conditional cash transfers
Many policymakers are interested in the role of conditions in cash transfer programs. Do they improve outcomes of interest more than money alone? Are there trade-offs? Is there a role for conditions for political rather than technocratic reasons? It’s easy to extend the list of questions for a good while. However, before one can get to these questions, there is a much more basic question that needs to be answered (for any policymaker contemplating running one of these programs at any level): “What do you mean by a conditional (or unconditional) cash transfer program?”
Co-authored with Richard Akresh and Harounan Kazianga
Yesterday, in Part I of this post, we argued the extant empirical evidence suggests that the conditions cause a substantial amount of the desired behavior change intended by CCT programs. In other words: the “substitution effect” due to the condition may well be larger than the “income effect” of the transfers. For example, in the case of the Malawi experiment, the income effect was responsible for less than half of the total impact on school enrollment.
One of the questions discussed at the recent World Bank workshop on the "Second Generation of CCT Evaluations" (website, complete with at least some of the presentations, here) was the role of the first C in the performance of the CCT: how important is the condition in accounting for the outcomes of conditional cash transfer programs?
I am writing to follow up on Berk’s post about using regression discontinuity design to evaluate the impacts of conditional cash transfer (CCT) programs. It happens that some colleagues and I at the International Food Policy Research Institute recently completed two papers using a unique regression discontinuity design (RDD) to evaluate the impacts of El Salvador’s Comunidades Solidarias Rurales (CSR) program.
One size does not fit all in development policy, as World Bank President, Robert B. Zoellick, emphasized in a recent speech, “Democratizing Development Economics.” The right policies depend on the stage of economic development (amongst other things). What does that mean for the Bank’s overarching objective, a world free of poverty?
|Three construction workers return from a day of work as part of the Rural Roads project to improve access to markets in Rajasthan, India. Photo: Michael Foley|
The Bank’s policy dialogues in poor countries have long emphasized policies to promote economic growth as the main means of fighting income poverty. These include efforts to ensure “pro-poor growth,” such as by avoiding policy biases against labor-intensive production. However, direct redistributive policies in favor of the poor typically get far less attention.
It is not obvious why. Even some very poor countries have high inequality—in fact, some of the highest levels of income inequality in the world are found in poor countries (see the 2006 World Development Report: Equity and Development). And developing countries have redistributive policy options through tax and spending instruments (including cash transfers). There are concerns about trade-offs between equity and efficiency, though it can also be argued that high inequality is an impediment to economic growth. So should direct redistributive interventions play a bigger role?
CCTs, simply put, “are cash payments to poor households that meet certain behavioral requirements, generally related to children’s health care and education” (The World Bank). In other words, money is given to a qualified household if it can be demonstrated that children are in school or brought in for regular medical check-ups. It is, therefore, conditionality at the individual household level.
A massive media content analysis, conducted on thousands of newspaper articles over several years, suggests that press coverage was largely favorable toward the project. Positive and neutral stories outnumbered negative stories by a large margin over a five year period.