Carl DeLine

Hallelujah, let’s have a party. People investing in people. Let’s get all excited and see what can be learned when people invest in people. The World Bank is picking up on the work of others and helping to carry it to impoverished communities.

Conditional Cash Transfers (CCTs)

Mexico: Mexico’s Oportunidades Program

Description: The World Bank describes Oportunidades as the principal anti-poverty program of the Mexican government, which helps poor families in rural and urban communities to invest in human capital—improving the education, health, and nutrition of their children-by providing cash transfers. The program’s ongoing evaluation process has strengthened its legitimacy in Mexico, leading to its expansion into urban areas, and to its support across political administrations and donors. So far, the results are extremely positive in the areas of school enrollment, health clinic attendance, education, and nutrition. The success of Oportunidades demonstrates that conditional cash transfer programs of this nature can be effective in reducing current poverty while improving children’s futures. In addition, it showed that it is feasible to carry out a targeted conditional cash transfer program on a very large scale even in poor isolated areas with few services, and in particular in a developing country with a limited welfare system.

CCTs are a recent, but popular, tool in the field of international development. CCT programs are designed to alleviate poverty in the short-term by providing additional income to poor families, and to break the inter-generational cycle of poverty in the long-term by promoting greater investments in human capital. CCT programs originated in the late 1990s in Mexico with the creation of a program called Progresa Oportunidades, which serves more than 20 million Mexican families, and has been replicated in more than 20 countries. Progresa and other CCT programs have been subject to rigorous evaluation, which has documented reductions in the incidence and severity of poverty, as well as improvements in school enrollment and completion, health outcomes, and the incidence of malnutrition.

Brazil: Bolsa Familia Program Scaling up Cash Transfers by Kathy Lindert, Senior Economist, LCSHS – World Bank

Executive Summary: In 2003, the government of Luiz Ignacio Lula da Silva launched a comprehensive program to stimulate growth and social progress. On the social side, the centerpiece was a sweeping reform of Brazil’s social safety net, the Bolsa Familia Program (BFP), which integrated four cash transfer programs into a single program under the umbrella of a new Ministry of Social Development. The transfers are made preferentially to women in each family. The program supports the formation of human capital at the family level by conditioning transfers on behaviors such as children’s school attendance, use of health cards, and other social services. Since its launch, the Bolsa Familia Program has grown exponentially, and by January 2005 had expanded to cover about 26.4 million people. By the end of 2006, about 44 million people are expected to be covered, at least two-thirds of whom are extremely poor. In terms of numbers of beneficiaries, the Bolsa Familia Program is by far the largest conditional cash transfer in the developing world. Its systems for beneficiary selection, monitoring and evaluation, quality control, and scaling up have implications that extend well beyond Brazil.

Philippines: Conditional Cash Transfer by Gill Bautista

“Give someone a fish, and they will eat for a day. Teach someone how to fish, and they will eat for a lifetime.” This is the opening phrase written in the recently approved government project, the Philippine Conditional Cash Transfer Program or Phil CCT. This program is aiming to alleviate the quality of living of the poorest citizens all over the country. The program is already operational as of this moment.

World Bank: Evaluating the Impact of Conditional Cash Transfer Programs by Laura B. Rawlings, Country Sector Leader for Central America in the Latin America and Caribbean Human Development Department at the World Bank.

Several developing economies have recently introduced conditional cash transfer programs, which provide money to poor families contingent on certain behavior, usually investments in human capital, such as sending children to school or bringing them to health centers. The approach is both an alternative to more traditional social assistance programs and a demand-side complement to the supply of health and education services. Unlike most development initiatives, conditional cash transfer programs have been subject to rigorous evaluations of their effectiveness using experimental or quasi-experimental methods. Evaluation results for programs launched in Colombia, Honduras, Jamaica, Mexico, Nicaragua, and Turkey reveal successes in addressing many of the failures in delivering social assistance, such as weak poverty targeting, disincentive effects, and limited welfare impacts. There is clear evidence of success from the first generation of programs in Colombia, Mexico, and Nicaragua in increasing enrollment rates, improving preventive health care, and raising household consumption. Many questions remain unanswered, however, including the potential of conditional cash transfer programs to function well under different conditions, to address a broader range of challenges among poor and vulnerable populations, and to prevent the intergenerational transmission of poverty.