Conditional Cash Transfers: Reducing Present and Future Poverty (Policy Research Reports)

CASH TRANSFERS. A World Bank Policy Research Report Fiszbein, Ariel, –. Conditional cash transfers: reducing present and future poverty /.
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Reducing Present and Future Poverty.

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The report shows that there is good evidence that conditional cash transfers CCTs have improved the lives of poor people. Transfers generally have been well targeted to poor households, have raised consumption levels, and have reduced poverty, by a substantial amount in some countries.

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Offsetting adjustments that could have blunted the impact of transfers, such as reductions in the labor market participation of beneficiaries, have been relatively modest. Moreover, CCT programs often have provided an entry point to reforming badly targeted subsidies and upgrading the quality of safety nets.

The report thus argues that CCTs have been an effective way to redistribute income to the poor, while recognizing that even the best-designed and best-managed program cannot fulfill all of the needs of a comprehensive social protection system.

CCTs therefore need to be complemented with other interventions, such as workfare or employment programs and social pensions. The report also considers the rationale for conditioning the transfers on the use of specific health and education services by program beneficiaries. The impact of CCT programs on service use cannot be explained by the cash component of the program alone, the conditions and the size of the transfer are important.

The conditions must provide the appropriate incentives to improve nutrition and health, while the size of transfer should be calculated to provide maximum benefit without triggering negative trade-offs or waste. Entry and exit rules: These are necessary to avoid confusion among prospective beneficiaries and to minimise the potential for manipulation, abuse, and unintended incentive effects Complementary interventions: CCT and other cash transfer programs should be seen as complements, rather than substitutes, addressing different household characteristics.

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