Many countries have launched unprecedented relief packages to cushion the economic and social impact of the COVID-19 pandemic. Digital mechanisms have played a central role in the massive expansion of social transfers in the wake of the COVID-19 pandemic. Experience to date has revealed the importance of investments in ID systems, mobile networks and financial inclusion, as well as in data systems, in facilitating the response.This CGD policy paper considers some initial lessons emerging from selected countries around the use of digital technology to implement these government-to-people (G2P) social transfer programs.
Information is still limited on how well the programs have functioned; in particular, there is a dearth of rapid demand-side survey evidence on the experience of beneficiaries receiving transfers and the likely magnitudes of inclusion and exclusion errors. Nevertheless, the emerging picture provides some indications of how investments in digital systems and their deployment along the social transfer value chain have been facilitating the response.
We find that investments in digital systems have played a critical role in scaling up programs and payments. In-person back up processes are, however, important to minimize exclusion. Technology has been applied to all parts of the “user journey”, from initial identification and onboarding to selection and payments. Countries with stronger digital infrastructure, including ID and payment systems and social registers have generally been able to implement and disburse emergency assistance programs more rapidly than those without these assets. Using digital systems for informing, on-boarding and screening beneficiaries involves tradeoffs. Digital payments systems have played a vital role despite some limitations. The reality of the digital divide means that special measures may be needed to ensure that women and poor and vulnerable groups have access to programs. Lessons from the COVID-19-related scale-up of social assistance can be harnessed by developing countries to rethink and strengthen the architecture of social protection systems in the future.