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Conditional cash transfers have been
a very successful anti-poverty program
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especially in Latin America.
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In Mexico, for instance, the government
started a program in 1997 called Progresa
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later relabeled Oportunidades
which quite simply means opportunities.
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The way it works is pretty simple.
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If the family sends a child to school,
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the family is paid some cash
if the child continues to go to school.
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If a family regularly sends a child
to healthcare clinics,
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the family is paid some cash
and possibly also some in-kind aid
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such as nutritional supplements.
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The exact sums will vary
with circumstances
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but imagine payments for child ranging
between say 5 to 20 dollars a month.
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If your household is otherwise earning
only, say, a few dollars a day,
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that's quite a considerable amount.
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In theoretical terms,
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you can think of these programs
as being quite special in two ways.
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First, they target aid at the level
of the individual household
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by using census data.
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And second, they are multisectoral,
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that is they address education,
health, and nutrition all at once.
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The government tries to find out exactly
who needs the aid and then to deliver it.
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This program is based on a lot of data
at the individual family level.
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So, we do have a good sense
of how well it's working
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and it seems it's working
quite well indeed.
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For instance, the program really has led
to improved school enrollment,
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especially for girls.
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At the same time, the program
has limited child labour.
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You might think it's a problem
that families earn less
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because the children are working less,
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but the transfers from the program
more than make up for that difference.
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One study found that 26% of
the cash transfer is invested
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by the families who receive it.
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After 18 months, due to those investments,
agricultural income went up by almost 10%.
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That means the families have permanently
higher standards of living
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due to these conditional cash transfers.
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Finally, the program has indeed
brought better health and nutrition
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for the recipient children.
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The program can be thought of
as a revolution in social policy.
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One aspect of the program
that's not always remarked upon
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is simply how scientific an approach
Mexico has taken to public policy
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not only implementing the program
but tracking the results
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and fine-tuning it and
improving it over time.
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Arguably, Mexico is, in this case,
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taking a more scientific approach
to public policy
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than is often done in,
say, the United States.
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The idea of conditional cash transfers
is one which is spreading
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around the world, especially
in Latin America
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including Chile, Colombia
and especially Brazil.
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Studies also indicate
it's done a good deal
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to lift people out of poverty in Brazil.
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This is a very well studied topic,
as I mentioned, with excellent data
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and it's possible to test
for various controls,
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say, by comparing families
who receive the cash transfers
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with families who do not.
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For further reading,
I would recommend that
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you google some of these terms.