Could mobile money change aid distribution and emergency relief?

After a drought in Niger, some households got cash transfers via mobile money (called zap), one-third got manual cash transfers, and one-third received manual cash plus a phone.

the zap-based program strongly reduced the variable distribution costs for the implementing agency, as well as program recipients’ costs of obtaining the cash transfer.

The zap approach also resulted in… more diverse purchasing, a greater diversity of diet, fewer depleted assets, and a greater diversity of crops grown, especially marginal cash crops grown by women.

…lower costs and greater privacy of the zap mechanism—as well as changes in intra-household decision-making—explain the advantage.

Full paper here.

I have been a skeptic of ICTs and development, but the mobile money business will probably make me a believer.

2 thoughts on “Could mobile money change aid distribution and emergency relief?

  1. Obviously this is good necessary work. But I’d offer two issues I wish had been addressed in the experiment design phase.

    “An ideal evaluation would have also included a pure comparison (non-cash) group, plus a group with access to mobile phones and m-money (but no cash). Due to the humanitarian nature of the intervention and the political situation at the time of the crisis, there was no pure comparison (non-cash) group.”

    Without a control, as is obvious to you I am sure, we can’t tell how much of this is the situation just improving, or is related to the other interventions going on in the area.

    Less importantly, the size of these transfers were not sustainable. Even accepting that the missing control should still let us conclude this is helpful, 2/3 of GDP per capita given over 5 months distorts the results we should expect in a smaller intervention. Perhaps the added step necessary in m-money transfers of exchanging the m-money for physical cash is only worthwhile given the massive size of the transfer. In this case, if you shrunk the intervention to a more sustainable 10% of per capita GDP, perhaps travel costs (otherwise borne by the intervention through provision of security and employees to transport and distribute the money) would eat up the intervention’s marginal benefit, and it wouldn’t have much effect. Or perhaps the massive influx was had spillover effects wherein the diverse food benefit for example is actually due to the community having higher total employment or some other intermediate factor, which in turn led to the results in the paper. In this case, a smaller intervention might not have those spillover effects. Large enough controls could have helped answer this complaint as well.

  2. Must you either “believe” in ICTs and development or not believe in it? Shouldn’t your decision be intervention-specific?