There is a growing debate over whether aid is more effective when simply given as unrestricted cash compared to approaches such as conditional transfers which try to restrict how recipients use any money received. The idea that "money sticks where it hits" was dubbed the "flypaper effect" by Arthur Okun. Through randomized experiment in Ghana, researchers tested two methods of aid delivery for microenterprises in-kind grant that must be spent directly on the business, and a cash grant, which the owners can choose to spend how they like. The design follows closely the one used by de Mel et al (2008, 2012) in Sri Lanka. In Ghana, a sample of both female and male microenterprise owners who had no paid employees at the time of the baseline survey were randomly allocated into treatment and control groups. The treatment group received grants of 150 Ghanaian cedis (approximately $120 at market exchange rates at the time of the baseline). Half of the grants were provided in cash and half in kind. For the in-kind treatment, the owner was asked to choose any equipment or materials they would like for their business that added up to this amount, and then were accompanied by a research assistant who directly purchased these items. 793 microenterprises (479 female-owned and 314 male-owned) participated in the study. The baseline survey of these firms was conducted in October and November 2008. The two pre-treatment survey rounds were followed up by four additional quarterly survey waves in May 2009, August 2009, November 2009, and February 2010. Of the 793 firms which completed the first two rounds, 730 answered the final wave.
