Conditional Cash Transfer (CCT) programs have become the main social assistance interventions in Latin America and the Caribbean (LAC), reaching 129 million individuals in 18 countries in 2010. Programs shared key characteristics such as the payment of cash grants and the incorporation of co-responsibilities, but varied greatly in terms of coverage, infrastructure, routines, and even objectives. In this study, the authors analyze the experience of six countries (Brazil, Colombia, Honduras, Jamaica, Mexico and Peru) and attempt to identify important lessons for countries that have recently started or that are currently considering the introduction of a CCT. The methodology includes a review of scientific and technical literature, as well as interviews with key government and program personnel. They show that:
i. CCTs are long term interventions, whose budgets grow over time and typically converge to 0.3-0.4% of GDP.
ii. The long term objective of breaking the intergenerational transmission of poverty through the development of human capital requires additional budget allocations for the expansion of the supply of education and health care services.
iii. Beyond the allocation of budget resources, the setup of inter-sector coordination mechanisms (between social protection, health and education), the coordination with local governments and the supervision of the highest government hierarchies are necessary to ensure that CCTs produce human capital development impacts.
iv. The accurate targeting of beneficiaries is key to ensuring program credibility. Beneficiaries are typically selected through a combination of geographical and categorical criteria, followed by means-testing and community validation.
v. Efforts to increase the precision of targeting cannot eliminate errors of both exclusion and inclusion. These can however be mitigated through regular audits, the dynamic management of the registry of beneficiaries, and processes of recertification.
vi. The search for operational efficiency and effectiveness requires considerable (financial and human resource) investments in monitoring and evaluation. Results feed back into program design, producing incremental innovations.
vii. Modern payment systems are needed to reduce the administrative cost of delivering the cash grants, and the opportunity cost of beneficiaries’ participation. Countries tend to converge towards the use of bank cards.
viii. The effect of CCT programs on gender inequality has been reduced by the lack of attempts to redefine women’s household roles and responsibilities.
Countries attempting to leapfrog early starters in LAC should critically consider the lessons drawn in this report. In addition, they should synchronize program expansion with the speed of the development of education and health supply, as well as of the institutional capacity of both central and local administrations.