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Conditional Cash Transfers Programmes (CCTs)

Updated by Carla Alcobia on 23.01.2014

Conditional Cash Transfer Programmes (CCTs)

Conditional cash transfer programmes (CCTs) are a special form of social assistance schemes which provides cash to families subject to the condition that they fulfil specific behavioural requirements. These conditions oblige individuals to satisfy some action associated with human development goals. This may include that parents must ensure their children to attend school regularly (typically 85–90 per cent attendance) or that they utilize basic preventative nutrition and health-care services, such as vaccination programmes or maternal and post-natal check-ups. CCTs are usually targeted towards the poor through a means-test, proxy means-test or geographical targeting.



By incorporating access to a range of basic services and enhancing the capabilities of poor people, CCTs aim to address directly the diverse factors underlying poverty and to provide an escape from poverty over the long term. For instance, ensuring children’s access to education is especially beneficial, as it helps to reduce child labour, which not only represents a violation of children’s rights, but also tends to entrap them in lower skilled/poorly paid jobs when adults.

The most widely known schemes are the Oportunidades schemes in Mexico, the Chile Solidario programme in Chile; and the Bolsa Família scheme in Brazil. Bolsa Família, roughly translated as “family grant” reaches around 11.3 million families – 46 million people, corresponding to a quarter of Brazil’s population – at a cost of US$3.9 billion (0.4 per cent of the GDP). Similar programmes were implemented in 16 Latin American countries – covering around 70 million people or 12 per cent of the population – and continue to be increasingly popular in other regions. However, there has been debate over the impact and the implications of conditions (see "Potential and limitations of CCTs") for the effectiveness of such schemes.♦


The Bolsa Família programme in Brazil

The Brazilian Bolsa Família programme is one of the largest social assistance programmes in the world. Conceived as part of integrated social policies, the programme has a double objective: (a) to reduce current poverty and inequality, by providing a minimum level of income for extremely poor families; and (b) to break the inter-generational transmission of poverty by making these transfers conditional on the compliance by beneficiaries with “human development” requirements (for example, children’s school attendance, attendance at vaccination clinics, and arrangement of prenatal visits). Evaluations show positive impacts on the reduction of poverty and inequality, contributing to the country’s recent progress in this respect, as well as on the level of children’s school attendance. While no significant negative impacts on labour supply have been noted, the programme appears to have generated a positive impact on female labour force participation – particularly in the lower-income deciles.


Potential and limitations of CCTs

Conditional cash transfers (CCTs) are considered to be innovative and distinctive for a number of reasons: (1) for their targeting mechanisms; (2) because beneficiaries receive cash instead of in-kind benefits; and (3) they often impose behavioural conditions on the recipient. However, there has been debate over the impact and the implications of conditions for the effectiveness of such schemes.

1. Human rights

The first argument is that human rights are unconditional, and as social security is a human right, it is therefore unacceptable to deny it through the enforcement of conditions. This problem is exacerbated by the fact that the fulfillment of the conditions depends both on the beneficiaries and on the availability and quality of basic social services. If such social services are not available or accessible to potential beneficiaries, this may lead to a de facto exclusion of a group of people, often the most vulnerable in remote areas. In addition, the opportunity costs (in terms of both money and time) of meeting the CCT programmes’ conditions may penalize the most vulnerable.

However, conditionality has also been advocated from a rights-based standpoint. It is argued that where conditions bind not only the beneficiaries but also the public authorities, such programmes can help to create the necessary conditions for the realization of the human rights to education and health, by exposing the limits of existing basic social services and encouraging their upgrading. If CCT programmes are associated with a large-scale upgrading of basic social services is conducted on a large scale, This may benefit not only beneficiaries of CCT programmes, but wider groups of the population.

2. Effectiveness

An argument for preferring CCTs is that conditions provide a strong incentive for families to invest in the health and education of their children. An evaluation of the impact of the imposition by Mexican CCT Oportunidades of education-related conditions on school enrolment and attendance showed a significant effect. However, evaluations of programmes where conditions were not strictly enforced suggest that the positive impact achieved might not be attributed to the conditions as such, but to the transfers provided and the associated promotion of health and education objectives. This is consistent with the favourable impact achieved by unconditional cash transfers (UCTs). In Brazil and Namibia, older persons spent much of their social pensions on children’s education in spite of the absence of conditions. Thus, the conditions themselves cannot automatically be assumed to be pivotal in satisfying human development goals. Nevertheless, the conditional element helps improve the political acceptance of social transfers directed at the poor.

CCTs can also have a number of drawbacks in terms of human development objectives. If, for example, a household fails to satisfy conditions on health, it may be excluded from other developmental benefits encompassed within the same CCT(s), such as reduced poverty and improved nutrition.

3. People’s “agency”

It is argued that because CCTs help access to health, education and higher incomes, they promote poor people’s “agency”. Conditionality can also strengthen the status of women and children within the household. This aspect can be particularly important, as traditionally they tend to have subordinate positions in the household. On the other hand, some see CCTs as representing a form of paternalism, showing little faith in the poor to know what is best for them and their families.

4. Replicability

An important question is whether CCTs can be made operational in countries other than the “early adopters” in Latin America.  For instance, countries with less developed infrastructure are likely to be hampered by major supply-side constraints, such as a lack of schools and clinics and limited budgetary resources. For many, there is a continuing concern that in low-income countries it may be more effective to redirect the resources needed to administer the conditions and use them to improve existing social services.

This debate is unlikely to be settled in the foreseeable future. Nevertheless, CCTs have become a promising new way of reducing poverty and improving human development outcomes.♦

 

Based on: International Labour Office (ILO),2011. Social Security for Social Justice and a Fair Globalization, (Geneva)


Main Resources

 

Conditional Cash Transfers: Reducing Present and Future Poverty
Fiszbein, A. and Schady, N., World Bank, 2009

 

Conditional Cash Transfer Programmes and Gender Vulnerabilities: Case Studies of Brazil, Chile and Colombia
Veras Soares, F. and Silva, E., ODI, 2010


Training

Designing and Implementing Social Transfer Programmes. 23 October - 5 November 2011, Chiang Mai, Thailand