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Making Conditional Cash Transfer Programs More Efficient: Designing for Maximum Effect of the Conditionality

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  • Alain de Janvry
  • Elisabeth Sadoulet

Abstract

Conditional cash transfer programs are now used extensively to encourage poor parents to increase investments in their children's human capital. These programs can be large and expensive, motivating a quest for greater efficiency through increased impact of the programs' imposed conditions on human capital formation. This requires designing the programs' targeting and calibration rules specifically to achieve this result. Using data from the Progresa randomized experiment in Mexico, this article shows that large efficiency gains can be achieved by taking into account how much the probability of a child's enrollment is affected by a conditional transfer. Rules for targeting and calibration can be made easy to implement by selecting indicators that are simple, observable, and verifiable and that cannot be manipulated by beneficiaries. The Mexico case shows that these efficiency gains can be achieved without increasing inequality among poor households. Copyright 2006, Oxford University Press.

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Bibliographic Info

Article provided by World Bank Group in its journal The World Bank Economic Review.

Volume (Year): 20 (2006)
Issue (Month): 1 ()
Pages: 1-29

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Handle: RePEc:oup:wbecrv:v:20:y:2006:i:1:p:1-29

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Cited by:
  1. John Maluccio, 2008. "Household Targeting In Practice: The Nicaraguan Red De Protección Social," Middlebury College Working Paper Series 0802, Middlebury College, Department of Economics.
  2. Gatenio Gabel, Shirley, 2012. "Social protection and children in developing countries," Children and Youth Services Review, Elsevier, vol. 34(3), pages 537-545.
  3. Álvarez, Carola & Devoto, Florencia & Winters, Paul, 2008. "Why do Beneficiaries Leave the Safety Net in Mexico? A Study of the Effects of Conditionality on Dropouts," World Development, Elsevier, vol. 36(4), pages 641-658, April.
  4. Boomhower, Judson & Davis, Lucas W., 2014. "A credible approach for measuring inframarginal participation in energy efficiency programs," Journal of Public Economics, Elsevier, vol. 113(C), pages 67-79.
  5. Martin Persson, U. & Alpízar, Francisco, 2013. "Conditional Cash Transfers and Payments for Environmental Services—A Conceptual Framework for Explaining and Judging Differences in Outcomes," World Development, Elsevier, vol. 43(C), pages 124-137.
  6. Baird, Sarah & Özler, Berk, 2012. "Examining the reliability of self-reported data on school participation," Journal of Development Economics, Elsevier, vol. 98(1), pages 89-93.
  7. Asian Development Bank (ADB), 2012. "Framework of Inclusive Growth Indicators Key Indicators for Asia and the Pacific 2012 Special Supplement," ADB Reports RPT124910-3, Asian Development Bank (ADB), revised 09 Sep 2013.
  8. John A. Maluccio, 2009. "Household targeting in practice: The Nicaraguan Red de Protección Social," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 1-23.
  9. de Brauw, Alan & Hoddinott, John, 2008. "Must conditional cash transfer programs be conditioned to be effective?: The impact of conditioning transfers on school enrollment in Mexico," IFPRI discussion papers 757, International Food Policy Research Institute (IFPRI).
  10. Vladimir Ponczek, 2007. "Income And Bargaining Effects On Education And Health In Brazil," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 128, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  11. Fabio Veras Soares & Tatiana Britto, 2007. "Confronting Capacity Constraints on Conditional Cash Transfers in Latin America: the cases of El Salvador and Paraguay," Working Papers 38, International Policy Centre for Inclusive Growth.
  12. Estevan, Fernanda, 2013. "The impact of conditional cash transfers on public education expenditures: A political economy approach," European Journal of Political Economy, Elsevier, vol. 32(C), pages 268-284.
  13. Filmer, Deon & Schady, Norbert, 2011. "Does more cash in conditional cash transfer programs always lead to larger impacts on school attendance?," Journal of Development Economics, Elsevier, vol. 96(1), pages 150-157, September.
  14. Asha Gunawardena & Kanchana Wickramasinghe, 2011. "Targeting and Distribution of Post-Tsunami Aid in Sri Lanka : A Critical Appraisal," Working Papers id:3939, eSocialSciences.

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