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The cost of conditional cash transfers

Listed author(s):
  • 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)

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.

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File URL: http://hdl.handle.net/10.1002/jid.1142
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 17 (2005)
Issue (Month): 2 ()
Pages: 151-168

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Handle: RePEc:wly:jintdv:v:17:y:2005:i:2:p:151-168
DOI: 10.1002/jid.1142
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/5102/home

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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, December.
  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, November.
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