Mexico tried giving poor people cash instead of food. It worked.

In the United States, most government aid takes the form of in-kind transfers: that is, the government gives you stuff, or a voucher to buy specific stuff, rather than just cash to buy whatever you like. That has led to a panoply of programs.

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In the study, Naval Postgraduate School’s Jesse Cunha looks at the Mexican government’s food assistance program, known as Programa de Apoyo Alimentario (loosely translated to Food Aid Program, or PAL).

Evaluating the experimental data, Cunha finds that “both cash and in-kind transfers increased total consumption relative to no transfer, and that effect sizes are indistinguishable from one another.”

Cunha does find evidence that consumption of micro-nutrients like vitamin C and zinc is higher for mothers and children getting the food than those getting the cash, but no evidence of differences in actual health.

And there’s another big drawback to giving food rather than cash: it costs more to administer. Cunha notes that distributing PAL’s in-kind transfers costs about 20 percent of the cost of the food, but that the distribution costs of Mexico’s main cash transfer program, Progresa-Oportunidades, amount to 2.4 percent of the cash distributed.

Read more here: Mexico tried giving poor people cash instead of food. It worked.

Photo Credit: Miguel Discart

Footnotes: See also the case of Bolsa Familia and Uganda