CONDITIONAL CASH TRANSFERS (CCTs)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CONDITIONAL CASH TRANSFERS (CCTs) Margaret Grosh and Kathy Lindert, World Bank Social Safety Net Core Course April d

2 CLICKER QUESTION The country that I work on: Your answers: A. Already has a CCT Program in operation B. Is actively developing a CCT Program C. Is considering a CCT Program D. Has no program or no plans for a CCT Program E.. May or may not have a CCT program / I don t know 2

3 What are CCTs & how do they differ from UCTs? The Cash Part of CCTs (similar to UCTs) OUTLINE The Big C for Conditionalities The Evolution of UCTs & CCTs 3

4 WHAT ARE UNCONDITIONAL CASH TRANSFERS? Deliver Cash To Poor Families So simple, right? 4

5 WHAT ARE CONDITIONAL CASH TRANSFERS? Deliver Cash To Poor Families With conditions for actions by beneficiaries Still pretty simple, right? 5

6 DUAL OBJECTIVES OF CCTs Reduce poverty in short run, through provision of cash transfers Help the poor better their situation today Reduce poverty in long run, by linking transfers to incentives for investments in human capital or productivity Help reduce the inter-generational transmission of poverty 6

7 CLICKER QUESTION How many countries have CCTs? Your answers: A. Over 30 < 40 B. Over 40 < 60 C. Nearly 70 D

8 CLICKER QUESTION HOW MANY COUNTRIES HAVE CCTS? A. Over 30 < 40 B. Over 40 < 60 C. Nearly 70 D % 0% 0% 0% A. Over 30 < 40 B. Over 40 < 60 C. Nearly 70 D

9 CCTs HAVE SPREAD Sources: World Bank: Social Protection Teams from various regions + ASPIRE

10 CCTs HAVE SPREAD TO NEARLY 70 COUNTRIES AROUND THE WORLD 2014 If you count generously, eg heterogeneous programs Sources: World Bank: Social Protection Teams from various regions + ASPIRE 11

11 EXPANDING COVERAGE Brazil Bolsa Familia Example Pre- Reform Programs Bolsa Familia Program Bolsa Familia expanded from 3.6 million households in 2003 to 14.1 million by 2013 (approx 54 million people) Philippines Pantawid 4Ps CCT Pantawid program expanded From 6,000 to 4 million Households in 7 years (approx 16 million people) Starting from Scratch

12 The DESIGN & IMPLEMENT ATION OF CCTS Cash Transfer Part of CCTs 13

13 SETTING CASH TRANSFER BENEFITS SIMILAR TRADE-OFFS FOR CCTs & UCTs Size of Benefit Higher Coverage Size of Benefit Incentives To Work Complex Benefits Menus Simple Benefits 14

14 STRUCTURE OF BENEFITS VARIES A LOT Tanzania CCT Mexico Prospera Health Grants US$6 per CHIILD six times / year (Conditional, ages 0-5) US$12 per ELDERLY six times / year (Conditional, age 60+) Education Grants US$6 per child six times / year (Conditional, ages 7-15) Nutrition Education Grants & Health Grant US$10-66/child/month US$19/HH/month Grants increase in (Conditional) amounts by grades, Higher for +extras per children & elderly girls after 7 th grade (Conditional) Philippines Pantawid Health Grant US$11/HH/month (Conditional) Education Grants US$7 per child per month Up to three children (max) (Conditional) Savings Accounts for Youth US$287 per youth Upon graduation From High School (conditional) Elderly: US$22/month (plus other benefits) 16

15 STRUCTURE OF BENEFITS VARIES A LOT Brazil Bolsa Familia Example Extreme Poor Receive All types * * * * Variable Benefits for Teens US$16 each child years old Up to 2 variable benefits total (max) (conditional education) Variable Benefits US$13 each child < 15 years, or P/L mother Up to five variable benefits total (max) (conditional health & education) Moderate Poor Receive Only Variable Benefits * New top up benefit Up to US$29 to bring each HH up to extreme poverty Line (unconditional) Base Benefit (flat; for extreme poor) US$29 per household per month (unconditional) * = Added benefits in recent reforms 17

16 GENEROSIT Y OF TRANSFER VARIES BY COUNTRY & OVER TIME Benefits vary in their generosity Benefit values can erode over time (e.g., Philippines & Colombia) Unless their values are adjusted (e.g., Brazil & Mexico) LAC Philippines Pantawid CCT - Philippines 18 Sources: Mexico ENIGH; Ecuador ENEMDU; Brazil PNAD; Colombia GEIH; Philippines FIES/APIS (2013 not 2012)

17 VARIATION IN SIZE OF CCT PROGRAMS (COVERAGE & COSTS) Key averages for LAC: 0.4% of GDP and 21% of total population LAC 19

18 CCTs CAN BE WELL TARGETED Targeting Accuracy (Benefit Incidence) % of benefits to each quintile Note: Households are ranked into income quintiles on the basis of pre-transfer per capita income harmonized by CEDLAS Sources: LAC SP Household Survey Database, The World Bank (bottom graph 20

19 The DESIGN & IMPLEMENT ATION OF CCTS Conditionalities Part of CCTs ( the big C ) 21

20 CONDITIONALITIES DIFFERENTIATE BETWEEN CCTs & UCTs Deliver Cash Cash Transfer Part = Similar for UCTs & CCTs The Big C Conditionalities In CCTs With conditions for actions by beneficiaries To Poor Families 22

21 BUT CCTS ARE VERY DIVERSE (SOME EXAMPLES OF CONDITIONALITIES) Education (Enrollment, School attendance) Health Visits (prenatal, vaccines, child growth) Participate in Workshops Productive Activities, Labor (work) *Most LAC countries *Macedonia, Romania, Turkey *Cambodia, Philippines *Pakistan *Kenya, Tanzania, Ghana, Malawi, Congo, Togo, Senegal *Brazil, Chile, Colombia, Ecuador, Honduras, Jamaica, Mexico, Panama, Peru * Kazakhstan, Turkey * The Philippines *Tanzania, Congo, Togo, Senegal *Colombia, Mexico, Panama *The Philippines *Pakistan WeT CCT *Mali, Niger, Senegal, Burkina Faso *Brazil, Mexico, Ecuador *Kazakhstan *India, China *Cameroon, Liberia, Tanzania, Ethiopia *Many OECD countries (workfare) 23

22 SOME EXAMPLES OF CONDITIONALITIES MENUS Tanzania CCT Children ages 7-15 Enroll in school 80% attendance Mexico Prospera All Grantees Regular school attendance for all kids for 3 rd to 12 th grades Grantees 7 th -12 th grade Finish high school before 22 years old to receive savings account benefit (jovenes con Prospera) Children ages 0-5 Visit health clinics 6 times per year Elderly Visit health clinic once per year All members of HH Visits to health clinics All HH members > 15 Participate in health & nutrition workshops Elderly > 75 Visits to health clinics every six months (proof of life) Children ages 3-5 Enroll in daycare or preschool 85% attendance Children ages 6-14 Enroll school 85% attendance Family Attend family development Session at least once / month Children ages 6-15 Enroll in school 85% attendance Teens ages Enroll in school 75% attendance Philippines Pantawid CCT Children ages 0-5 Visit health clinics according to DOH protocol Children ages 6-14 De-worming pills at least twice a year at school Pregnant Women Pre-natal visits each trimester Delivery assisted by skilled health professional Brazil Bolsa Familia Children ages 0-7 Vaccines + medical care Pregnant/Lactating Women Nutritional monitoring, prenatal & post-natal checkups 24

23 ACCOMPANYING MEASURES IN CCTs ( Softer Conditionalities ) Participation in awareness seminars On nutrition, family practices, health, Sanitation; Nutrition packet Accompanying Measures Human capital Examples: Mali, Niger, Burkina Faso, Pakistan & The Philippines (Family Development Sessions). Participation in awareness seminars On productive practices, training sessions, or community works Accompanying Measures Productive Examples: Cameroun, Malawi 25

24 SPECTRUM OF SOFT & HARD CONDITIONALITIES Encouraged Participation In Awareness Workshops Conditionalities Announced but Not monitored Or Enforced Conditionalities Monitored but Enforcement only After repeated Non-Compliance Conditionalities Monitored & Penalties Enforced For Non-Compliance Soft Hard Examples: Mali, Niger, Burkina Faso Human Capital Conditions Announced Brazil Bolsa Familia, Ecuador Bono, Pakistan WeT Kenya OVC-CCT, Malawi M chinji Ghana LEAP Lesotho CGP Productive CCT Cameroon Moral Contract with 10 actions (training, community works, human capital, etc.) Mexico Panama El Salvador Jamaica Tanzania The Philippines 26

25 DIVERSITY IN ENFORCEMENT & CONSEQUENCES FOR NON-COMPLIANCE Lesotho CGP Beneficiaries Instructed to spend CCT on children But no Enforcement Evidence suggests it worked* Brazil Bolsa Familia 1* 2x 3x 4x Warning (& social worker follow-up) 30-day blockage with Benefit accumulation 60-day suspension with benefit accumulation 60-day suspension with NO benefit accumulation 1 Philippines Pantawid (monitored in two month increments) Temporary Suspension for that month 1 Mexico PROSPERA Temporary Suspension for that month 5x Termination of Benefits * Ben Davis (2014) * Instances of non-compliance >1* Termination of Benefits * Continued non-compliance 4-6* Termination of Benefits 4x continuous or 27 6x total

26 SO WHAT DOES THE BIG C IN CCT MEAN? Conditionalities can have different meanings in diverse contexts: C = Communications. Conditionalities are communicated but not enforced (e.g., spend CT on your kids or come participate in workshop ) C = Citizen Rights. Conditionalities should help the extreme poor take up their citizen rights for education & health. E.g., : First instance of non-compliance in Bolsa Familia = signal for intervention or more care C = Contract. Conditionalities serve as incentives for behavioral change. With the contract, benefits are suspended or terminated in case of non-compliance with conditionalities. 29

27 CLICKER QUESTION With CCTs, conditionalities should be: Your answers: A. Announced but not monitored or enforced B. Monitored but not enforced C. Monitored and enforced with penalties on benefits (e.g., suspension of benefits) 30

28 CLICKER QUESTION WITH CCTS, CONDITIONALITIES SHOULD BE: A. Announced but not monitored or enforced B. Monitored but not enforced C. Monitored and enforced with penalties on benefits (e.g., suspension of benefits) 11% 25% 64% A. Announced but not m... B. Monitored but not en... C. Monitored and enfor... 31

29 IMPLEMENTING CASH TRANSFERS: T WO KEY PILLARS (SIMILAR FOR UCTs & CCTs EXCEPT THE CONDITIONS PART) Communication, Messaging & Awareness Application Processes Eligibility Determination Managing information (social registries, beneficiary registries, conditionalities monitoring) Managing Payments Payments Methods & Frequency Audits, Oversight & Controls Verification of Conditionalities, Links to other Social Services Monitoring & Evaluation Greivances, Appeals 32

30 SO, IF CONDITIONALITIES ARE MONITORED & ENFORCED AS CONTRACTS HOW DOES THIS WORK IN PRACTICE? Operational Strategy Mexico Example: Co-responsibilities are specified in citizen engagement letter. Monthly registration of co-responsibilities and bimonthly certification. Only non-fulfillment of co-responsibilities is reported. Errors in certification process can be corrected. Cash transfers are estimated and disbursed only after certification process is concluded. Clear roles for actors involved: health, education, & staff of Prospera Program 33

31 MEXICO: CERTIFICATION OF CONDITIONALITIES - PAPER PROCESS Prospera State Offices State Health and Education Sectors Schools 1 Printing of Certification forms (400,000 forms) 2 3 & 115,000 Health units , Capture information from Certification forms Co-responsabilities certification (filling in forms)

32 MEXICO: CERTIFICATION OF CONDITIONALITIES ELECTRONIC PROCESS Beneficiaries Health and Education staff Electronic receipt Prospera State Offices Beneficiaries fulfill co-responsibility Responsible for certification in school or health center. Registers in CEDEC and sends information through internet. Internet Receives certification Generates official receipt Certification of Health Conditionalities: 80% paper, 20% electronic Certification of Education Conditionalities: 95% for grades 3-9; 100% for grades 10-12

33 DESIGN & IMPLEMENT ATION OF CCTS Do the Conditions Matter? 36

34 WHY ADD A CONSTRAINT TO POOR? Unconditional Cash Transfers (UCTs) Main argument for UCTs is that the key constraint for poor people is simply a lack of money The poor know what they need, and will spend or invest it to meet those needs Conditional Cash Transfers (CCTs) Technical answers: To of fset occasions where family decisionmaker doesn t have child s interest fully to heart; when families don t perceive the full long term returns to more education; when there are externalities to education or health Political answer: transfers more acceptable if seen as going beyond handouts and rewarding socially desirable behaviors. 37

35 POLITICAL APPEAL OF SHARED RESPONSIBILIT Y IN LAC LAC Philosophical appeal for social compact along the political spectrum but with nuanced interpretations Left: Social debt to the poor Structural impacts on poverty Conditionalities as basic rights CCTs viewed as less assistencialista by both sides Right: Not so expensive (cost/gdp) Not just a cash handout Conditionalities as contracts Broad political support for CCTs by parties along political spectrum in many countries in LAC & across changes in administration 38

36 CLICKER QUESTION In my country (home or for work): Your answers: A. Any kind of cash transfers for the poor is politically unacceptable B. Cash transfers would be politically acceptable, but it wouldn t be acceptable to put conditions on them C. CCTs would be more politically acceptable than UCTs D. I don t know about the political acceptability of UCTs or CCTs 41

37 CLICKER QUESTION IN MY COUNTRY (HOME OR FOR WORK): A. Any kind of cash transfers for the poor is politically unacceptable B. Cash transfers would be politically acceptable, but it wouldn t be acceptable to put conditions on them C. CCTs would be more politically acceptable than UCTs D. I don t know about the political acceptability of UCTs or CCTs 36% 36% 14% 14% A. Any kind of cash tran... B. Cash transfers would... C. CCTs would be more p... D. I don t know about t.. 42

38 Difference in enrollment with control group UCTs ALSO HAVE IMPACTS, BUT IMPACTS OF CCTs CAN BE HIGHER 14% 12% 10% 8% Malawi Impact on girls enrollment Impact of CCT And higher post-program impact 6% 4% 2% Impact of UCT 0% Term 1 Term 2 Term 3 Term 1 Term 2 Term 3 Post program Treatment with CCTs Treatment with UCTs

39 BAIRD, FERREIRA, OZLER AND WOOLCOCK S COCHRAINE REVIEW CATEGORIZATION 0. UCT programs unrelated to children or education such as Old Age Pension Programs (2) 1. UCT programs targeted at children with an aim of improving schooling outcomes such as Kenya s CT-OVC or South Africa s Child Support Grant (2) 2. UCTs that are conducted within a rubric of education such as Malawi s SIHR UCT arm or Burkina Faso s Nahouri Cash Transfers Pilot Project UCT arm (3) 3. Explicit conditions on paper and/or encouragement of children s schooling, but no monitoring or enforcement such as early Ecuador s BDH or Malawi s SCTS (8) 4 Explicit conditions, (imperfectly) monitored, with minimal enforcement such as Brazil s Bolsa Familia 5 Explicit conditions with monitoring and enforcement of enrollment condition such as Honduras PRAF -II or Cambodia s CESSP Scholarship Program (6) 6. Explicit conditions with m onitoring and enforcement of attendance condition such as Mexico s Opor tunidades 44

40 BAIRD, FERREIRA, OZLER AND WOOLCOCK S COCHRAINE RESULT Each unit increase in the intensity of the conditionality is associated with an increase of 7% in the odds of being enrolled in school: 45

41 BUT YOU STILL HAVE TO THINK ABOUT CONDITIONS Many outcomes, many groups, many values 46

42 Why the Hype? 47

43 PROVEN RESULTS OF CCTs: FOR A RELATIVELY LOW COST Proven impact on range of outcomes Poverty, consumption, use of services in education and health, some outcomes Total costs of CCTs: About 0.4% of GDP for larger programs CCTs often replace more expensive, badly targeted programs (fiscal consolidation) Countries spend far more on regressive programs: e.g., 4% of GDP on deficits in pension systems which largely benefit the rich Administrative costs: Around 6-12% for mature, large CCT programs Though Start-up costs can be higher: 48

44 BUT MANY UCTS CAN (NOW) MAKE SIMILAR CLAIMS LAC s programs were early movers on fronts other than conditions: EVALUATION REVOLUTION Step change in caliber of monitoring, accountability, documentation of processes, etc. Modernization of targeting Often catalyze the building of shared social registries So a lot of the early hype on CCTs was actually about modern Social Assistance 49

45 BUT OF COURSE EVEN FABULOUS SOCIAL ASSISTANCE DOESN T DO IT ALL Which leads us to the Supply Side Agenda And the Productive Inclusion Agenda 50

46 SUPPLY-SIDE DILEMMA FOR EDUCATION & HEALTH? What if the supply-side of social services is not available in some areas (e.g., education & health)? Some options: Build up the supply side (both quality and quantity) Limited the CCT to areas where the supply of services is available Soften the condition And of course QUALITY matters to outcomes 51

47 ENHANCE LINKAGES OF CCT TO SOCIAL & PRODUCTIVE SERVICES * Basics Set up basic systems for eligibility and payments * Consolidation Improve monitoring of conditions Grievance and redress Higher standards * Second generation CCTs *Update menu of conditionalities * Link beneficiaries to social & productive services (employment, training, credit) *Case management & tailored social contracts * Graduation agenda 52

48 THANK YOU!