Conditional Cash Transfer (CCT) programs, which are mainly intended to support poor households with children, are only one option among a range of social protection programs that can be used to redistribute income to poor households.
CCTs cannot be the right instrument for all poor households, especially those with elderly people, without children, or with children who fall outside the CCT age range. Redistribution to these groups is better handled through other means. For example, the elderly poor are better served through social (non-contributive) pensions.
While CCTs can help cushion the impacts of various types of crises on the poor, they are not the best instruments for social risk management or for tackling transient poverty. Better suited to these purposes are transfer programs that (i) don’t involve long-term commitments, and (ii) involve beneficiaries in activities (such as those that are job-related) to help address the source of the shock.
In most countries, CCTs and other cash transfer programs are likely to coexist and should be seen as complements. In Latin America, where CCT programs are long established, policymakers are casting CCTs as part of a broader system of social protection.
The basic design features of various programs then need to be compatible. For example, the CCT transfer size must be set in relation to that of other cash transfers in order to limit distortions and make programs politically acceptable.
There are potentially large administrative synergies across cash transfer programs. The most obvious examples are common systems for administrative targeting and common payment systems (such as electronic cards).
Many countries are also considering a common outreach and service platform—a one-stop-shop for the beneficiaries of all social protection programs.