33365 World Bank Social Safety Nets Primer Notes 2004 No. 15 A New Approach to Social Assistance: Latin America's Experience with Conditional Cash Transfer Programs Conditional cash transfers (CCTs) are an inno- inter-generational cycle of poverty, as well as vative and increasingly popular approach to providing income support as a means of social assistance. They provide money to poor improving consumption in the short-term; families contingent upon certain behavior, usu- ally investments in human capital such as keep- · Targeting the poor usually through both poverty ing children in school or taking them to health maps to identify geographic areas and proxy centers on a regular basis. These programs are means tests to select individual households; perhaps the clearest policy manifestation of a new line of thinking on the long-term role of · Providing cash, which is more flexible, efficient social assistance programs. Not only are they and cost-effective than in-kind transfers. instruments for short-term poverty alleviation, but they also encompass longer-term economic · Fostering synergies in human development by growth and human capital development objec- focusing on the complementarities between tives. They have been adopted internationally investments in health, nutrition and educa- and in several countries they have been scaled tion. up to become integral components of poverty alleviation strategies. · Using evaluations strategically. The provision of sound, empirically based evidence of effec- An Innovation in Social Assistance tiveness has facilitated the scaling up of CCT Latin America has been at the forefront of intro- programs and helped maintain their continu- ducing CCT programs. The first generation of ity in the face of changing political regimes. these programs, established mainly in the late 1990's in Brazil, Colombia, Honduras, Jamaica, Findings Nicaragua and Mexico, sought to improve upon In a marked departure from past practice in Latin traditional social assistance programs in a vari- America, the first generation of CCT programs ety of ways: prioritized the early use of technically rigorous impact evaluations. These new programs have · Changing accountability relationships by provid- been accompanied by systematic efforts to assess ing cash grants directly to poor households, their impact on human capital accumulation as conditioning the transfer upon the consump- well as understand their broader impact on tion of health and education services, and tar- household's behavior. CCTs are administratively geting mothers as the recipients of the grants; efficient and they have been successful in addressing many of the criticisms of earlier meth- · Addressing both current and future poverty by ods of social assistance such as poor poverty tar- seeking to foster human capital accumulation geting, disincentive effects and limited welfare among the young as a means of breaking the impacts. A recent review of CCT programs' tar- Laura B. Rawlings prepared this note based on her paper "A New Approach to Social Assistance: Latin America's Experi- ence with Conditional Cash Transfer Programs." 2004. Social Protection Discussion Paper No. 0416. World Bank. Wash- ington, D.C. en to en poor poor 4-24 vices other egnant persons to to childr under and en ser 0-5 access in pr childr en 65; destitute e en lactating geted geted geted car ential with with with and nutrition childr old. Caribbean childr over tar tar egnant malnourished tar efer and e e pr e childr pr 65. ar years Nutrition ar while to and ar health to the ough women, and participating and/or elderly old 2-5 thr households egnant under geted households households grants en grants and not pr disabilities; -- -- ograms ee tar Health oorP 0-6 pr oorP women thr oorP e 0-5; women; with adults Cash households supplements specifically lactating months childr Cash households; ar households population th y poor get y 4 th have the rd 3 America arT with olled with with with olled y to for 11 6-15 enr - to who enr higher) st st 6-13 1 nd primar en (1 secondar and en primar 7-14 7-17 (2 6-12 of completed 6-17 8-18 y Latin in en and grades opportunities en en en en 2 childr households households households households childr in yet school grade grade primar olled rd Education oorP Childr oorP childr in grade) oorP th childr not 4 school oorP childr oorP childr in grade) (3 school oorP enr school generating ams for of en ogr health food e health food e income health Pr car car centers for for childr eate subsidy and cr Nutrition incentives e training and supply vices supplements and education incentives for car grant education package ser incentive to CCT grant health health 5 and oved grant mothers aims vices of -- -- Nutrition Health Demand (nutrition voucher) Supply health Nutrition for Health Health Cash consumption Basic ser Nutrition education Impr health Nutrition Cash Nutrition education Basic package under Supply Health 1. 2. 1. 2. 3. 1. 2. 1. 2. 3. 4. 5. 1. 2. .3 ogram 4. pr of for enewedr Components the voucher) ogram grants vices opulationP school quality school The grants pr ser grant incentives incentives schools grant for for y and incentive get transfer subsidy objectives. education grants -school engthening arT its for -- Demand (educational Supply primar Educational Support materials Str supply education Education Support materials Supply Education Cash Income After Bi-monthly school 1. 2. Education 1. 2. 3. 1. 2. 3. eligible oadened and e en br also of . of eme e and futur health eme ar ms involv- attain- capital extr childr and educer the status for extr and poverty net ove net school while school-age eak thus poverty mothers in educational those human br . labor particularly capital of en entr worst among among families impr safety and entr high accumulation safety among Oportunidades the risk), to educational, their in cur (i.e. est living to the educational educingr the a educational . cur child a nutritional Components education. es childr families as the capital help poverty as the human olled families, and ease ease , ease and name labor health and ve poor of ve enr educe educe educe ove en its adult Incr attainment poor R poverty a easing ease eby es Incr investment poor Ser the cle Incr attainment, outcomes, poverty R R Ser old poor omote and Objectiv 1. 2. Eradicate child ing incr ment 1. 2. Incr human of ther cir 1. 2. 3. 4. Impr health of childr Pr accumulation households poverty years changed 2004, A 20 ovements to Objectiv ubio up Mexico R impr 1. Brazil 1 PROGRES Acción, , and A students en Honduras 2002, housing Jamaica Protección Nicaragua ableT am Escola, Brazil II, ch Rawlings edit, 2001, de ogr AF TH, Mar ocr Pr Bolsa PETI, amiliasF In Since Colombia PR PA PROGRES Red Social, Source: 1 micr 2 y ever months family (US$46.3) month household first per family the eligible per per ) en. L$660 per year per during childr y (US$20) e Nutrition incentive mex$240-265/boy/month per enc (US$6,020)/facility/year member (US$13 mor and voucher: (US$9) (US$34) or Caribbean 6 Curr 5 46500 supply between month family month for conditionalities vg. months om the size Health Local -- -- Col$ per Health per A L$87,315 J$500 household of Mex$125 per (1999) C$480 2 fr R$150 conditions. cement varied child. and and y of ansfer and en Tr olled (US$12) C$275 enfor school ever (US$0.7) per enr (US$6) + year the cement childr transfers child school grade for between months 3-4 grade per for by per C$10 2 enfor school schools 4 incentive: by support: y evented for y America y (US$6-19) month pr y states month month (US$17) family child per enc oss (US$11-17) month per Col$28,000:y voucher: ever stringent per (US$4,000)/school/year R$100 per per secondar R$45 (US$58) supply varies:y 5 system material incentive: less en, secondar US$25-32/child/month C$240 Latin Curr ­ acr Col$14,000:y (US$9)/child/mo varies:y per per to for family child child 828 year student led childr ); US$20/year/child mation th year in Education Local R$15 per ariesV $R25-39 child rimarP months 6 per Secondar per verage Educational L$ per A L$57,940 J$500 rimarP or US$8-17/child/month US$11/year/child materials Secondar gender + materials Grant: 2 School (US$20) Supply per inf ums to per pating d , ser (3r ams partici ed visits ed year Mex$190 for y visits health for vaccine grade ogr 1-2 per ed at and management of the and Pr equirr equirr for and AF on visits development center es visits child e the the visits household equirr centers e PR supply R$50 CCT beneficiar car all is and the car lectur monitoring; health the the olled with health with by by of enr of Nutrition attendance depending of health health vaccinations; to with health owth with of of health owth talks transfer and gr varies gr oblems the, school y Size 3 mother nutrition pr egular equency egular development US$75) Health -- - -- - R child's monitoring Compliance fr Compliance number which age/status Compliance members number and and R child's up-to-date attendance nutrition and primar the nambuco in erP per ansferrT - of six a omotion In year ximatelyo school delays Mex$80-165/child/month in absence pr per Conditionality after Ampliada maximum of both minimum than child. (appr school; grade attendance attendance the attendance each between and and in days and 85%, less school omotion example, Jornada absence attendance 9 pr of period orF for Mex$100 Mex$750 m varied is school period school school cycle annually automatic ter ollment school school rate ollment ollment; grade of month eceivedr 85% 80% ogram period. 80% per and school month pr enr of enr enr unexcused conditions. y per 3-month participation 2-month (maximum of two-month school all practice least R$25/per a least least a days a ced the is primar households Education At in At and school At in School 7 3-month Minimum 85% absence School attendance monthly School days in and for enfor household Conditionality transfer not grants addition, per Nicaragua, 2. In have In 2004, income Colombia transfer Social, the ableT ubio R ograms educational Brazil Mexico pr gipe, Acción, , and monthly A Ser 1999, en Honduras some of implementation. Brazil Jamaica and Protección am Escola, II, end de Rawlings maximum ogr AF TH, practice, ogram Bahia the Mex$245-305/girl/month. pr Pr Bolsa PETI, amiliasF In In At The PR PA PROGRES Red Nicaragua Source: 3 of 4 5 and 6 geting concludes that more than 80% of the ben- efforts are being made to strengthen the capac- efits reach the poorest 40% of the families. Clear ity and autonomy of local governments. evidence of success is provided by programs in Brazil, Colombia, Mexico and Nicaragua: · Without greater attention to the provision of quality services, CCT program conditionali- · Educational impact: In Nicaragua, primary ties run the risk of mandating the poor's use school enrollment rates increased nearly 22 of low quality health and education services, percentage points in the treatment areas. In thus tying them to ineffective service Mexico, both primary and secondary school providers and undermining the program's enrollment rates rose, with a greater impact potential impact on long-term welfare. There on girls' enrollment. is a clear need to focus on coordination with those responsible for the supply of health and · Child labor: CCT programs in Mexico reduced education services to ensure quality service the probability of working among 8 to 17 year provision and effective coordination between olds by 10 to 14 per cent. demand and supply-side approaches. · Nutrition and Health: The PROGRESA evalua- · CCT programs have become the cornerstones tion in Mexico reveals a significant increase in of several countries' social assistance policies. nutrition monitoring and immunization rates. This has raised questions concerning their There was also evidence of a significant position within the broader social security impact on increasing child growth and lower- system--How can incentives be structured to ing the probability of stunting for children encourage families to graduate from social aged 12 to 36 months. In Colombia, the pro- assistance, while providing mechanisms for portion of children under 6 enrolled in growth transition? How can the needs of particular monitoring increased 37 percentage points populations be met as their circumstances and the incidence of acute diarrhea decreased. change? What can be done for equally needy families which fall outside of the demograph- · Consumption: CCTs in Colombia resulted in ic groups and/or geographic areas served by improved dietary intake. Evidence in CCT programs? Nicaragua suggests that CCT programs may help the poor protect their consumption dur- · Targeting practices have raised concerns. ing times of crisis. Proxy means tests are often seen as fostering discord within communities, lacking in trans- Challenges parency from beneficiaries' perspectives, and Despite these promising initial results, several not being amenable to households' changing concerns have been voiced about CCT programs: situations particularly as a counter-cyclical tool in times of crisis. · From an institutional design perspective, crit- ics contend that CCTs may distract from the · Context and scope must also be considered. more difficult task of reforming inefficient Positive evaluation results from a handful of public services, notably health and education programs do not imply that these experiences and social insurance programs. Others point to can be replicated under different circum- what is often perceived as overly-centralized stances, nor are CCT programs likely to be administration, a concern with particular reso- effective in addressing problems beyond those nance in countries where democratically-elect- they have been designed to take on. ed governments are in their infancy and where The World Bank Social Safety Nets Primer series is intended to provide a practical resource for those engaged in the design and implementation of safety net programs around the world. Readers will find information on good practices for a variety of types of interventions, country con- texts, themes and target groups, as well as current thinking on the role of social safety nets in the broader development agenda. World Bank, Human Development Network Social Protection, Social Safety Nets http://www.worldbank.org/safetynets Printed on 100% post-consumer recycled paper