Recent trends in the development agenda of Latin America: an analysis of conditional cash transfers

This paper analyses the characteristics, design and implementation factors contributing to the popularity of conditional cash transfers (CCT) in Latin America. It is based on an analysis of the Mexican Program of Education, Health and Nutrition (Progresa) and the Brazilian Bolsa Escola. The author examines the political economy contributing to their visibility among governments and multilateral donors.

From this assessment, it is found that that:

• some of the key factors shaping policy processes were political stability, bureaucratic implications, international pressure and leverage, as well as technical advice
• CCTs ranked fairly well with political feasibility, but still had a number of unresolved administrative and operational issues
• some of the targeting methods were seriously flawed
• while they have contributed to empowering women and generating multiplier effects in local economies, they also entailed significant private and social costs at the household and community levels
• CCTs were not percieved as effective safety nets for emergency situations
• these cash transfers were able to tackle several problems in a single policy response - through combining income transfers with demand-side incentives for long-run human capital accumulation.

In conclusion, the author recommends that governments ought to consider their own country specificities carefully before adopting CCTs indiscriminately; in that if a country’s macroeconomic model perpetuates inequality, limits productive investment, restricts employment and generates poverty, CCTs end up functioning as a mere relief measure with localised impacts. [adapted from author]