Evaluating spillovers and cost-effectiveness of complementary agricultural and social protection interventions: evidence from Lesotho

Abstract

ABSTRACT We present findings from a study of the local-economy impacts of Lesotho’s Child Grants Programme and of a multi-faceted rural development intervention. We designed a micro-data parameterised general equilibrium model and used it to simulate the direct and indirect impacts of the two interventions, considering income and production spillovers. The Child Grants Programme, alone and in combination with the rural development programme, generates total discounted benefits that exceed discounted programme costs. Local-economy spillovers amplify the benefit-cost ratio of both cash transfers and productive interventions. By better integrating with outside markets, it is possible to attain substantial cost-effective income gains for local economies.