IPC – One Pager: July 2009 - Do Conditional cash transfer (CCT) Programmes Work in Low-Income Countries?
24 Jul 2009
Conditional cash transfer (CCT) programmes have worked fairly well in large upper middle-income countries such as Brazil and Mexico.
But this does not mean that the CCT model can be exported to all countries, especially the poorest. As the table shows, programmes in low-income countries are reaching a much smaller share of their population and of the extremely poor. The number of beneficiaries of CCT programmes in Brazil and Mexico is larger than the number of the extremely poor, whereas in Nicaragua the beneficiaries are equivalent to 7.8 per cent of the extremely poor population. Low-income countries also have a much more limited capacity to spend on these programmes. For instance, Mexico invests 0.44 per cent of its GDP and 4.3 per cent of total social spending in CCTs, while Honduras invests 0.02 per cent of GDP
and 0.2 per cent of social spending
. A recent paper on Guatemala, Honduras and Nicaragua reveals the challenges that CCT programmes face in small, low-income countries with weak institutional settings (Cecchini et al., 2009). First, because of their multidimensional approach to poverty reduction, CCT programmes require coordination among the different sectors and territorial units of the state. In the Central American countries cited above, however, state institutions are quite fragile and coordination is far from effective.
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Source:UNDP
