We know cash transfers improve lives. Can they transform entire economies?

Published on October 7, 2026 10:15 PM GMT By Caitlin Tulloch, Senior Director of Research, Learning, and Product at GiveDirectly  Summary:  💸 Development economics usually treats “micro” and “macro” effects as separate questions. GiveDirectly’s programs are now large enough to blur that divide. 🌍 We know our cash programs increase household earnings, spending, and assets. The open question is whether and how new effects emerge when nearly everyone in an economy receives cash. 📈 In a district in Malawi, GiveDirectly is testing this directly: cash payments and business investment funding to over 100,000 households, totaling 85% of the area’s yearly income — the largest cash program we’ve ever run. 💡 The results of research at this scale could reshape how governments and donors spend billions on ending extreme poverty. What helps families living in poverty today? What makes economies grow in the long run? Development economics has often treated those two questions separately: one is ‘micro’ economics and the other is ‘macro’ economics. They’re frequently siloed into different textbooks and discrete journals. For more than a decade, GiveDirectly has built some of the strongest evidence in global development on ‘micro’ issues: large, one-time cash transfers (often worth a year or more of people’s usual income) help households in poverty improve their lives. Yet most of the 1.5 billion people who have escaped extreme poverty since the 1990s did so because their ‘macro’ economies grew, creating jobs, raising wages, strengthening businesses, and opening new opportunities to work or move. For decades, the community has debated if we should focus on ending extreme poverty with micro solutions or macro ones. I argue this is a false distinction. A macro economy is ultimately made up of the micro households and businesses inside of it. Reach enough of them at once, and those two questions start to converge.  That convergence is what GiveDirectly’s biggest-ever study is designed to test: can direct cash transfers at large enough scale help whole economies move out of poverty? We know what cash does in pieces. We are learning how those pieces add up to economic growth. We already have hundreds of studies showing the “micro” effects of cash, meaning what happens inside individual households after they receive it. They earn more, spend more, and own more assets. We know what cash does, and also what its limitations are.  We also have promising evidence that cash can spark changes in local economies. In Kenya, cash transfers increased incomes for both recipients and their neighbors who didn’t receive cash: as recipients spent more, businesses earned more, and that spending circulated through the economy. Every $1 transferred generated about $2.50 in local economic activity, suggesting that household gains can spread more broadly and contribute to economic growth. What we still know less about is what drives these economy-wide changes, and how many places in the world are ripe for that kind of market-wide impact to take hold. With GiveDirectly programs getting larger across enough different contexts, we can start asking better and more detailed questions about how economy-wide changes take place, and what it would take for those changes to stick.  What role can cash play in ending extreme poverty? Operating at this scale requires a completely different set of questions. Open any of the five below to see what each one covers and how we’re testing it now. Can cash, at large enough scale, change how a whole economy works? What relationship should large-scale cash programs have with governments What is the most cost-effective way to design a large-scale cash program? Which families can escape poverty on cash alone, and which need extra support to get there? What does leaving poverty actually look like for a household, across shelter, food, savings, schooling, and resilience to shocks? Explore all five questions in the interactive accordion on the original blog post. The growing scale of GiveDirectly’s programs lets us start answering those questions GiveDirectly is already in the midst of delivering its largest cash program yet across two of Malawi’s poorest rural districts. By the end of 2026, roughly 120,000 households will be enrolled to receive a one-time, no-strings-attached cash payment. In the areas receiving cash, the total amount delivered will equal ~85% of local GDP. The magnitude of this shock to the local economy is hard to overstate. In proportional terms, the amount of cash is like giving every adult in the United States a one-time payment of $114,000. You would feel it, your neighbors would feel it, and so would your niece who just graduated from college, and all of her friends.  That kind of scale is what makes this micro/macro learning agenda possible. We can test whether the effects we saw in Kenya hold as cash reaches much more of an economy in a different context, and use these insights to think