Conditional Cash Transfer

Conditional Cash Transfer

Conditional cash transfer (CCT) programs aim to reduce poverty by making welfare programs conditional upon the receivers' actions. The government only transfers the money to persons who meet certain criteria. These criteria may include enrolling children into public schools, getting regular check-ups at the doctor's office, receiving vaccinations, or the like.

Contents

Countries

Conditional cash transfers exist in the following countries, among many others:

  • Brazil: Bolsa Familia, Bolsa Escola
  • Chile: Chile Solidario, established in 2002 [1]
  • Colombia: Familias en Acción [1]
  • Honduras: The Family Allowance Program (PRAF II) created in 1998, based on the earlier PRAF I program created in 1990 [2]
  • Jamaica: Programme of Advancement Through Health and Education (PATH), administered by the Ministry of Labour and Social Security [1]
  • Indonesia: Program Keluarga Harapan
  • Malawi [1]
  • Mexico: Oportunidades, established in 2002 based on the program Progresa created in 1997
  • Guatemala: Mi Familia Progresa
  • Nicaragua: Social Protection Network, established in 2000 and implemented by the Social Emergency Fund (FISE). [1] This program was terminated in 2005. [3]
  • Pakistan: Benazir Income Support Programme
  • Panama: Red de Oportunidades
  • Philippines: Department of Social Welfare and Development - Pantawid Pamilyang Pilipino Program (DSWD-4Ps)
  • Peru: Juntos, established in 2005
  • Zambia [1]
  • Turkey: Şartlı Nakit Transferi, established in 2003 and implemented by the Social Assistance and Solidarity General Directorate (Sosyal Yardımlaşma ve Dayanışma Genel Müdürlüğü)
  • Egypt: Program Minhet El-Osra, began in 2009, currently being piloted in an urban slum in Cairo, Ain Es-Sira, and 65 villages in rural Upper Egypt by the Egyptian Ministry of Social Solidarity

Conditional Cash Transfers in Latin America

Many countries in Latin America are now using CCT Programs as a major tool of their social policy since they have been proven to be very effective in helping poor families. Although the conditions and amounts of money may vary from country to country, ranging from $5 to $33 per child,[4]in general these programs provide money to poor families under the condition that those transfers are used as an investment on their children’s human capital, such as regular school attendance and basic preventive health care. The purpose of these programs is to address the inter-generational transmission of poverty and to foster social inclusion by explicitly targeting the poor, focusing on children, delivering transfers to women, and changing social accountability relationships between beneficiaries, service providers and governments.[5] Most of these transfer schemes are now benefiting around 110 million people in the region, and are considered relatively cheap, costing around 0.5% of their GDP. [6]

Conditional cash transfer programs have been proven to be very effective in reducing poverty in the short term since they have helped to increase household income and consumption in poor families.They have also worked effectively in increasing school enrollment and attendance, especially in middle school. A substantial improvement in health and nutrition of the children that benefit from these programs has been acknowledged. [7] However, studies by the UNDP have shown that conditional cash transfers did not represent a significant increase in the quality of education and in learning, nor in significant increases in salaries, once the recipients entered the labor force.

CCT Programs have been proved to be very well-targeted and effective in reaching the poor and the excluded groups, notably the extreme poor living outside the reach of social protection programs tied with formal sector employment. On average, 80% of the benefits go to the 40% poorest families.[8] The programs have also promoted equality of gender since they provide larger funds to girls given that it is common that drop out earlier from school, so this has increased their enrollment and attendance to secondary levels of education. In the long run, these investments may also yield to significant changes in women’s empowerment and insertion in economic networks.[9]

Conditional Cash Transfers in Africa

While most conditional cash transfer programs are located in Latin America, a significant amount of research has been conducted regarding the implementation of these programs in Africa. In addition, programs are looking to the Latin America for examples on how to implement these programs. While there are a few unconditional cash transfer programs in Africa being tested (SeeCash Transfers) two conditional cash transfer programs in Africa are currently being implemented.

Malawi

The Mchinji Pilot Social Cash Transfer Scheme is part of the larger Malawi Social Protection Policy and Framework, and begain in April 2006. It is mainly financed by UNICEF and the National AIDS Commission. [10]The objectives of the scheme are to reduce poverty of people in the pilot area who are ultra poor and labor constrained, increase school enrolment and attendance, and to generate information regarding the feasibility of a cash transfer program as part of a Social Protection Programme for Malawi. The goal for this program is to reduce the ultra poverty rate from the 22% rate in 2007 to 10% by 2015. [11]

This program targets those households that are ultra poor (Seepoverty for definition) and those who are labor constrained, defined as a household which has no able bodied members ages 19-64 who can work due to chronic sickness or disability, or a household which has one able bodied member but has to care for more than 3 dependents. About 22% of Malawi as of 2007 was ultra poor, living on less than 20 cents a day, and of that group 10% are labor constrained. [12] The program would give anywhere from MK 600 (USD 4) monthly for a one person household to MK 1,800 (USD 13) monthly for a four or more person family. In addition, there will be an added bonus of MK200 for children enrolled in primary school and MK 400 for children enrolled in secondary school. [13] The location for the program is in the Mchinji District, which ranks as the 14th poorest district out of 28 in Malawi. It was chosen for its average poverty level of all the districts in Malawi as well as its proximity to the capital Lilongwe. [14]

Morocco

Since 2007 a pilot conditional cash transfer program has been researching its effectiveness in Morocco, organized by the World Bank. The program targets poor regions of Morocco with high drop out rates, and should cover 160,000 households by the time of completion of the program in 2010. [15] The pilot program is a comparative test that has four treatment groups. One group is receiving unconditional cash transfers, regardless of child school attendance. The next three are given conditional cash transfers to families of children grades 3-6 based on the childs attendance at school. The three treatment groups vary in how attendance is monitored, ranging from monitoring attendance based on teacher’s report, all the way to a sophisticated system involving monitoring through biometric fingerprint machines. [16] In addition, within each classroom, which parent, the mother or father, is also randomized to see if the family benefits more from having the money targeted to one or the other. This study will bring research that assesses the importance of conditionality, monitoring, and targeting within a conditional cash transfer program. [17]

Obstacles and Failed Programs

Although the benefits of Conditional Cash Transfer programs across the world have been widely noted, there remains a series of obstacles to their success that have caused some programs to be stunted or terminated completely. [18].

External Factors

According to a comprehensive study done by Senior Research Analysts Laura Rawlings and Gloria Rubio of the World Bank, the beginning stages of program implementation present the challenge of creating a reliable implementation schedule. [19]. On many occasions, changes in political leadership, natural disasters, or changes in program administration have delayed the implementation schedule and lead to decreased efficiency or program termination [20]. An example of the negative outcomes of one such delay is provided by the UN Development Programme’s in-depth study of the short-lived Nicaragua’s Social Protection Network. According to the study, the movement of the program administration to the country’s Ministry of the Family caused a delay in efficiency and resources that, among other factors, lead to the program’s termination [21]. Delays can also be due to difficulties in developing the Program Management Information System (MIS). [22].

One such delay in Mexico’s Oportunidades program caused 27% of its targeted population to not receive any transfers after two years of implementation [23]. In addition to unscheduled delays, other external factors that can hinder a Conditional Cash Program’s success pertain to unexpected financial crisis. [24]According to a comprehensive assessment provided by the World Bank, the structure of Conditional Cash Transfer programs has not, as of yet, been adjusted to retain success in the event of a large financial crisis. [25] Primarily, Conditional Cash Transfer Programs are not flexible enough to extend benefits to households which fall into the program’s targeted population only during economic downturns. Thus, those not normally covered by the programs’ benefits may be harder hit than those who are, but will not be able to be assisted [26]

Exclusion in Targeting

Another common obstacle to success in most Conditional Cash Transfer Programs is exclusion of needy homes in the targeting process. In an assessment by the World Bank, much exclusion was due to remote communities’ inability to access schools or clinics. Many such communities fall into developing countries’ most poverty-stricken populations, but cannot follow through with conditionalities since the transportation costs to attend schools or hospital visits outweigh the benefits [27]. Furthermore, an evaluation of Mexico’s PROGRESA- Oportunidades program addresses the issue that those in poverty with debilitating illnesses can also be excluded from Conditional Cash Transfer Programs due to their physical inability to accomplish the conditionalities [28].

Exclusion has also been noted by both the World Bank study and the PROGRESA-Oportunidades evaluation evident in both community-based targeting and self-targeting approaches. In the case of self-targeting, used by Mexico’s PROGRESA-Oportunidades, working women may be excluded from the program because they are unable to miss work to either register or fully accomplish the conditionalities Latapi, Augustín and Mercedes González de la Rocha. [29]. In the case of community-based targeting, the World Bank study notes that the extremely poor who may live in generally middle-class communities will be excluded [30]

Distrust and Lack of Information

The phenomena of targeted populations’ distrust of the program due to lack of adequate information has been noted by at least three case studies to be a leading factor in the Conditional Cash Transfer programs’ downfalls. The extensive study by the UN Development Programme on Nicaragua’s Social Protection Network (RPS) reveals that the level of distrust of the program was so high that a domestic publicity campaign could have possibly saved the RPS from extinction [31].. This high level of domestic distrust was due, in part, to efforts to politicize the program. [32].

One report addressed in the UN Development Programme’s study stated that RPS employees were approached by members of the government who demanded that half their salaries be donated to the party in power. Although the RPS was successful in avoiding the threats, it was later revealed that the RPS was the only Nicaraguan institution of its kind not making governmental contributions [33]. This same level of distrust is reflected in a study on the feasibility of a Haitian CCT made by the International Food Policy Research Institute. In the focus group they interviewed, almost all subjects expressed a “profound lack of faith” in the Haitian government. Instead, they preferred that the Conditional Cash Transfer Programs be implemented by community committees or NGO’s [34].

However, this distrust in the federal governments’ ability to fairly implement Conditional Cash Transfer programs is not strictly limited to developing countries. In an article in the New York Times addressing the termination of the pilot Conditional Cash Transfer Program, Opportunity NYC, the committee leader of one of its lending institutions stated that people were distrustful and confused by the program’s intricacies. New York’s deputy mayor for health and human services added that many busy and stressed households were not being able to handle the wealth of conditions they had to complete since they were not efficiently educated about the program [35].

Unconditional vs. Conditional Cash Transfers

There is currently much discussion about whether conditionality, or conditions for the cash transfer, is necessary or important to a cash transfer program. Research, such as the pilot conditional cash transfer program in Morocco, is looking at the importance of conditionality. One report looks at data from Mexico’s Oportunidades/Progresa program. It looks at families who accidentally did not receive forms that monitor school attendance, and therefore received unconditional cash transfers, and compares them with those households that did receive the forms. It was shown that conditionality had the strongest impact on children’s attendance to secondary school, as enrollment rates in secondary school were higher for those that received the forms.[36]

Another report on an experiment in Malawi is researching the importance of conditionality among families with school age girls. The program was conducted, and data was collected between October 2007 and June 2010. [37] They found that the treatment arm providing conditional cash transfer programs had higher enrollment rates, as well as higher scores in independently administered tests of cognitive ability, mathematics and English reading comprehension. However, the UCT treatment arm had a much lower incidence of pregnancy and marriage among school age girls.

A strong argument against the conditionality of social cash transfers is proposed by poponents of a human rights based approach to development cooperation. From a human rights perspective, cash transfers are a means to ensure the human rights to social protection and an adequate standard of living for all members of society, including first and foremost the fundamental right to food. States have the duty to ensure those rights with a maximum of available resources. While reducing poverty in general, conditional cash transfers have shown to often exclude the one's who need it the most, violating the human rights principle of non-discrimination and equality [38] A system of social protection or development aid that relies only or predominantly on conditional cash transfers misunderstands the fact that a minimum of social assistance is an accepted and universal human right.

See also

Specific programs:

References

  1. ^ a b c d e f Gustavo Nigenda, Maria Gonzalez-Robledo:Lessons offered by Latin America's cash transfer programs, Mexican Health Foundation, Centre for Social and Economic Analysis, 2005, accessed on March 22, 2009
  2. ^ IFPRI: The cost of poverty alleviation transfer programs, accessed on April 8, 2010
  3. ^ Moore, Charity. “Nicaragua’s Red de Proteccion Social: An Exemplary but Short-lived Conditional Cash Transfer Program.” International Policy Center for Inclusive Growth, no.17, (2009): 1-42.
  4. ^ Societies on the Move (2010, September 11). The Economist. 396(8699), pp. 11-15
  5. ^ De la Brière, Bénédicte and Rawlings, Laura B. (2006). Examining Conditional Cash Transfer Programs: A Role for Increased Social Inclusion? Social Safety Net Primer Papers. The World Bank
  6. ^ Societies on the Move (2010, September 11). The Economist. 396(8699), pp. 11-15
  7. ^ Actuar Sobre el Futuro: Romper la Transmisión Intergeneracional de la Igualdad (2010). Regional Human Development Report for Latin America and the Caribbean. UNDP
  8. ^ De la Brière, Bénédicte and Rawlings, Laura B. (2006). Examining Conditional Cash Transfer Programs: A Role for Increased Social Inclusion? Social Safety Net Primer Papers. The World Bank
  9. ^ De la Brière, Bénédicte and Rawlings, Laura B. (2006). Examining Conditional Cash Transfer Programs: A Role for Increased Social Inclusion? Social Safety Net Primer Papers. The World Bank
  10. ^ Schubert, Bernd, and Mayke Huijbregts. The Malawi Social Cash Transfer Pilot Scheme, Preliminary Lessons Learned. Tech. New York: UNICEF, 2006. Print. Social Protection Initiatives for Children, Women and Families: An Analysis of Recent Experiences.
  11. ^ Schubert, Bernd, and Mayke Huijbregts. The Malawi Social Cash Transfer Pilot Scheme, Preliminary Lessons Learned. Tech. New York: UNICEF, 2006. Print. Social Protection Initiatives for Children, Women and Families: An Analysis of Recent Experiences.
  12. ^ Schubert, Bernd, and Mayke Huijbregts. The Malawi Social Cash Transfer Pilot Scheme, Preliminary Lessons Learned. Tech. New York: UNICEF, 2006. Print. Social Protection Initiatives for Children, Women and Families: An Analysis of Recent Experiences.
  13. ^ Schubert, Bernd, and Mayke Huijbregts. The Malawi Social Cash Transfer Pilot Scheme, Preliminary Lessons Learned. Tech. New York: UNICEF, 2006. Print. Social Protection Initiatives for Children, Women and Families: An Analysis of Recent Experiences.
  14. ^ Schubert, Bernd, and Mayke Huijbregts. The Malawi Social Cash Transfer Pilot Scheme, Preliminary Lessons Learned. Tech. New York: UNICEF, 2006. Print. Social Protection Initiatives for Children, Women and Families: An Analysis of Recent Experiences.
  15. ^ "Morocco: Conditional Cash Transfers and Education." Middle East and North Africa - Morocco: Conditional Cash Transfers and Education. World Bank, 2007. Web. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/0,,contentMDK:22705763~pagePK:146736~piPK:226340~theSitePK:256299,00.html>.
  16. ^ "Morocco: Conditional Cash Transfers and Education." Middle East and North Africa - Morocco: Conditional Cash Transfers and Education. World Bank, 2007. Web. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/0,,contentMDK:22705763~pagePK:146736~piPK:226340~theSitePK:256299,00.html>.
  17. ^ "Morocco: Conditional Cash Transfers and Education." Middle East and North Africa - Morocco: Conditional Cash Transfers and Education. World Bank, 2007. Web. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/0,,contentMDK:22705763~pagePK:146736~piPK:226340~theSitePK:256299,00.html>.
  18. ^ Rawlings, Laura and Gloria Rubio. “Evaluating the Impact of CCT Programs: Lessons from Latin America.” World Bank Working Paper Research Policy, no. 3119 (August 2003): 1-25.
  19. ^ Rawlings, Laura and Gloria Rubio. “Evaluating the Impact of CCT Programs: Lessons from Latin America.” World Bank Working Paper Research Policy, no. 3119 (August 2003): 23
  20. ^ Rawlings, Laura and Gloria Rubio. “Evaluating the Impact of CCT Programs: Lessons from Latin America.” World Bank Working Paper Research Policy, no. 3119 (August 2003): 23
  21. ^ Moore, Charity. “Nicaragua’s Red de Proteccion Social: An Exemplary but Short-lived Conditional Cash Transfer Program.” International Policy Center for Inclusive Growth, no.17, (2009): 1-42.
  22. ^ Rawlings, Laura and Gloria Rubio. “Evaluating the Impact of CCT Programs: Lessons from Latin America.” World Bank Working Paper Research Policy, no. 3119 (August 2003): 20.
  23. ^ Rawlings, Laura and Gloria Rubio. “Evaluating the Impact of CCT Programs: Lessons from Latin America.” World Bank Working Paper Research Policy, no. 3119 (August 2003): 20.
  24. ^ Fizbein, Ariel and Norbert Shaby. “Conditional Cash Transfers: Reducing Present and Future Poverty.” The World Bank. (2009): 125.
  25. ^ Fizbein, Ariel and Norbert Shaby. “Conditional Cash Transfers: Reducing Present and Future Poverty.” The World Bank. (2009): 125.
  26. ^ Fizbein, Ariel and Norbert Shaby. “Conditional Cash Transfers: Reducing Present and Future Poverty.” The World Bank. (2009): 125.
  27. ^ Fizbein, Ariel and Norbert Shaby. “Conditional Cash Transfers: Reducing Present and Future Poverty.” The World Bank. (2009): 1- 245
  28. ^ Latapi, Augustín and Mercedes González de la Rocha. “Girls, Mothers,and Poverty Reduction in Mexico: Evaluating Progresa- Oportunidades” in Shahra Razavi (ed), The Gendered Impacts of Liberalization: Towards “Embedded Liberalism”? London and New York: Routledge: 267- 289.
  29. ^ “Girls, Mothers,and Poverty Reduction in Mexico: Evaluating Progresa- Oportunidades” in Shahra Razavi (ed), The Gendered Impacts of Liberalization: Towards “Embedded Liberalism”? London and New York: Routledge: 267- 289.
  30. ^ Fizbein, Ariel and Norbert Shaby. “Conditional Cash Transfers: Reducing Present and Future Poverty.” The World Bank. (2009): 1- 245.
  31. ^ Moore, Charity. “Nicaragua’s Red de Proteccion Social: An Exemplary but Short-lived Conditional Cash Transfer Program.” International Policy Center for Inclusive Growth, no.17, (2009): 1-42.
  32. ^ Moore, Charity. “Nicaragua’s Red de Proteccion Social: An Exemplary but Short-lived Conditional Cash Transfer Program.” International Policy Center for Inclusive Growth, no.17, (2009): 40.
  33. ^ Moore, Charity. “Nicaragua’s Red de Proteccion Social: An Exemplary but Short-lived Conditional Cash Transfer Program.” International Policy Center for Inclusive Growth, no.17, (2009): 40.
  34. ^ Cohen, Mark and Dora Weissman. “Implementing a Conditional Cash Transfer Program In Haiti: Opportunities and Challenges.” The International Food Policy Research Center. 2007
  35. ^ Bosman, Julie. “City will stop paying poor for good behavior.” New York Times. March 30 2010
  36. ^ Brauw, Alan De, and John Hoddinott. "Must Conditional Cash Transfer Programs Be Conditioned to Be Effective? The Impact of Conditioning Transfers on School Enrollment in Mexico." Journal of Development Economics (2010). Print.
  37. ^ Baird, Sarah, Craig McIntosh, and Berk Ozler. Cash or Condition? Evidence from a Cash Transfer Experiment. Working paper no. 5259. Vol. 45. World Bank, 2010. Print. Impact Evaluation Ser.
  38. ^ Künnemann, Ralf and Ralf Leonhard. A Human Rights View of Social Cash Transfers for Achieving the Millennium Development Goals. Brot für die Welt, Evangelischer Entwicklungsdienst, 2008.

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