying home those that we're already earning a wage. So, at the same time, the pandemic has shed light on the gaps in the system and the fact that for example the self-employed or people in nonstandard employment or short-term gigs etc weren't really well covered by social insurance nor by social assistance, and so countries like Italy and Cyprus and Luxembourg, Austria, Greece, Spain, they all use social assistance significantly, to fill those gaps, and doesn't that sound familiar? So, the moment that then we look at lower middle-income countries again this large missing middle within the income distribution that doesn't get either cash transfers nor social assistance the immediate response was to go large scale with cash transfers. We have seen that even I think central banks looked at cash and that's interesting, because this is not a fiscal policy anymore this is an unconventional monetary policy. You have low inflation rates and maybe cash transfers are the surest route to get the economy back to speed and get people to spend money. That's why we have seen 13 cases of universal transfers in South Korea, Japan, Hong Kong, Singapore, Serbia, Israel many other places that gave cash with the hope that is going to be spent and that will keep economies alive. That is also something that under certain macro conditions low interest rates and widespread shocks is maybe a measure that it's going to be less and less unconventional moving forward.
Banik Are you saying that maybe the pandemic has made a stronger case in richer countries for a universal basic income?
Gentilini It probably has made the case for universal social protection and that they need to cover everyone and if we look worldwide, it's almost aspirational in every country. Some countries are very close to that and others are very far, so I think having a discussion on how to get there is very important and it speaks to the need to properly combine assistance and insurance and also knowing the limits of both. There are things that assistance can’t do in normal times and there are things that the insurance can’t do during crisis, so I think you need both in the combination and the relative weight of those two arms is going to differ in different contexts. But the notion that you can reach everyone in society when needed, that's it's there and even high-income countries had a hard time in reaching everyone.
Banik So targeting is not just a problem in in low- and middle-income countries?
Gentilini It's even more than that. There is a high-income country that decided to go universal and 20 days after the announcement, 80% of the local governments had not provided a payment yet because it is hard to reach people from a delivery perspective. Let me put it this way, the pandemic has helped share and converge in a number of challenges across contexts, so it's almost like goodbye south-south and hello global and that relates to the need to reach people that are normally not reached by social protection systems, it's about having delivery systems that can potentially reach everyone.
Banik I think also I read in your paper that in addition to governments that move centre stage civil society actors played an important role which is also this kind of diversification. I would like to end to go where we started. There's so much interest among many actors on cash transfers but particularly among aid agencies, I mentioned to you, Norwegian Norad has now flagged cash transfers as a as a major initiative that they'd like to promote. Do you have any words of advice for aid agencies as they try to navigate this terrain of providing more cash as part of their aid projects?
Gentilini I would say very humbly from my perspective, try to see where they fit in the system first. I think there is a need to have systems that can flex and that the more we could have some form of automatic stabiliser the better. There is always going to be a role in space for discretionary spending for the policy space, but somewhat anchoring scale up decisions on some early warning systems that track risks and that have triggers and that can inform scale up down the line I think that that could be a very promising avenue. I would also think of being a very honest knowledge broker there is so much that is going on worldwide that I think the international community could facilitate a lot of that exchange. When speaking to some ministers or policymakers during the pandemic, and especially about six months down the road they all said, I wish I knew this from day one or I wish what was going on elsewhere immediately. I think there is so much that we could think of in the ways in which we could assist policymakers and get them the best knowledge, and also words matter and I always had a bit of a problem with convincing others.
Banik You mean being persuasive enough?
Gentilini Well convincing sometimes sounds like you know something that others do not. I think we have to understand where others are coming from, what they would like, where they want to go, their worldview and give them the best available evidence globally from different contexts in a very objective way and being able to help inform implementation and adaptations within the very economic and political ecosystems within which people operate. You are going to have Stefan Dercon in this series, and I think he is making a strong case for understanding politics and how much how much it matters. I think that is part of this conversation and it's an important element in the cash transfers agenda as well.
Banik It has been such a pleasure to chat with you. Just seeing you at home in DC makes me want to travel back to DC as soon as I can. I really enjoyed the conversation, thank you so much for coming on my program today.
Gentilini Thank you so much for having me Dan, you are too kind and let's reciprocate, I will very much look forward to getting back to Norway.