Wednesday, September 23, 2009

The conditional cash transfers of Latin America

Conditional cash transfers have been applauded by many as a great way to help people in poverty. Instead of just giving people money because they are poor, the governments set conditions on receiving the money. For Mexico and Brazil, parents have to keep their children in school to receive the money. The idea has recently been tried in New York City.

From McClatchy Newspapers, writer Tyler Bridges introduces us to one of the program recipients in Brazil, Denise de Oliveira.

Unlike traditional government handouts, however, this popular anti-poverty program, which has spread throughout Latin America and even to New York City, requires that de Oliveira's children stay in school. The children also must have twice-a-year health exams and be vaccinated against diseases.

The program goes by different names — Bolsa Familia (Family Fund) in Brazil and Oportunidades (Opportunities) in Mexico, the most populous countries it's in — and has slightly different rules depending on the country. Analysts say it's become the most successful anti-poverty program in years because it requires the poor to do something meaningful and measurable in exchange for government charity.

"I have worked in this field for 30 years in every region of the world," said Helena Uribe, a senior anti-poverty specialist at the World Bank in Washington. "This is the one (program) that works. It has showed that you can reach poor people today and position them to improve opportunities over a lifetime."

"The programs are popular because they have quick impacts that are measurable," said Amanda Glassman, a specialist in the program at the Inter-American Development Bank. "Well-child visits go up. Vaccination rates go up. School attendance goes up. Kids are taller for their age, even if they've been in the program for only a year."

Fears that the program would encourage families to have more children, stay at home rather than work to collect benefits or become playthings of patronage-happy politicians have proved to be unfounded, Glassman added.

(Sergei) Soares, who calls the program a huge success, said it had done little to reduce poverty in Brazil because its greatest impact had been keeping the poorest of the poor alive and making their lives somewhat more bearable. In other words, they've moved up from the bottom rung, but remain poor.

The program also has yet to lift classroom test scores in Mexico, the one country where data are available. It's barely raised school enrollment in urban areas throughout the region because most children already were in school.

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