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The cost of conditional cash transfers

Author

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  • Natàlia Caldés

    (Agricultural and Applied Economics Department, ETSIA-Universidad Politécnica de Madrid, Spain)

  • John A. Maluccio

    (Food Consumption and Nutrition Division, International Food Policy Research Institute, Washington, DC, USA)

Abstract

A common criticism of antipoverty programmes is that a large proportion of their budgets never reaches the intended beneficiaries but is absorbed by administration costs. Yet, there is little empirical evidence on the costs, and even less on the cost structures, of such programmes. This paper outlines and implements a replicable methodology for a disaggregated cost analysis of a pilot conditional cash transfer programme in Nicaragua, examining the administration and private costs associated with a one-unit transfer to a beneficiary-referred to as the cost-transfer ratio. We find that for a meaningful assessment of cost efficiency, it is misleading to make calculations using only the typically available raw accounting data. Rather, one must delve into the details and specific activities of the programme. This is particularly important for pilot programmes, which typically have many upfront fixed costs associated with design and setting up operations. It is also important for conditional cash transfer programmes, which have additional costs associated with their specific design features and require changes in beneficiary behaviour that may engender substantial private costs. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Natàlia Caldés & John A. Maluccio, 2005. "The cost of conditional cash transfers," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(2), pages 151-168.
  • Handle: RePEc:wly:jintdv:v:17:y:2005:i:2:p:151-168
    DOI: 10.1002/jid.1142
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    References listed on IDEAS

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    1. David Coady & Margaret Grosh & John Hoddinott, 2004. "Targeting of Transfers in Developing Countries : Review of Lessons and Experience," World Bank Publications, The World Bank, number 14902, August.
    2. Newman, John & Rawlings, Laura & Gertler, Paul, 1994. "Using Randomized Control Designs in Evaluating Social Sector Programs in Developing Countries," World Bank Research Observer, World Bank Group, vol. 9(2), pages 181-201, July.
    3. Morley, Samuel & David Coady, 2003. "From Social Assistance to Social Development: Targeted Education Subsidies in Developing Countries," Peterson Institute Press: All Books, Peterson Institute for International Economics, number cgd376.
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    Cited by:

    1. José Cuesta, 2007. "On more ambitious conditional cash transfers, social protection and permanent reduction of poverty," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(7), pages 1016-1019.
    2. Caldes, Natalia & Coady, David & Maluccio, John A., 2006. "The cost of poverty alleviation transfer programs: A comparative analysis of three programs in Latin America," World Development, Elsevier, vol. 34(5), pages 818-837, May.
    3. Ferdinando Regalía & Leslie Castro, 2007. "Performance-based Incentives for Health: Demand- and Supply-Side Incentives in the Nicaraguan Red de Protección Social," Working Papers 119, Center for Global Development.
    4. Maluccio, John A. & Flores, Rafael, 2004. "Impact evaluation of a conditional cash transfer program," FCND discussion papers 184, International Food Policy Research Institute (IFPRI).
    5. Caldés, Natàlia & Coady, David P. & Maluccio, John A., 2004. "The cost of poverty alleviation transfer programs," FCND briefs 174, International Food Policy Research Institute (IFPRI).
    6. Ma. Cecilia L. Catubig & Renato A. Villano & Brian Dollery, 2016. "The administrative efficiency of conditional cash transfer programmes: evidence from the Pantawid Pamilyang Pilipino Program," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 23(1), pages 133-158, June.
    7. Maluccio, John A., 2005. "Coping with the “coffee crisis” in Central America: The Role of the Nicaraguan Red de Protección Social," FCND discussion papers 188, International Food Policy Research Institute (IFPRI).
    8. Brent Robert J., 2013. "A cost-benefit framework for evaluating conditional cash-transfer programs," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(2), pages 159-180, August.

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