Evaluating The Impact Of Conditional Cash Transfer Programs

Unlike most development initiatives, conditional cash transfer programs recently introduced in the Latin America and the Caribbean region have been subject to rigorous evaluations of their effectiveness. These programs provide money to poor families, conditional on certain behavior, usually investments in human capital-such as sending children to school or bringing them to health centers on a regular basis. Rawlings and Rubio review the experience in evaluating the impact of these programs, exploring the application of experimental and quasi-experimental evaluation methods and summarizing results from programs launched in Brazil, Honduras, Jamaica, Mexico, and Nicaragua. Evaluation results from the first generation of programs in Brazil, Mexico, and Nicaragua show that conditional cash transfer programs are effective in promoting human capital accumulation among poor households. There is clear evidence of success in increasing enrollment rates, improving preventive health care, and raising household consumption. Despite this promising evidence, many questions remain unanswered about the impact of conditional cash transfer programs, including those concerning their effectiveness under different country conditions and the sustainability of the welfare impacts.

Conditional Cash Transfer (CCT) programs aim to reduce poverty by making welfare programs conditional upon the receivers' actions. That is, 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. They have been hailed as a way of reducing inequality and helping households break out of a vicious cycle whereby poverty is transmitted from one generation to another. Do these and other claims make sense? Are they supported by the available empirical evidence? This volume seeks to answer these and other related questions. Specifically, it lays out a conceptual framework for thinking about the economic rationale for CCTs; it reviews the very rich evidence that has accumulated on CCTs; it discusses how the conceptual framework and the evidence on impacts should inform the design of CCT programs in practice; and it discusses how CCTs fit in the context of broader social policies. The authors show that there is considerable evidence that CCTs have improved the lives of poor people and argue that conditional cash transfers have been an effective way of redistributing income to the poor. They also recognize that even the best-designed and managed CCT cannot fulfill all of the needs of a comprehensive social protection system. They therefore need to be complemented with other interventions, such as workfare or employment programs, and social pensions.

Unlike most development initiatives, conditional cash transfer programs recently introduced in the Latin America and the Caribbean region have been subject to rigorous evaluations of their effectiveness. These programs provide money to poor families, conditional on certain behavior, usually investments in human capital - such as sending children to school or bringing them to health centers on a regular basis. Rawlings and Rubio review the experience in evaluating the impact of these programs, exploring the application of experimental and quasi-experimental evaluation methods and summarizing results from programs launched in Brazil, Honduras, Jamaica, Mexico, and Nicaragua. Evaluation results from the first generation of programs in Brazil, Mexico, and Nicaragua show that conditional cash transfer programs are effective in promoting human capital accumulation among poor households. There is clear evidence of success in increasing enrollment rates, improving preventive health care, and raising household consumption. Despite this promising evidence, many questions remain unanswered about the impact of conditional cash transfer programs, including those concerning their effectiveness under different country conditions and the sustainability of the welfare impacts.This paper - a product of the Human Development Sector Unit, Latin America and the Caribbean Region - is part of a larger effort in the region to assess the effectiveness of social protection programs.

In 2000, the Nicaraguan government implemented a conditional cash transfer program designed to improve the nutritional, health, and educational status of poor households, and thereby to reduce short- and long-term poverty. Based on the Mexican government's successful PROGRESA program, Nicaragua's Red de Proteccion Social (RPS) sought to supplement household income, reduce primary school dropout rates, and increase the health care and nutritional status of children under the age of five. This report represents IFPRI's evaluation of phase I of RPS. It shows that the program was effective in low-income areas and particularly effective when addressing health care and education needs. The report offers the first extensive assessment of a Nicaraguan government antipoverty program.

Cash transfers targeted to poor people, but conditional on some behavior on their part, such as school attendance or regular visits to health care facilities, are being adopted in a growing number of developing countries. Even where ex-post impact evaluations have been conducted, a number of policy-relevant counterfactual questions have remained unanswered. These are questions about the potential impact of changes in program design, such as benefit levels or the choice of the means-test, on both the current welfare and the behavioral response of household members. This paper proposes a method to simulate the effects of those alternative program designs on welfare and behavior, based on microeconometrically estimated models of household behavior. In an application to Brazil's recently introduced federal Bolsa Escola program, the authors find a surprisingly strong effect of the conditionality on school attendance, but a muted impact of the transfers on the reduction of current poverty and inequality levels.

Cash transfers targeted to poor people, but conditional on some behavior on their part - such as school attendance or regular visits to health care facilities - are being adopted in a growing number of developing countries. Even where ex-post impact evaluations have been conducted, a number of policy-relevant counterfactual questions have remained unanswered. These are questions about the potential impact of changes in program design - such as benefit levels or the choice of the means - test - on both the current welfare and the behavioral response of household members. Bourguignon, Ferreira, and Leite propose a method to simulate the effects of those alternative program designs on welfare and behavior based on microeconometrically estimated models of household behavior. In an application to Brazil's recently introduced federal Bolsa Escola program, the authors find a surprisingly strong effect of the conditionality on school attendance, but a muted impact of the transfers on the reduction of poverty and inequality levels. This paper - a product of the Poverty Team, Development Research Group - is part of a larger effort in the group to understand the impact of policies on the distribution of incomes.