Paradox or panacea? A critical assessment of the efficiency and equity of conditional cash transfer programmes in Latin America.

Conditional cash transfer (CCT) programmes, which make welfare transfers conditional on human capital investment, have grown to dominate the social protection sector in Latin America since their introduction in the late 1990s. Positive evaluation results prompted the replication of early CCT programmes globally. However, little is known about the merit of key design elements of existing CCT programmes, which may have a substantial impact on their performance. Moreover, the programmes' de facto design and implementation can be argued to be inconsistent with the theoretical rationale of making transfers conditional, ultimately casting doubt on whether CCT programmes live up to their status of development panacea. This project seeks to address this gap in literature by examining how certain design features affect the equity and efficiency of Latin American CCT programmes. The proposal distinguishes four research phases. First, a child-centred wellbeing indicator is developed, which may be used for targeting or evaluation purposes of CCT programmes. Second, alternative targeting methods are explored to comment on the appropriateness of existing programmes to target income-poor households. Third, the project analyses whether conditionality of transfers leads to a lower take-up among vulnerable households. Finally, the net distributional impact of CCT programmes is estimated, taking the fiscal implications of non-contributory welfare programmes into consideration.

Keywords:WELFARE ECONOMICS

Disciplines:Health, education and welfare economics, Economic development, Welfare economics