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Conditionality and the impact of program design on household welfare: comparing two diverse cash transfer programs in rural Mexico

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  • Davis, Benjamin
  • Handa, Sudhanshu
  • Ruiz -Arranz, Marta
  • Stampini, Marco
  • Winters, Paul

Abstract

In this paper, we examine how the design of cash transfer schemes influences household welfare outcomes with particular reference to the influence of transfers on conditioned outcomes, such as schooling, health and investment. We do this by examining two innovative cash transfer schemes initiated by the Mexican government in the last decade: PROGRESA, which is a national antipoverty scheme directed at chronic rural poverty, and PROCAMPO, which is a scheme designed to compensate farmers for the negative price effects of NAFTA. The schemes differ in that PROGRESA is targeted at women and conditioned on schooling and health outcomes and PROCAMPO is generally targeted at men and conditioned on land use. The analysis of data collected for an evaluation of PROGRESA suggest that the overall effects of the programs, as measured by total and food consumption expenditure, are not different. However, PROGRESA leads to greater schooling expenditure and school attendance as well as increased health outcomes. On the other hand, PROCAMPO is found to lead to increased investment in agriculture. The results suggest that conditionality may have little effect in terms of short-term welfare outcomes, but do influence both longer-term (human capital) and medium term (productive) investment. Policy makers must consider both whether or not conditions should be placed on a program, and the type of condition, depending on what they perceive to be the desirables outcomes of the transfer scheme.

Suggested Citation

  • Davis, Benjamin & Handa, Sudhanshu & Ruiz -Arranz, Marta & Stampini, Marco & Winters, Paul, 2002. "Conditionality and the impact of program design on household welfare: comparing two diverse cash transfer programs in rural Mexico," ESA Working Papers 289104, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    • Handle: RePEc:ags:faoaes:289104
    DOI: 10.22004/ag.econ.289104
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    Cited by:

    1. Kostas Stamoulis & Alberto Zezza, 2003. "A Conceptual Framework for National Agricultural, Rural Development, and Food Security Strategies and Policies," Working Papers 03-17, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    2. Sarah Baird & Francisco H. G. Ferreira & Berk Özler & Michael Woolcock, 2013. "Relative Effectiveness of Conditional and Unconditional Cash Transfers for Schooling Outcomes in Developing Countries: A Systematic Review," Campbell Systematic Reviews, John Wiley & Sons, vol. 9(1), pages 1-124.
    3. Carlos Felipe Jaramillo & Daniel Lederman & Maurizio Bussolo & David Gould & Andrew Mason, 2006. "Challenges of CAFTA : Maximizing the Benefits for Central America," World Bank Publications - Books, The World Bank Group, number 7127, December.
    4. Debosree Banerjee & Stephan Klasen, 2022. "Conditional cash transfers to mothers, intrahousehold allocations: the role of unobservability," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 275-296, February.
    5. Cecilia Rossel & Denise Courtoisie & Magdalena Marsiglia, 2019. "How could conditional cash transfer programme conditionalities reinforce vulnerability? Non‐compliers and policy implementation gaps in Uruguay's Family Allowances," Development Policy Review, Overseas Development Institute, vol. 37(1), pages 3-18, January.
    6. 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.
    7. Benjamin Davis & Gero Carletto & Paul Winters, 2010. "Migration, Transfers and Economic Decision Making among Agricultural Households: an Introduction," Journal of Development Studies, Taylor & Francis Journals, vol. 46(1), pages 1-13.
    8. Lilik Sugiharti, 2017. "Education Performance and the Determinants of Secondary School Enrolment in Indonesia," GATR Journals gjbssr477, Global Academy of Training and Research (GATR) Enterprise.
    9. Marie Gaarder & Amanda Glassman & Jessica Todd, 2010. "Conditional cash transfers and health: unpacking the causal chain," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 2(1), pages 6-50.
    10. Marta Ruiz-Arranz & Benjamin Davis & Marco Stampini & Paul Winters & Sudhanshu Handa, 2002. "More Calories or More Diversity? An econometric evaluation of the impact of the PROGRESA and PROCAMPO transfer programmes on food security in rural Mexico," Working Papers 02-09, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    11. Cesar Martinelli & Susan W. Parker, 2003. "Do School Subsidies Promote Human Capital Accumulation among the Poor?," Working Papers 0306, Centro de Investigacion Economica, ITAM.
    12. 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 (Working Papers) 80443, Inter-American Development Bank.
    13. World Bank, 2004. "Mexico : Public Expenditure Review, Volume 2. Main Report," World Bank Publications - Reports 15660, The World Bank Group.
    14. Salti, Nisreen & Chaaban, Jad & Moussa, Wael & Irani, Alexandra & Al Mokdad, Rima & Jamaluddine, Zeina & Ghattas, Hala, 2022. "The impact of cash transfers on Syrian refugees in Lebanon: Evidence from a multidimensional regression discontinuity design," Journal of Development Economics, Elsevier, vol. 155(C).
    15. 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.
    16. Bouillon, César P. & Tejerina, Luis, 2006. "Do We Know What Works?: A Systematic Review of Impact Evaluations of Social Programs in Latin America and the Caribbean," IDB Publications (Working Papers) 2801, Inter-American Development Bank.
    17. Antonio Yunez-Naude & Fernando Barceinas Paredes, 2004. "The Agriculture of Mexico After Ten Years of Nafta Implementation," Working Papers Central Bank of Chile 277, Central Bank of Chile.
    18. Armando Barrientos & Jocelyn DeJong, 2006. "Reducing Child Poverty with Cash Transfers: A Sure Thing?," Development Policy Review, Overseas Development Institute, vol. 24(5), pages 537-552, September.
    19. Ma, Zhao & Bauchet, Jonathan & Steele, Diana & Godoy, Ricardo & Radel, Claudia & Zanotti, Laura, 2017. "Comparison of Direct Transfers for Human Capital Development and Environmental Conservation," World Development, Elsevier, vol. 99(C), pages 498-517.
    20. Denni Tommasi & Alexander Wolf, 2016. "Overcoming Weak Identification in the Estimation of Household Resource Shares," Working Papers ECARES ECARES 2016-12, ULB -- Universite Libre de Bruxelles.
    21. Anne Esser & Charlotte Bilo & Raquel Tebaldi, 2019. "How can cash transfer programmes work for women and children? A review of gender- and child-sensitive design features," Working Papers 178, International Policy Centre for Inclusive Growth.
    22. Ryan Nehring & Ana Carla Miranda & Andrew Howe, 2017. "A case for institutional demand as effective social protection: supporting smallholders through procurement and food assistance programmes," Working Papers 157, International Policy Centre for Inclusive Growth.
    23. Amanda Glassman & Jessica Todd, 2007. "Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean," Working Papers 120, Center for Global Development.

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    Keywords

    Consumer/Household Economics;

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