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Conditionality and the Impact of Programme Design on Household welfare: Comparing two diverse cash transfer programmes in rural Mexico

Author

Listed:
  • Benjamin Davis

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Sudhanshu Handa
  • Marta Ruiz-Arranz
  • Marco Stampini
  • Paul Winters

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

  • Benjamin Davis & Sudhanshu Handa & Marta Ruiz-Arranz & Marco Stampini & Paul Winters, 2002. "Conditionality and the Impact of Programme Design on Household welfare: Comparing two diverse cash transfer programmes in rural Mexico," Working Papers 02-10, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  • Handle: RePEc:fao:wpaper:0210
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    References listed on IDEAS

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    7. 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).
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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. Ruiz -Arranz, Marta & Davis, Benjamin & Stampini, Marco & Winters, Paul & Handa, Sudhanshu, 2002. "More calories or more diversity? An econometric evaluation of the impact of the PROGRESA and PROCAMPO transfer programs on food security in rural Mexico," ESA Working Papers 289105, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    3. World Bank, . "Mexico : Public Expenditure Review, Volume 2. Main Report," World Bank Other Operational Studies, The World Bank, number 15660, March.
    4. Bouillon, César P. & Tejerina, Luis, 2011. "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.
    5. 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.
    6. 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.
    7. 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.
    8. Carlos Felipe Jaramillo & Daniel Lederman & Maurizio Bussolo & David Gould & Andrew Mason, 2006. "Challenges of CAFTA : Maximizing the Benefits for Central America," World Bank Publications, The World Bank, number 7127, July.
    9. Sudhanshu Handa & Benjamin Davis, 2006. "The Experience of Conditional Cash Transfers in Latin America and the Caribbean," Working Papers 06-07, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    10. Juan Esteban Saavedra & Sandra Garcia, 2012. "Impacts of Conditional Cash Transfer Programs on Educational Outcomes in Developing Countries A Meta-analysis," Working Papers WR-921-1, RAND Corporation.
    11. 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.
    12. 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.
    13. 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.
    14. 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.
    15. Saavedra, Juan Esteban & Garcia, Sandra, 2012. "Impacts of Conditional Cash Transfer Programs on Educational Outcomes in Developing Countries: A Meta-analysis," Working Papers 921-1, RAND Corporation.
    16. Cesar Martinelli & Susan W. Parker, 2003. "Do School Subsidies Promote Human Capital Accumulation among the Poor?," Working Papers 0306, Centro de Investigacion Economica, ITAM.
    17. 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.
    18. 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.

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