Conditional cash transfers and the equity-efficiency debate
AbstractDuring the past decade, the use of conditional cash transfers to increase investment in human capital has generated considerable excitement in both research and policy forums. Such schemes are being increasingly adopted in a number of contexts and countries to improve outcomes in health, education, and child labor as they aim to balance the goals of current and future poverty reduction. In this paper, the authors define any scheme requiring a specified course of action in order to receive a benefit as a conditional cash transfer. This definition includes cash transfers based on human capital investments, but is sufficiently broad to encompass other schemes such as work-fare programs or consumption transfers. The authors examine the rationales behind, the problems with, and the tradeoffs inherent to conditional cash transfer programs. They discuss two main concerns: low participation and fungibility. Low participation refers to the problem of program uptake. If individuals do not participate in the program, whether it was designed to increase human capital investment or to target resources, the program will not be successful. The problem of fungibility, however, depends on the rationale for the particular conditional cash transfer program. When used to increase efficiency,even when program uptake is high, program effects may be less than envisioned due to behavioral responses of households that lead to changes in the consumption of close substitutes. While researchers have typically addressed these issues separately, the authors emphasize the need for policymakers to incorporate a number of different factors in a comprehensive framework to design optimal conditional cash transfer schemes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3280.
Date of creation: 01 Apr 2004
Date of revision:
Early Child and Children's Health; Gender and Health; Montreal Protocol; Chemical&Petrochemical Industry; Roads&Highways;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-16 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Foster, Andrew D & Rosenzweig, Mark R, 1995.
"Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture,"
Journal of Political Economy,
University of Chicago Press, vol. 103(6), pages 1176-1209, December.
- Mark Rosenzweig & Andrew D. Foster, . "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Home Pages _068, University of Pennsylvania.
- Harold Alderman & Peter F. Orazem & Elizabeth M. Paterno, 2001.
"School Quality, School Cost, and the Public/Private School Choices of Low-Income Households in Pakistan,"
Journal of Human Resources,
University of Wisconsin Press, vol. 36(2), pages 304-326.
- Alderman, Harold & Orazem, Peter & Paterno, Elizabeth M., 2001. "School Quality, School Cost, and the Public/Private School Choices of Low-Income Households in Pakistan," Staff General Research Papers 1970, Iowa State University, Department of Economics.
- Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
- Alderman, Harold, 1987. "Allocation of goods through non-price mechanisms : Evidence on distribution by willingness to wait," Journal of Development Economics, Elsevier, vol. 25(1), pages 105-124, February.
- van de Walle, Dominique, 1998. "Targeting Revisited," World Bank Research Observer, World Bank Group, vol. 13(2), pages 231-48, August.
- Kaushik Basu, 1999.
"Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards,"
Journal of Economic Literature,
American Economic Association, vol. 37(3), pages 1083-1119, September.
- Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
- Anne Case & Angus Deaton, 1999. "School Inputs And Educational Outcomes In South Africa," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 1047-1084, August.
- David Stifel & Harold Alderman, 2006.
"The "Glass of Milk" Subsidy Program and Malnutrition in Peru,"
World Bank Economic Review,
World Bank Group, vol. 20(3), pages 421-448.
- Stifel, David & Alderman, Harold, 2003. "The"Glass of Milk"subsidy program and malnutrition in Peru," Policy Research Working Paper Series 3089, The World Bank.
- Ravallion, Martin & Wodon, Quentin, 2000.
"Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy,"
Royal Economic Society, vol. 110(462), pages C158-75, March.
- Ravallion, Martin & Wodon, Quentin, 1999. "Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy," Policy Research Working Paper Series 2116, The World Bank.
- Bourguignon, Francois & Ferreira, Francisco H. G. & Leite, Phillippe G., 2002.
"Ex-ante evaluation of conditional cash transfer programs: the case of bolsa escola,"
Policy Research Working Paper Series
2916, The World Bank.
- François Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2002. "Ex-ante Evaluation of Conditional Cash Transfer Programs: The Case of Bolsa Escola," William Davidson Institute Working Papers Series 516, William Davidson Institute at the University of Michigan.
- Tobin, James, 1970. "On Limiting the Domain of Inequality," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 263-77, October.
- Hanan G. Jacoby, 2002. "Is There an Intrahousehold "Flypaper Effect"? Evidence From a School Feeding Programme," Economic Journal, Royal Economic Society, vol. 112(476), pages 196-221, January.
- T. Paul Schultz, 2001. "School Subsidies for the Poor: Evaluating the Mexican Progresa Poverty Program," Working Papers 834, Economic Growth Center, Yale University.
- Emanuela Galasso & Martin Ravallion, 2004.
"Social Protection in a Crisis: Argentina's Plan Jefes y Jefas,"
World Bank Economic Review,
World Bank Group, vol. 18(3), pages 367-399.
- Galasso, Emanuela & Ravallion, Martin, 2003. "Social protection in a crisis - Argentina's Plan Jefes y Jefas," Policy Research Working Paper Series 3165, The World Bank.
- Besley, Timothy & Coate, Stephen, 1991.
"Public Provision of Private Goods and the Redistribution of Income,"
American Economic Review,
American Economic Association, vol. 81(4), pages 979-84, September.
- Besley, T. & Coate, S., 1989. "Public Provision Of Private Goods And The Redistribution Of Income," Papers 36, Princeton, Woodrow Wilson School - Discussion Paper.
- Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
- Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 463-480.
- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
- Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
- Ablo, Emmanuel & Reinikka, Ritva, 1998. "Do budgets really matter? - evidence from public spending on education and health in Uganda," Policy Research Working Paper Series 1926, The World Bank.
- Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
- Kalie Pauw & Liberty Mncube, 2007.
"Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints,"
07127, University of Cape Town, Development Policy Research Unit.
- Kalie Pauw & Liberty Mncube, 2007. "Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints," Country Study 8, International Policy Centre for Inclusive Growth.
- César P. Bouillon & Luis Tejerina, 2006.
"Do We Know What Works?: A Systematic Review of Impact Evaluations of Social Programs in Latin America and the Caribbean,"
23598, Inter-American Development Bank.
- César P. Bouillon & Luis Tejerina, 2006. "Do We Know What Works?: A Systematic Review of Impact Evaluations of Social Programs in Latin America and the Caribbean," IDB Publications 80443, Inter-American Development Bank.
- Kanbur, Ravi, 2009. "Poverty and Distribution: Twenty Years Ago and Now," Working Papers 48918, Cornell University, Department of Applied Economics and Management.
- Aber, Lawrence & Rawlings, Laura B., 2011. "North-South knowledgesharing on incentive-based conditional cash transfer programs," Social Protection Discussion Papers 59565, The World Bank.
- Rawlings, Laura B., 2004. "A new approach to social assistance : Latin America's experience with conditional cash transfer programs," Social Protection Discussion Papers 30165, The World Bank.
- Buys, Piet & Deichmann, Uwe & Wheeler, David, 2006. "Road network upgrading and overland trade expansion in Sub-Saharan Africa," Policy Research Working Paper Series 4097, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.