Poverty-fighting tool: conditional cash transfers

The New York Times recently published an in-depth article about a poverty-fighting program called Oportunidades in Mexico.  Instead of traditional government welfare programs that offer subsidized food or healthcare, the program gives the poor cash on the condition that the money is spent on “activities designed to break the culture of poverty and keep the poor from transmitting that culture to their children.”   Some examples of these conditional cash transfer activities include:

  • Money for school fees, contingent on the child’s attendance record
  • Money for food, subject to preventative health checkups
  • Money, on conditions of attendance at monthly educational workshops on health topics (like purifying drinking water)

Initial objections about Oportunidades stemmed from the program’s potential to increase domestic violence, given the machismo culture of poor, rural Mexico. The program is targeted towards women who are the primary spenders in the family.Women must leave the house to receive payments, attend workshops, and visit the clinic.  Workshops are about women’s rights and self-esteem.  Women also get their own money and control how it is spent.  Indeed, the stories reflect the shifting balance of power between the husband and wife; transitions that are fraught with tension and anger in the beginning, but fade over time when the program’s benefits are realized.

Overall results have been impressive thus far.  In Mexico, rates of malnutrition, anemia, and childhood and adult illnesses have dropped.  Children enrolled in the program drop out less frequently, repeat fewer grades, and stay in school longer. In some rural areas, the percentage of children entering middle school is up by 42% and 85% for high school.

Similar programs are being rolled out in 30 other countires (mainly in Latin America) including Turkey, Cambodia, and Bangladesh.  New York City is also starting a pilot program under Mayor Michael Bloomberg called Opportunity NYC.

To learn more, read the New York Times article and the World Bank case study on Oportunidades.

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