The relevance of conditional cash transfers in developing economy: the case of Muslim countries

Purpose - The purpose of this paper is to critically analyse the relevance of directly targeted poverty reduction programmes in Muslim countries by means of conditional cash transfers (CCTs). The paper analyses the best practices and lessons learnt to date and explores the practical issues to implement CCT poverty reduction programmes in Muslim countries. Design/methodology/approach - The methodology is based on the qualitative assessment drawn from CCTs implementation in Muslim countries, namely Bangladesh, Indonesia, Pakistan and Turkey. The methodology also identifies the practical issues including the use of Islamic instruments to implement CCT poverty reduction programmes. Findings - The analysis in Muslim countries suggests that CCT programmes have had a positive effect and that the costs are relatively affordable if implemented with appropriate programme designs. In many cases, there have been positive secondary effects over and above the primary goal of poverty reduction. The paper also argues that the concept of CCTs is in line with the underlying principle of Islam to eradicate poverty via cash distribution approach. Originality/value - A decade long experience in some Muslim countries demonstrates that social cash transfers (including CCTs) have a significant impact on reducing poverty and vulnerability and promoting human development. Since none of CCT programmes in Muslim countries explore and integrate the potential of Islamic instruments (Zakat, Sadaqat, Awqaf and Qard Al-Hassan), it is timely for governments, multinational development institutions and non-profit organizations to utilize these instruments to tackling poverty.