Conditional Cash Transfers in LAC

Latin American and Caribbean governments are adopting Conditional Cash Transfer programs(CCTs) as a new social protection tool for combating poverty and preventing its transmission between generations.   The programs provide cash to poor families on condition that they make verifiable investments in human capital, such as regular school attendance or use of basic preventative nutrition and health care.  By addressing demand-side barriers such as lack of information, these beneficiary-centered programs can improve the efficiency of basic services. 

 

The World Bank has supported CCTs since the late 1990s in Brazil, Colombia, the Dominican Republic, Ecuador, Jamaica, El Salvador, and Nicaragua (the latter a pilot).  In 2005, the Bank approved financing for an innovative Red Solidaria a la Familia (Family Solidarity Network) in El Salvador, which will benefit disadvantaged families living in the 100 poorest municipalities.   The Bank also supported expansion of Colombia's’s rural Familias en Acción (Families in Action) to urban poor and internally displaced populations.  

 

Impact evaluations confirm these programs’ success in reaching the poor and improving their consumption, education, and health, especially in middle and upper-middle income countries where high inequality dampens the poverty reduction impacts of economic growth.  In Colombia, for example, beneficiaries increased average consumption by 15 percentage points more than control households, and children under 2 years grew taller by up to 0.78 cm.  In Ecuador, between 2003 and 2005, secondary enrollment grew 10 percentage points and child labor fell 17 points among beneficiary families of the Bono de Desarrollo Humano CCT program.

 

CCTs have contributed to important advances in the design, administration, and governance of social policy.  These include novel approaches to targeting the poor, addressing gender issues, transferring funds, fostering social accountability, building error and fraud control systems, and strengthening governance.  Rigorous monitoring and evaluation systems allow programs to adjust operation for greater impact, effectiveness and accountability.

 

Learn more about our CCT projects and publications.

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