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Efficient Delivery of Cash Transfers to the Poor: Improving the Design of a Conditional Cash Transfer Program in Equador

Author

Listed:
  • Paul Carrillo

    (Department of Economics/Institute for International Economic Policy, George Washington University)

  • Juan Ponce Jarrin

    (Department of Economics, Facultad Latinoamericana de Ciencias Sociales Flacso)

Abstract

Many governments provide monetary transfers to low-income families. The mechanism through which these subsidies are distributed may contain several inefficiencies that diminish the net-value obtained by the recipients. In this paper, we build and estimate a behavioral dynamic model that allows us to evaluate the efficiency of current and alternative distribution mechanisms. The proposed model is simple and resembles the individuals decision to collect the transfer. To estimate it, we use data from a cash transfer program in Ecuador where recipients incur high transaction costs each time they collect their benefits. Despite its simplicity, our model is able to replicate the observed data remarkably well. We use it to simulate alternative payment mechanisms and show that an adequate design of the delivery of payments can substantially increase the value of cash transfer programs.

Suggested Citation

  • Paul Carrillo & Juan Ponce Jarrin, 2007. "Efficient Delivery of Cash Transfers to the Poor: Improving the Design of a Conditional Cash Transfer Program in Equador," Working Papers 2008-08, The George Washington University, Institute for International Economic Policy.
    • Handle: RePEc:gwi:wpaper:2008-08
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    File URL: http://www.gwu.edu/~iiep/assets/docs/papers/Carrillo_IIEPWP2008-8.pdf
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    Cited by:

    1. Ma Cecilia Catubig & Renato Villano & Brian Dollery, 2015. "Payment Schemes in Conditional Cash Transfer Programs: The Case of 4Ps in the Davao Region, Philippines," Administrative Sciences, MDPI, vol. 5(4), pages 1-20, November.

    More about this item

    Keywords

    Cash Transfer Programs; Behavioral Model; Distribution of Payments;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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