Conditional cash transfer

Conditional Cash Transfer

A conditional cash transfer (CCT) is a program that provides money to low-income families contingent upon certain behavioral requirements. These requirements often include actions such as ensuring children attend school regularly or receiving vaccinations. CCTs are designed to reduce poverty by making welfare programs conditional upon the receivers' actions, thus encouraging positive behaviors that can lead to long-term benefits.

Overview

Conditional cash transfer programs are a form of social assistance that aim to break the cycle of poverty by addressing its root causes. By providing financial incentives for families to invest in their children's health and education, CCTs seek to improve human capital and promote economic development.

CCTs are typically targeted at poor households and are often implemented in developing countries. The programs are designed to address both immediate financial needs and long-term developmental goals. By requiring compliance with certain conditions, CCTs aim to ensure that the assistance provided leads to sustainable improvements in the beneficiaries' lives.

History

The concept of conditional cash transfers originated in Latin America in the late 1990s. One of the earliest and most well-known CCT programs is Mexico's Progresa (later renamed Oportunidades and then Prospera), which began in 1997. The success of Progresa inspired similar programs in other countries, such as Bolsa Família in Brazil and Familias en Acción in Colombia.

Mechanism

CCT programs typically involve the following components:

• Targeting: Identifying eligible households based on income or other criteria.
• Conditions: Setting specific requirements that beneficiaries must meet to receive payments, such as school attendance or health check-ups.
• Payments: Disbursing cash transfers to beneficiaries, often through bank accounts or mobile money.
• Monitoring: Ensuring compliance with conditions through regular checks and evaluations.

Impact

Research has shown that CCTs can have significant positive impacts on education and health outcomes. For example, they have been associated with increased school enrollment and attendance, improved child nutrition, and higher vaccination rates. However, the effectiveness of CCTs can vary depending on the design and implementation of the program.

Critics of CCTs argue that they may not address the underlying structural issues that contribute to poverty and that the conditions imposed can be burdensome for some families. Additionally, there is debate over whether unconditional cash transfers (UCTs) might be more effective in certain contexts.

Examples

• Progresa/Oportunidades/Prospera (Mexico)
• Bolsa Família (Brazil)
• Familias en Acción (Colombia)
• Pantawid Pamilyang Pilipino Program (Philippines)

Also see

• Unconditional cash transfer
• Social safety net
• Poverty alleviation
• Human capital