Cash and Compliance with Social Distancing

As coronavirus spreads in developing countries, an important question is how to improve the resilience of poor households to its economic ramifications, and facilitate their adherence to calls for social distancing. Lockdowns and social distancing measures implemented to reduce the spread of COVID-19 are expected to have a major socio-economic impact for the 60% of Ghanaians who work in the informal sector. 

For these workers, no work means no pay and no safety net. For the bulk of micro, small and medium scale enterprises (SMEs) this means a severe shock to their businesses and the families and other dependents they provide for. Also, with nearly a quarter (23.4%) of the population below the national poverty line, it means that about seven million people are vulnerable and risk dropping into extreme poverty.

From this perspective, we aim to understand the role that digital cash transfers can play as a policy tool both to increase household resilience during the pandemic and to stem the spread of the disease by increasing adherence to social distancing.