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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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    1. Quisumbing, Agnes R. & Maluccio, John A., 2000. "Intrahousehold allocation and gender relations," FCND discussion papers 84, International Food Policy Research Institute (IFPRI).
    2. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", pages 112-134.
    3. Howard S. Bloom, 1984. "Estimating the Effect of Job-Training Programs, Using Longitudinal Data: Ashenfelter's Findings Reconsidered," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 544-556.
    4. Handa, Sudhanshu, 1996. "Expenditure behavior and children's welfare: An analysis of female headed households in Jamaica," Journal of Development Economics, Elsevier, vol. 50(1), pages 165-187, June.
    5. Wodon, Quentin, 2001. "Government Programs and Poverty," MPRA Paper 12308, University Library of Munich, Germany.
    6. Sadoulet, Elisabeth & Janvry, Alain de & Davis, Benjamin, 2001. "Cash Transfer Programs with Income Multipliers: PROCAMPO in Mexico," World Development, Elsevier, vol. 29(6), pages 1043-1056, June.
    7. Beard, Nick & Swinbank, Alan, 2001. "Decoupled payments to facilitate CAP reform," Food Policy, Elsevier, vol. 26(2), pages 121-145, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. World Bank, 2004. "Mexico : Public Expenditure Review, Volume 2. Main Report," World Bank Other Operational Studies 15660, The World Bank.
    2. 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) 2801, Inter-American Development Bank.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. Cesar Martinelli & Susan W. Parker, 2003. "Do School Subsidies Promote Human Capital Accumulation among the Poor?," Working Papers 0306, Centro de Investigacion Economica, ITAM.
    8. 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.
    9. 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.
    10. repec:eee:wdevel:v:99:y:2017:i:c:p:498-517 is not listed on IDEAS
    11. 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.

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