Imagine this: You open your mail and it says that you are owed $1,200 from overpaid taxes! After recovering from your elation, you read on. The letter requests you to choose if you would like to be paid over the next year in increments of $100 every month or $300 every three months?
Social safety nets – predictable cash grants to poor households often in exchange for children going to school or going for regular health check-ups – have become one of the most effective poverty reduction strategies, helping the poor and vulnerable cope with crises and shocks. Each year, safety net programs in developing countries lift an estimated 69 million people living in absolute poverty and uplifting some 97 million people from the bottom 20 percent – a substantial contribution in the global fight against poverty.
I first visited Madagascar in 1985 as a student doing research with FOFIFA, Madagascar’s national center for agricultural research. I was fortunate to be able to come back in the early 1990s as a task team leader for a project funded by the World Bank, at a time when the Bank was restructuring its projects to respond to drought in southern Madagascar. Over two decades later, here I am again in the South of this beautiful country, which is suffering again from drought and continues to be counted among the poorest countries in the world.
Cash transfers are great – lots of people are telling you that on a continuous basis. However, it is an open question as to whether such programs can improve the wellbeing of their beneficiaries well after the cessation of support. As cash transfer programs continue to grow as major vehicles for social protection, it is increasingly important to understand if these programs break the cycle of intergenerational poverty, or whether the benefits simply evaporate when the money runs out…
This post was co-authored with Katrina Kosec of IFPRI.
A whirlwind, surely incomplete tour of cash transfer impacts on health
Your run-of-the-mill conditional cash transfer (CCT) program has significant impacts on health-seeking behavior. Specifically, there are conditions (or co-responsibilities, if you prefer) that children get to school and/or that they get vaccinated or have some wellness visits. While the school enrollment effects are well established, the effects on both health seeking behavior and on health outcomes have been much more mixed. CCTs have led to better child nutritional status and improved child cognitive development in Nicaragua, better nutritional outcomes for a subset of children in Colombia, and had no impacts for child health in studies on Brazil and Honduras. CCTs conditioned only on school enrollment did not lower HIV infections among adolescent girls in South Africa; and in Indonesia CCTs increased health visits but did not translate into measurably improved health. Unconditional cash transfer programs have also had mixed results on health, with better mental health and food consumption in Kenya, better anthropometric outcomes for girls (not boys) in South Africa, no average impacts (although some for the poorest quarter) on child outcomes in Ecuador, and no average impacts on maternal health care utilization in Zambia (albeit yes effects for women with better access to such services).
Subsidies to increase utilization are used in all sorts of fields and I have read more than my fair share of CCT papers. However, until last week, I had not come across a scheme that paid people to purchase their urine. Given that I am traveling and the fact that I am missing Halloween, I thought I’d share (I hope it’s not TMI)…
Here is the abstract of an article by Tilley and Günther (2016), published in Sustainability:
“In the developing world, having access to a toilet does not necessarily imply use: infrequent or non-use limits the desired health outcomes of improved sanitation. We examine the sanitation situation in a rural part of South Africa where recipients of novel, waterless “urine-diverting dry toilets” are not regularly using them. In order to determine if small, conditional cash transfers (CCT) could motivate families to use their toilets more, we paid for urine via different incentive-based interventions: two were based on volumetric pricing and the third was a flat-rate payment (irrespective of volume). A flat-rate payment (approx. €1) resulted in the highest rates of regular (weekly) participation at 59%. The low volumetric payment (approx. €0.05/L) led to regular participation rates of only 12% and no increase in toilet use. The high volumetric payment (approx. €0.1/L) resulted in lower rates of regular participation (35%), but increased the average urine production per household per day by 74%. As a first example of conditional cash transfers being used in the sanitation sector, we show that they are an accepted and effective tool for increasing toilet use, while putting small cash payments in the hands of poor, largely unemployed populations in rural South Africa.”
On September 30, the Guardian ran several articles (see here, here, and an editorial here) linking the halving of Peru’s stunting rate (from 28 to 14% between mid-2000s and 2015) to its CCT program Juntos. Of course, it is great to hear that the share of stunted children in Peru declined dramatically over a short period. However, as I know that while CCT programs (conditional or not) have been successful in improving various outcomes including child health, the effect sizes are never this dramatic, I was curious to see whether the decline was part of a secular trend in Peru or actually could be attributed primarily to Juntos…