Conditional cash transfer (CCT) program aim to reduce by making welfare programs conditional upon the receiver’s actions. The government only transfers the money to persons who meet certain criteria. These criteria may include enrolling children into public schools, getting regular check-ups at the doctor’s office, receiving vaccinations, or the like. ACCTs are unique in seeking to help the current generation in poverty, as well as breaking the cycle of poverty for the next through the development of human capital.
Conditional cash transfers exist in the following countries, among many others like Brazil, Chile, Columbia, Honduras, Jamaica, Indonesia, Mexico, Guatemala, Nicaragua, Panama, Philippines, Peru, Turkey, Egypt, United States of America, Bangladesh and Cambodia. Many countries in Latin America are now using CCT programs as a major tool of their social policy since they have been proven to be very effective in helping poor families.
Although the conditions and amounts of money may vary from country to country, ranging from $5 to $33 per child, in general these programs provide money to poor families under the condition that those transfers are used as an investment on their children’s human capital, such as regular school attendance and basic preventive health care. The purpose of these programs is to address the inter-generational transmission of poverty and to foster social inclusion by targeting the poor, focusing on children, delivering transfers to women, and changing social changing relationships between beneficiaries, service providers and governments.
Most of these transfer schemes are now benefiting around 110 million people in the region, and are considered relatively cheap, costing around 0. 5% of their GDP. Conditional cash transfer programs can be very effective in reducing poverty in the short term since they have helped to increase household income and consumption in poor families they have also worked effectively in increasing school enrollment and attendance, especially in middle school. A substantial improvement in health and nutrition of the children that benefit from these programs has been acknowledged.
However, studies by the UNDP have shown that conditional cash transfers neither represented a significant increase in the quality of education and in learning nor significant increased salaries, once the recipients entered the labor force. While most conditional cash transfer programs are in Latin America, a significant amount of research has been conducted regarding the implementation of these programs in Africa. In addition, programs are looking to the Latin America for examples on how to implement these programs.
While there are a few unconditional programs of cash transfers in Africa being tested, two conditional cash transfer programs in Africa are currently being implemented. For CCTs to be successful, they require sufficient infrastructure. Poor education and health systems limit the benefits of CCT programs. Impacts should be seen in regard to the effectiveness of health and education institutions of the country. Since 2007 a pilot conditional cash transfer program has been researching its effectiveness in Morocco, organized by the World Bank.
The program targets poor regions of Morocco with high dropout rates and should cover 160,000 households by 2010. The pilot program is a comparative test that has four treatment groups. One group is receiving unconditional cash transfers, regardless of child school attendance. The next three are given conditional cash transfers to families of children grades 3-6 based on the child’s attendance at school. The three treatment groups vary in how attendance is monitored, ranging from monitoring attendance based on teacher’s report, all the way to a sophisticated system involving monitoring through biometric fingerprint machines.
In addition, within each classroom, which parent (the mother or father) is randomized to see if the family benefits more from having the money targeted to one or the other. This study will bring research that assesses the importance of conditionality, monitoring, and targeting within a conditional cash transfer program. Conditional cash transfer programs are not used widely in Europe. In the UK, in 2011 Centre Forum proposed an additional child benefit dependent on parenting activities.
Pantawid Pamilyang Pilipino Program or 4Ps (formerly Ahon Pamilyang Pilipino) is a conditional cash transfer program of the Philippine government under the Department of Social Welfare and Development. It aims to eradicate extreme poverty in the Philippines by investing in health and education particularly in ages 0–14. It is patterned on programs in other developing countries like Brazil (Oportunidades) and Mexico (Bolsa Familia) The 4Ps program now operates in 17 region, 79 provinces and 1,261 municipalities and 138 key cities covering 3,014,586 household beneficiaries.
Patawid Pamilya Program has dual objectives which are the Social Assistance that provides cash assistance to the poor alleviate their immediate needs or the short-term poverty alleviation, and Social Development which break the intergenerational poverty cycle through investments in human capital. The Caloocan City is screening indigent families who will be given assistance through the government’s Pantawid Para sa Pamilyang Pilipino (4Ps) program to alleviate poverty. The City Social Welfare and Development (CSWD) said the screening continues to determine those most qualified to receive assistance from the local government.
Those considered poor or indigent families who wants to avail of the program are urged to visit their respective barangays or CSWD office and submit the following requirements: Marriage certificate and birth certificate of three children not more than 14 years old. Families chosen to benefit from this program will be entitled to receive cash assistance, which can be used in their day-to-day expenditures like buying food and other basics needs. Former Mayor Enrico Echiverri said he hopes that the program will help in alleviating poverty.
Echiverri warned unscrupulous individuals that they will not succeed in tricking their way into the government’s program, nothing that the 4Ps will employ strict background investigation based on documents submitted to the CSWD. The former mayor appealed to potential beneficiaries to use the money for worthy purposes. Echiverri vowed that this administration would continue to attract more businessmen and traders to invest in the city even as he vowed continuing assistance and service to his constituents.