Reassessing Conditional Cash Transfer Programs

During the past decade, the use of
conditional cash transfer programs to increase investment in
human capital has generated considerable excitement in both
research and policy forums. This article surveys the
existing literature, which suggests that most conditional
cash transfer programs are used for essentially one of two
purposes: restoring efficiency when externalities exist or
improving equity by targeting resources to poor households.
The programs often meet their stated objectives, but in some
instances there is tension between the efficiency and equity
objectives. The overall impact of a program depends on the
gains and losses associated with each objective.