Wednesday, January 5, 2011

Will Mexican and Brazilian Welfare Programs Work Elsewhere?

The NY Times Fixes recent column by Tina Rosenberg (link) was about conditional cash transfers (CCTs), programs that pay cash to mothers in poor families who send their children to school and go in for health check ups. CCTs have been very successful in Brazil and Mexico at increasing school enrollment and had mild positive impacts on children health.

A couple questions in my mind remain. In the long term does sending more children to high school in Brazil and Mexico actually lead to lower poverty? It will be hard to test this since in both countries basically everyone who is poor is now receiving payments from the government (including 90% of the coffee growers in yesterdays post). What happens when there is a large increase in schooling for a generation?
Do they get jobs that use that education?

I also think that health benefits in the article are a little over stated. One of the best measures of children's health is their height and both programs seem to have little to no improvement in children's height, and one study even found Brazil's CCT decreased children's height (see previous post)

Now turning away from Brazil and Mexico, which are borderline developed/developing country. I think the big question is what influence can CCTs have in poorer countries. The Times article makes a good point.

If conditional cash transfer programs are to work properly, many more schools and health clinics are needed. But governments can’t always keep up with the demand — and sometimes they can only keep up by drastically reducing quality. If this is a problem for medium-income countries like Brazil and Mexico, imagine the challenge in Honduras or Tanzania.

In my experience with a Honduran CCT, which showed no impact on schooling or children's health. The program also failed to deliver on promised school and hospital construction. Additionally even the Nicaraguan CCT that is often held up as example of a successes story increasing school enrollment more than 20%, was terminated due to lack of funding.

Although, I don't have evidence of it, since there haven't been enough studies (for example in terms of height the influence of only 8 or 10 CCTs has been tested), I'm guessing that part of the success of Brazil and Mexico is the government capacity they have.

Like microcredit, I've come to the belief that CCTs are generally good when well run (a big if), but I don't think they are a magic bullet.

See my previous posts on conditional cash transfers here.

h/t to Dan for the article

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