No 25: The hidden injuries of conditional cash transfer programs

Conditional Cash Transfer or CCT programmes can do more harm than good.
Sign for Prospera found outside a rural community in Mexico. (Gerardo Arriaga)

by Gerardo Arriaga

2018 marks the 21st anniversary of the first-of-its-kind Conditional Cash Transfer (CCT) program worldwide — a program that aims to alleviate poverty through human capital formation among people in extreme poverty. It is claimed to be so successful that over 52 countries around the globe have reproduced it. In light of people’s experiences of poverty in urban and rural areas, to what extent do those claims hold the scrutiny of reality?

How CCT began

When the first CCT program started, now called ‘Prospera’, the principles of focalisation, privatisation and decentralisation in Latin America were relatively new. The then-novel social policy paradigm in the region had shifted from paternalistic and universalistic to a cost-effective and poverty-oriented one. It was then when human capital formation and labour inclusion gained momentum in the region as poverty alleviation strategies.

A CCT pioneering program kicked off in Mexico in August 1997, covering only 300,000 households in rural areas of the country. Today, it supports over 6.7 million families in both urban and rural areas across the country. Prospera’s (‘thrive’, translated into English) stated goal is to promote human capital formation among beneficiary households by means of a bi-monthly stipend, subject to specific behaviours around education, health and nutrition. Ultimately, it was believed, once beneficiaries nourished such human capital, they would rise out of poverty.

Scope, conditionalities and self-reliance

Certainly, no other social program has been as effective in reaching people in poverty. However, because it aims at behavioural change through health clinic checks, workshops and school attendance, the program only operates in areas where the conditions of access and provision of health and education are sufficient. Thus, households from some of the most remote and deprived areas of the country are not included. Adela, from a rural area, who is divorced and a mother of three explained:

The spokeswoman was the one who told me that I had been unsubscribed . . .  that it was because I didn’t attend the health care visits and the workshops. I told her: ‘Well yeah, but let me tell you something, I didn’t attend because I was working’ . . . So she said: ‘That is the way the rules work’ . . . ‘You don’t understand the needs that one has,’ I told her; not because one is beneficiary that means we have to be just sitting there waiting for our benefits to arrive.

The recollections of Adela put forward the inadequacy of conditionalities since they require equal performance despite unequal context. Her words exemplify a common feeling among 40 interviewees in both urban and rural areas of Mexico who took part in an ongoing research project. Yet, the program insists in every monthly workshop that beneficiaries are the ones who remove themselves from the program. Celestina, who is 37 years old and from another rural area said, ‘Often there in the “talks” they tell us, “It is you who are going to remove yourselves from the program”‘. 

The cases of Adela and Celestina are telling examples of a change from welfare provision based on citizenship to one based on continuously proving yourself worthy of support. Furthermore, the co-responsibility of the programme Prospera supports the idea of beneficiaries being in charge of their own living conditions. However, the justification for such an idea rests on thin ground. When in poverty, hard work and sacrifice do not automatically amount to the satisfaction of needs. Reinforcing the idea of self-reliance through conditioning cash on certain behaviours might, in fact, negatively affect how people negotiate poverty.

Beneficiaries who comply with conditionalities feel worthy of the support they receive from the government. The opposite also applies: beneficiaries who can’t comply — for a variety of reasons not always under their control — are often perceived as lazy rent seekers or merely as thoughtless parents. This pattern bears similarities to the rhetoric that surrounds benefits claimants in the UK, as Ruth Patrick explains.

When asked about the reasons for beneficiaries not complying with conditionalities, a spokeswoman of the program answered, ‘There are many sneaky families who don’t need the program yet they are still receiving it’. Interestingly, those families are socialized as scroungers when, if anything, it is an issue of selection. Categories and stereotypes often exacerbate the shame and othering experienced in a life of poverty, as pinpointed by Ruth Lister.  

Shame is at the core of the experience of poverty, and it was indeed a common feeling among interviewees who also felt it when their benefits were cut or taken away, despite having done their best to comply. In the end, programmes that operate like this increase their powerlessness and negatively impact their ability to make ends meet.

What is next for CCT programs

Time and time again, research has highlighted the political use of the program Prospera, particularly during times of election and change of government. The program needs to be clearer in its scope and open in its accountability. A CCT program such as Prospera, with its one-size-fits-all approach, simply can’t alleviate poverty. At most, and if anything, it’s a program aimed to improve people’s health, nutrition and education attainment.

However, conditionalities, as they currently stand, promote shame and powerlessness among beneficiaries who are worse off, and little have they served to fight obesity and diabetes or to improve literacy. In light of the evidence generated over the past 21 years, it’s key to question the extent to which conditionalities still make any sense. A first step could be to fade away conditionalities in focalised areas (urban and rural) and measure the impact in the short and middle run — controlling for health, education and nutrition in both conditioned and un-conditioned transfers. Workshops and talks would continue to be available to households on an optional basis, while maintaining transfers, given their impact on beneficiaries’ income.

The current social safety net put in place in Mexico limits access to social rights among the working population, depending on how they partake in the labour market. This not only promotes informality and inequality, but it has a negative effect on people with lower incomes. A cash transfer to people at the lower end of the poverty spectrum — measured multidimensionally and not in terms of the minimum income threshold — could help alleviate some of their most pressing needs.

Gerardo Arriaga is a PhD student in Social Policy at the University of Birmingham and Research Assistant at the Centre for Research in Ethnic Minority EntrepreneurshipHe tweets @gerarriagag.

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