Conditional cash transfer (CCT) programs provide cash to poor households in exchange for the recipients' commitment to take actions such as enrolling their children in school or taking them regularly to health clinics. These programs focus on reducing poverty and building human capital through partnerships between governments and poor households.
A global wave of CCT programs
After early successes in South Asia and Latin America, CCT programs are now found on every continent. They now operate in more than two dozen developing countries, as well as in several developed countries, including the United States.
In countries such as Mexico and Brazil, CCT programs were introduced as part of larger efforts to make safety nets more effective, replace badly targeted subsidies, or integrate smaller programs. Colombia's nationwide Familias program has generated important and positive evaluation results and has received sustained support from the World Bank.
The map on your right shows how CCTs have spread across the world between 1997 and 2008.
CCT programs reach more people within countries
Besides being implemented in more countries across the world, CCTs have also grown phenomenally within countries. In Mexico, for instance, Progresa began in 1997 with 300,000 households; its successor Oportunidades [link to WB program page] now reaches 5 million households. Positive evaluations by researchers encouraged this scaling up in Mexico.
In Brazil, the Bolsa Familia [link to WB program page] program began in the mid-1990s as an experiment in two municipalities. Today, this program covers 11 million families.
The expansion of such programs in other countries has been less dramatic but still notable. In Colombia, for instance, the program's initial goal was 400,000 families, but had expanded to cover 1.5 million households by 2007.
CCT programs vary in size and scope
CCT programs are tailored to suit different needs in different countries.
Some programs are nationwide, others are niche programs that serve a regional or narrow target population, and yet others are small-scale pilot projects. Some insist only on schooling conditions; others require both schooling and health commitments.
In terms of absolute coverage, the size of a CCT program range from 11 million families in Brazil to 215,000 households in Chile to pilot programs with a few thousand families in Kenya and Nicaragua. Budgets range from about 0.50 percent of GDP in countries such as Brazil, Mexico, and Ecuador to 0.08 percent of GDP in Chile.
The actual benefits extended range from 20 percent of mean household consumption in Mexico to 4 percent in Honduras, and to even less for programs in Bangladesh, Cambodia and Pakistan.
Approaches in middle-income countries
Many CCT programs in middle-income countries have used an integrated approach to poverty reduction, balancing goals of social assistance with human capital formation. Examples include Brazil, Colombia, El Salvador, Jamaica, Mexico, Panama, and Turkey.
What makes Mexico's program iconic are the successive waves of data collected to evaluate its impact, the public availability of this data, and the resulting research and analysis generated by the publication of such information.
Brazil's use of CCTs is also exemplary; the program is similar to Mexico's in coverage and importance but differs in its slightly greater emphasis on redistribution than on human capital formation.
Chile Solidario works very differently to fill another niche – it is targeted solely at extremely poor people, who make up just 5 percent of the population and provides a more tailored support to beneficiaries through social workers.
Approaches in low-income countries
Another branch of the CCT program family focuses on education in low-income countries. Some cover only secondary education (such as Bangladesh's Female Secondary School Assistance Program or FSSAP); some only primary (such as programs in Bolivia and Kenya); and some both (Indonesia's Jaring Pengamanan Sosial or JPS).
In Bangladesh, the FSSAP was part of a strategy to close a then-significant gender gap in education. In Indonesia, the JPS was instituted following the East Asian financial crisis to prevent students from dropping out. In Kenya and Tanzania, the programs are geared to cope with the crisis of orphans and vulnerable children in the wake of HIV/AIDS.
Wide use of monitoring and evaluation in CCT programs
A number of CCT programs have had unusually proactive management based on cutting-edge technical systems, especially with respect to monitoring and evaluation.
Most such programs are characterized by excellent systems and a high degree of transparency in documentation and information.
The evaluation culture around CCT programs is quite strong, well beyond the traditional practice in social policy. This culture is now spreading not just from one CCT to the next, but also from CCT programs to other programs within the same country.