Eliminating Extreme Poverty: Comparing the Cost-Effectiveness of Livelihood, Cash Transfer, and Graduation Approaches

This research identifies 30 livelihood development programs, 11 lump-sum cash transfer initiatives, and seven graduation programs and compares results from impact evaluations and project-specific cost data to understand which of these three program types generates the greatest and most sustainable impact for the extreme poor to ensure effective use of scarce resources.

Among all 48 programs reviewed, the findings suggest:

• Lump-sum cash transfers were found to have the highest benefit-cost ratio, though there are very few lump-sum cash transfer programs that serve the extreme poor or measure long-term impacts;
• Livelihood programs that targeted the extreme poor had much lower benefit-cost ratios;
• Graduation programs are more cost-effective than the livelihood programs that targeted the extreme poor and measured long-term impacts.