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Covid-19, cash transfers, and corruption

Policy guidance for donors

Cash transfer programmes are being created and extended in developing countries as an economic response to Covid-19. Many donors are increasing their support for these programmes. However, the scale and speed of these programmes will intensify the corruption risks, in terms of fraud and embezzlement. This also extends to political abuse, particularism, and clientelism. Navigating the risks, dilemmas, and opportunities of cash transfer programmes via mobile telephony is important – with the right approaches for targeting mechanisms, distribution systems, monitoring, and more.

17 May 2020
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Main points

  • As entire economies are shut down to control the spread of the Covid-19 virus, cash transfer programmes via mobile telephony can be a fast and efficient way to reach the poorest and most vulnerable.
  • Cash transfers are considered a better way to reach the poor than food distribution and less prone to corruption, as the funds pass through fewer middlemen, thus limiting the number of officials with discretionary powers and private interests.
  • Cash transfers can be very efficient in countries with existing structures and methods to deliver cash to the poor, such as previous social security nets, identified recipient groups, and widespread use of mobile money.
  • Existing government cash transfer programmes can be supported and expanded to reach a larger proportion of the needy. When government cooperation is unwarranted, there are some international organisations with broad cash transfer programmes. Local NGOs can help in accessing target populations.
  • Cash can still be diverted and embezzled all along the entire cash transfer chain, and the scale and speed of these programmes will intensify the corruption risks involved.
  • The corruption risks are identified at four stages of the process: when funds are allocated to and managed by recipient governments; when decisions are made on who will be the recipients; when funds are handled by the distributing agencies; and when the funds are given to the end users.
  • Addressing corruption challenges in cash transfer programmes involves establishing clear, transparent, and efficient targeting mechanisms; choosing reliable and context-specific cash distribution systems; ensuring transparency and participation of beneficiaries; and putting robust monitoring and evaluation systems in place.

Cite this publication


Amundsen, I.; (2020) Covid-19, cash transfers, and corruption. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Brief 2020:9)

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About the author

Dr. Inge Amundsen is a political scientist at the Chr. Michelsen Institute focusing on democratic institutionalisation, parliaments, political parties, political corruption, and natural resources (petroleum resources management and revenue management). His geographic expertise includes Malawi, Bangladesh, Angola, Ghana, Nigeria, and francophone West Africa. He completed his PhD in comparative African studies at the University of Tromsø, Norway, in 1997.

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All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


Covid-19, cash transfer