COVID-19: Crisis as Opportunity for Urban Cash Transfers?

COVID-19 shone a spotlight on the precarious living and working conditions of many city dwellers, particularly in low- and middle-income countries (LMICs), as well as the glaring deficiencies in their urban social protection systems. These combined factors put urban residents at a high risk of infection and saw their access to livelihoods severely hampered when governments rushed to implement drastic lockdown and mobility restrictions to contain the virus’ spread. The subsequent need to step up support for vulnerable urban households during the crisis triggered an unprecedented wave of cash transfer programs in cities across many LMICs.

Based on a literature review and case studies of various urban cash transfer schemes that LMIC governments implemented in response to the COVID-19 crisis (with primary case studies from Madagascar, Peru and Nigeria), this paper explores the successes and challenges of implementing cash transfers in urban settings in response to a large, covariate shock. It also considers the expected longer-term implications and lessons learned for building capacity to respond to future shocks and for social protection system-strengthening more broadly.