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The Impact of Conditional Cash Transfers on Consumption and Investment in Nicaragua

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  • John Maluccio

Abstract

This article examines the impact of a Nicaraguan conditional cash transfer programme on measures of expenditures and productive investment. Despite clear evidence from a randomised evaluation that the programme increased current expenditures, there is little evidence that it increased agricultural or non-agricultural investment. An estimated marginal propensity to consume out of the transfers of nearly one, combined with no effect of cumulative past transfers on current consumption, corroborate the direct evidence on investment. In contrast to gains made in human capital investment, the potential for long term increases in consumption as a result of other forms of increased investment may be limited.

Suggested Citation

  • John Maluccio, 2010. "The Impact of Conditional Cash Transfers on Consumption and Investment in Nicaragua," Journal of Development Studies, Taylor & Francis Journals, vol. 46(1), pages 14-38.
  • Handle: RePEc:taf:jdevst:v:46:y:2010:i:1:p:14-38
    DOI: 10.1080/00220380903197952
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    1. Bazzi, Samuel & Sumarto, Sudarno & Suryahadi, Asep, 2015. "It's all in the timing: Cash transfers and consumption smoothing in a developing country," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 267-288.
    2. Cecchini, Simone & Madariaga, Aldo, 2011. "Conditional cash transfer programmes: the recent experience in Latin America and the Caribbean," Cuadernos de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 95 edited by Eclac, OCTOBER.
    3. Kishore, Avinash & Joshi, Pramod K. & Pandey, Divya, 2015. "Droughts, Distress and a Conditional Cash Transfer Program to Mitigate the Impact of Droughtin Bihar, India," 2015 Conference, August 9-14, 2015, Milan, Italy 212009, International Association of Agricultural Economists.
    4. M. Caridad Araujo & Mariano Bosch & Norbert Schady, 2017. "Can Cash Transfers Help Households Escape an Inter-Generational Poverty Trap?," NBER Chapters,in: The Economics of Asset Accumulation and Poverty Traps National Bureau of Economic Research, Inc.
    5. Das, Ashis Kumar & Friedman, Jed & Kandpal, Eeshani, 2013. "Utilizing Local Capacity to Supplement Government Health Programs: Cautionary Evidence from a Malaria Prevention RCT in India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150343, Agricultural and Applied Economics Association.
    6. Craig Johnson & Hari Bansha Dulal & Martin Prowse & Krishna Krishnamurthy & Tom Mitchell, 2013. "Social Protection and Climate Change: Emerging Issues for Research, Policy and Practice," Development Policy Review, Overseas Development Institute, vol. 31, pages 2-18, November.
    7. Lara Cockx & Nathalie Francken, 2016. "Evolution and Impact of EU Aid for Food and Nutrition Security: A Review," FOODSECURE Working papers 47, LEI Wageningen UR.
    8. Jesse Cunha, 2010. "Testing Paternalism: Cash vs. In-kind Transfer in Rural Mexico," Discussion Papers 09-021, Stanford Institute for Economic Policy Research.
    9. Yi, Fujin & Sun, Dingqiang & Zhou, Yingheng, 2015. "Grain subsidy, liquidity constraints and food security—Impact of the grain subsidy program on the grain-sown areas in China," Food Policy, Elsevier, vol. 50(C), pages 114-124.
    10. Cristina Cirillo & Giorgia Giovannetti, 2018. "Do Cash Transfers Trigger Investment? Evidence for Peru," Development Working Papers 433, Centro Studi Luca d'Agliano, University of Milano, revised 29 Jan 2018.
    11. Fitz, Dylan, 2013. "Development Chutes and Ladders: A Joint Impact Evaluation of Asset and Cash Transfers in Brazil," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150254, Agricultural and Applied Economics Association.
    12. Mariano Bosch & Marco Manacorda, 2012. "Social Policies and Labor Market Outcomes in Latin America and the Caribbean: A Review of the Existing Evidence," CEP Occasional Papers 32, Centre for Economic Performance, LSE.
    13. Naila Kabeer & Hugh Waddington, 2015. "Economic impacts of conditional cash transfer programmes: a systematic review and meta-analysis," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 7(3), pages 290-303, September.
    14. Chatura Sewwandi Wijetunga & Katsuhiro Saito, 2017. "Evaluating the Fertilizer Subsidy Reforms in the Rice Production Sector in Sri Lanka: A Simulation Analysis," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 7(1), pages 1-3.
    15. Verónica Amarante & Martí­n Brun, 2016. "Cash transfers in Latin America: Effects on poverty and redistribution," WIDER Working Paper Series 136, World Institute for Development Economic Research (UNU-WIDER).
    16. Yi, Fujin & Sun, Dingqiang, 2014. "Grain Subsidy, Liquidity Constraints and Food security—Impact of the Grain Subsidy Program on the Grain-Sown Areas in China," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169779, Agricultural and Applied Economics Association.
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    19. M. Caridad Araujo & Mariano Bosch & Norbert Schady, 2017. "Can Cash Transfers Help Households Escape an Inter-Generational Poverty Trap?," NBER Chapters,in: The Economics of Poverty Traps National Bureau of Economic Research, Inc.
    20. Karamba, Wendy R. & Quiñones, Esteban J. & Winters, Paul, 2011. "Migration and food consumption patterns in Ghana," Food Policy, Elsevier, vol. 36(1), pages 41-53, February.

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