Shortening the Path to Productive Investment: Evidence from Input Fairs and Cash Transfers in Malawi

While cash transfers consistently show large effects on immediate outcomes like consumption, limited access to markets may mute their impact on productive investment. In an experiment in Malawi, we cross-cut cash transfers with an “input fair”, designed to reduce transport costs to access agricultural inputs. Cash alone increases investment by 25%, while the input fair doubles this effect. Input fairs alone were ineffective. A mistimed public subsidy program undoes the incremental effect of the joint intervention (though not of cash alone) by causing input fair purchases to crowd out subsidized inputs, such that the program had no effect on quantities.