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Conditional Cash Transfers and Payments for Environmental Services—A Conceptual Framework for Explaining and Judging Differences in Outcomes

  • Martin Persson, U.
  • Alpízar, Francisco

We develop a conceptual framework elucidating the main determinants of the impact of Conditional Cash Transfer (CCT) and Payments for Environmental Services (PES) programs. Using a simple multi-agent model and evaluations of existing programs, we show that (1) the share of the population who would meet the program’s conditions in the absence of payments is a powerful predictor of program efficiency, and that (2) program efficiency is eroded by selection bias (people who already meet conditions self-select into the programs at higher rates than others). We then discuss possibilities for increasing efficiency and criteria for evaluating and choosing between CCTs/PES or other policy instruments.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 43 (2013)
Issue (Month): C ()
Pages: 124-137

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Handle: RePEc:eee:wdevel:v:43:y:2013:i:c:p:124-137
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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