Despite doubling Khongoni’s local GDP, inflation was negligible; quoting GD:
Markets were able to absorb large-scale transfers without driving significant price inflation. That gives us strong evidence that this model can be scaled responsibly and rapidly without triggering harmful inflation.
This stability was a product of how recipients and markets responded:
🗓️ Recipients didn’t spend all at once: Findings showed households did not spend all of the transfer immediately and gradually increased their spending over months.
🚲 They also shopped around: Recipients had access to multiple markets, locally and in nearby Lilongwe city, allowing them to choose between sellers if someone didn’t have what they needed or tried to raise prices.
🤝 Vendors chose not to raise prices: Traders reported keeping prices steady to maintain trust, saying opportunistic hikes would damage their reputation once the cash was gone.
📦 Markets adapted to demand: Many vendors simply ordered more stock and new traders entered markets, both without significantly driving up prices.
I’m a fan of cash transfers and think it’s a tad underrated in EA circles, so I’ll end by quoting Canva on cash:
Economic activity increased by $2.50 for every $1.00 transferred in rural Kenya (Egger et al., 2022)
You might be wondering why cash transfers are able to have an impact in so many different areas. We believe the impact lies in giving people the autonomy to choose what they need most. In all the examples we’ve seen, each person put the money towards ensuring they and their families were able to access their most basic needs while also putting the money to work to generate income in an ongoing manner.
Research shows the cost-effectiveness of cash transfers continues to be elevated upwards to show more impact. Last year, GiveWell reviewed the latest evidence from GiveDirectly and increased their estimates of cost-effectiveness by 3 to 4 times.
Very impressive. GD nails the essentials of good comms / messaging while sticking to evidence and transparency. Something many of us aspire to replicate / scale. Well done and looking forward to seeing the impact this unlocks!
Thanks for sharing, really energising to see. Their blog post has really nice illustrations, sharing some of them below.
These are some of the results from the $50M they’ve donated so far to GiveDirectly to every adult in the Khongoni subdistrict of Malawi:
This was what they spent it on:
This is the framework Canva came up with to track impact on recipients via continuous surveys:
In the next phase with their $100M commitment to GiveDirectly, these are some of the research questions they’re helping GD explore:
And from GiveDirectly’s side of the story — the first 2 phases were funded entirely by Canva:
Despite doubling Khongoni’s local GDP, inflation was negligible; quoting GD:
I’m a fan of cash transfers and think it’s a tad underrated in EA circles, so I’ll end by quoting Canva on cash:
Very impressive. GD nails the essentials of good comms / messaging while sticking to evidence and transparency. Something many of us aspire to replicate / scale. Well done and looking forward to seeing the impact this unlocks!
This is quite an impressive analysis and impact :)