Give African villages cash for their own projects, new data show

to hack poverty and bad governance

Extreme poverty is growing ONLY in rural sub-Saharan Africa, afflicting nearly 400 million people. Debates about the primary cause — bad governance — often miss a key insight: while autocracy festers in many African capitols, democracy thrives in rural villages. New data show that annual transfers of small amounts of cash directly to villages, for development projects of their choosing, generate big development impacts per dollar spent. Additionally, academic research shows that cash transfers can promote democracy by bolstering support for opposition candidates challenging do-nothing, ruling-party politicians.

Chamtunga Village chooses clean water as its first project.

The deployment of cash transfers directly to African villages is the brainchild of nonprofit Village X, which operates in Malawi. Village X’s motto is “fund projects that villages choose.” The cash-to-village model employed by Village X is the manifestation of a novel theory of change: village democracy + direct funding = last-mile development. To track development impacts, Village X performs a statistical analysis on 17 socioeconomic indicators measured annually across treatment and control villages.

From 2014 to 2017, villages receiving cash from Village X decisively outperformed control villages. Measured impacts included 93% and 109% increases, respectively, in boys and girls in nursery school, a 63% increase in girls in high school, a 77% increase in goats, a 68% reduction in waterborne illnesses, a 123% increase in non-agricultural businesses, a 62% increase in homes with metal roofs, and a 138% increase in overall development score.

The entire program cost only $7,000 per village over three years, or $2,300 per year on average. That works out to only $1.08 per person per year. Malawi receives roughly $1 billion annually in foreign aid. A small fraction of that money (around 1% or $12 million) could be used to bring the cash-to-village model to every extreme poverty village in Malawi. This modest amount of funding would bring democratic development to over 11 million people.

Statistically significant impacts of the cash-to-village model after three years of implementation (2015–17).

Village X’s cash-to-village model distributes power to rural villages led by resident chiefs. According to Professor Kate Baldwin of Yale University, “[a]s unelected leaders, chiefs have little political incentive to act in the interest of the majority. But local chiefs often have strong economic and social ties that align their interests with their communities.” This is why chiefs are important development actors in rural Africa. The willingness of chiefs to act on community feedback is the sine qua non of good governance.

Children in Balakasi Village celebrate the opening of their nursery school.

While Village X’s cash-to-village model leverages democracy at the village level, the model also might promote democracy in national elections. An intriguing study conducted by Professor Chris Blattman at the University of Chicago revealed that unemployed youth in Northern Uganda who received one-time, no-strings-attached cash transfers from the government were 33% more likely than members of a control group to support the opposition party in the next election. That trend persisted 5 years later, a whopping 9 years after the study had deployed the one-time transfers. Likewise, an Afrobarometer study concluded that, in four Southern African countries, as government-provided water, sanitation, and trash collection services improved, political support for incumbent politicians decreased. While these early findings require more research, one explanation for them is that Africans empowered by development are more likely to break from patronage networks and hold politicians accountable at the ballot box.

Counterintuitive study findings like these suggest that the cash-to-village model could pose a duel threat to African autocrats. The model surgically disrupts extreme poverty, removing a realpolitik humanitarian card played by authoritarians looking for more aid largesse from the West. Extreme poverty alleviation, in theory, also facilitates bottom-up democratization by liberating large rural populations from the grip of ruling-party patronage politics. According to Village X, hacking poverty and politics together bolsters the stickiness of hard-fought development gains.

The implications of this one-two punch are profound. Autocrats in least developed African countries often rely on patronage and intimidation to garner electoral support from large rural populations. Autocrats remain in power when their rural voters outnumber smaller, opposition constituencies concentrated in cities. Flipping the rural vote (or some portion of it) could swing election outcomes and place politicians on notice that the penalty for bad governance is removal from office.

This is a hopeful time for rural Africa. Cash transfers offer a powerful tool for alleviating extreme poverty there. However, poverty alleviation alone is not enough where persistent bad governance threatens to stall or reverse development gains. Approaches like Village X’s cash-to-village model succeed because they operate with a mandate not only to disrupt poverty, but also to liberate people. Across Africa, rural villages await aid reform that creates space for these mutually reinforcing goals.