Social Protection in Africa
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Social Protection in Africa

Frank Ellis, Stephen Devereux and Phillip White

The purpose of this book is to make accessible to a broad audience the ideas, principles and practicalities of establishing effective social protection in Africa. It focuses on the major shift in strategy for tackling hunger and vulnerability, from emergency responses mainly in the form of food transfers to predictable cash transfers to the chronically poorest social groups. The diverse case studies in this book provide a unique and timely exploration of the effective, and less effective, ways that social transfers are delivered to the chronically poor and vulnerable in Sub-Saharan Africa.
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Chapter 7: Market Effects

Frank Ellis, Stephen Devereux and Phillip White


7. Market effects INTRODUCTION Social transfers interact with markets in two, fundamental, interdependent ways: 1. 2. They have impacts on local markets, in particular markets for food, farm inputs, and labour. They are themselves affected by market conditions, especially price levels of staple foods like maize and rice, and this influences the most appropriate design of transfers and their outcomes. Taking each of these in turn, the impacts of social transfers on food, input and labour markets are rarely properly assessed. These impacts depend on the characteristics of supply and demand in each market; on how far food or input transfers add to consumption or substitute for commodities already traded; on the scale of transfers compared with corresponding volumes traded on local markets; on how well markets function or are integrated with markets further afield; and on how and where transferred commodities, food in particular, are procured. The impacts of markets on social transfers are a more immediate challenge to scheme design. In general a main aim is to address vulnerability arising from changing market conditions, in particular by protecting food entitlements when food prices climb. Beneficiaries’ transaction costs (time and transport especially) in accessing local markets are important and influence the choice between alternative forms of transfer. Ideally, transfers need to build in flexibility to vary their form and level in response to market conditions, though this complicates management and budgeting. Cash transfers are most effective when their level is linked on...

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