Many regard cash transfer programmes as cost-efficient tools to alleviate poverty across the Global South. But, as Guido Maschhaupt and Ahmed El Assal argue, in autocratic contexts, these programmes can have unintended – and politically significant – consequences. By supporting them, international aid donors may inadvertently bolster authoritarian regimes
A broad consensus in the international development sector holds that cash transfer (CT) programmes are among the most cost-effective anti-poverty strategies. A growing body of research, reviewed in 2016 by Francesca Bastagli, Jessica Hagen-Zanker, and Georgina Sturge, backs this view. The literature demonstrates that CTs improve outcomes such as household consumption levels, asset ownership, human capital, and aggregate demand. According to a recent World Bank report, most Global South countries operate some kind of donor-supported CT programme.
However, as Thomas Carothers and Diane de Gramont argue, all development interventions are inherently political. They involve contestation over resources, influence, and legitimacy. This holds true even in seemingly apolitical sectors like health, education – or cash transfers.
We do not dispute that CTs can improve individual livelihoods. But we argue, as Sam Hickey and colleagues have, that the very features that make them cost-efficient – scale, directness and visibility – also make them politically potent. When delivered by governments, CT programmes can become tools for regime legitimation, patronage, or even electoral manipulation. In such cases, their long-term developmental impact may be compromised.
The cost efficiencies of cash transfer programmes – such as scale, directness and visibility – also make them politically potent, and may compromise their developmental impact
It is important to note that our critique applies specifically to donor-supported but government-implemented CT programmes. Programmes run independently by NGOs tend to operate outside government budgets and follow different political logics.
This risk is particularly acute in electoral autocracies – regimes that hold elections but constrain political competition and civic space. These states receive a major and growing share of Official Development Assistance (ODA) from OECD countries. A 2022 OECD report found that total share of ODA going to such states increased from 64% in 2010 to 79% in 2019.
In a recent journal article co-authored with Petronilla Wandeto, we examined how CT programmes in Egypt, Ethiopia, and Uganda have contributed to autocratic entrenchment. They have enhanced regime legitimacy, weakened civil society, and reduced governments' incentives to carry out meaningful reform.
Dirk-Jan Koch has recently outlined a taxonomy of unintended consequences of aid. We find that donor funding for CT programmes can have the unintended political consequence of reinforcing autocratic rule. Donor behaviours can amplify this risk, particularly when aid agencies favour certain elites, wield financial leverage without transparency, or exclude civil society from policy processes.
Donors and policymakers must assess whether the short-term benefits of their interventions genuinely outweigh the longer-term negative political consequences
In such contexts, donors and policymakers must exercise a duty of care. They must critically assess whether their interventions genuinely promote development or inadvertently empower the regime. Short-term benefits to recipients should not blind us to the longer-term political consequences. These may be harder to measure but are, ultimately, more impactful.
Egypt’s experience illustrates the tension between economic reform, donor-driven CTs, and authoritarian politics. After the 2011 uprisings and subsequent economic crisis, in 2016, Egypt secured a $12 billion IMF loan (now expanded to $30 billion). A key loan condition was replacing food and fuel subsidies with a targeted CT system, to mitigate negative economic outcomes from the broader reform package.
With World Bank support, the Ministry of Social Solidarity launched the Takaful and Karama programme with a $1.4 billion budget. Designed to support poor families with children under the age of 18, as well as elderly, disabled, and orphaned individuals, the programme now reports reaching nearly four million families and disbursing 900 EGP monthly (approximately $18 USD). The programme is often heralded by donors as a success – especially in supporting poor families and empowering women.
Yet, this narrative obscures deeper problems. An independent impact evaluation found the programme had positive marginal effects. Zooming out, however, the transfer amounts are low, and programme's impact remains minimal relative to needs. This is especially salient when we factor in rising poverty, currency devaluation, and inflation increasing public debt.
El-Sisi's regime is currently clamping down on dissent and suppressing civil society organisations. In such an environment, the CT programme becomes no more than a legitimating mechanism, softening the impact of austerity while justifying harsh economic reforms.
Takaful and Karama is not a transformative tool for poverty alleviation. As it stands, the programme risks functioning as merely a technocratic veneer on an increasingly repressive political order.
Recent shifts in global politics heighten the risks. Nationalist and populist politics across the OECD are on the rise. International aid budgets are being cut; defence spending is on the rise. In the US, UK, Germany, France, and the Netherlands, among other countries, overseas aid spend is shrinking. What aid remains is increasingly and explicitly aligned with donor strategic interest, as evidenced in the rhetoric of the US, and the EU. This intensifies an already growing trend, in which aid is increasingly used to stem migration flows, or securitise borders. This compounds the risk: autocratic regimes with strategic relevance – like Egypt – may receive more aid, with fewer political safeguards.
In OECD countries around the world, international aid budgets are being cut, while the aid that remains risks being spent with fewer political safeguards
New initiatives like the EU’s Global Gateway, intended to mobilise massive infrastructure investment in Africa, may replicate these dynamics. If donor priorities override recipients' political consequences, the risk of unintended consequences will only grow.
The aid sector is in a moment of flux. In an era of shrinking aid budgets and growing geopolitical competition, how much space do donor agencies have to prioritise political ramifications in recipient countries?
Cash transfer programmes remain important developmental tools, but in autocratic settings, they must be implemented with far greater political sensitivity and transparency.
