Conditionality and the Impact of Program Design on Household Welfare: Comparing Two Diverse Cash Transfer Programs in Rural Mexico

ESA Working Paper No. 02-10

Posted: 9 Jan 2019

See all articles by Paul Winters

Paul Winters

International Fund for Agricultural Development (IFAD)

Benjamin Davis

UNICEF South Africa

Sudhanshu Handa

University of North Carolina (UNC) at Chapel Hill - Department of Public Policy; Consultative Group on International Agricultural Research (CGIAR)

Marta Ruiz-Arranz

International Monetary Fund (IMF)

Marco Stampini

affiliation not provided to SSRN

Date Written: 2002

Abstract

In this paper, we examine how the design of cash transfer schemes influences household welfare outcomes with particular reference to the influence of transfers on conditioned outcomes, such as schooling, health and investment. We do this by examining two innovative cash transfer schemes initiated by the Mexican government in the last decade: PROGRESA, which is a national antipoverty scheme directed at chronic rural poverty, and PROCAMPO, which is a scheme designed to compensate farmers for the negative price effects of NAFTA. The schemes differ in that PROGRESA is targeted at women and conditioned on schooling and health outcomes and PROCAMPO is generally targeted at men and conditioned on land use. The analysis of data collected for an evaluation of PROGRESA suggest that the overall effects of the programs, as measured by total and food consumption expenditure, are not different. However, PROGRESA leads to greater schooling expenditure and school attendance as well as increased health outcomes. On the other hand, PROCAMPO is found to lead to increased investment in agriculture. The results suggest that conditionality may have little effect in terms of short-term welfare outcomes, but do influence both longer-term (human capital) and medium term (productive) investment. Policy makers must consider both whether or not conditions should be placed on a program, and the type of condition, depending on what they perceive to be the desirables outcomes of the transfer scheme.

Suggested Citation

Winters, Paul and Davis, Benjamin and Handa, Sudhanshu and Ruiz-Arranz, Marta and Stampini, Marco, Conditionality and the Impact of Program Design on Household Welfare: Comparing Two Diverse Cash Transfer Programs in Rural Mexico (2002). ESA Working Paper No. 02-10 , Available at SSRN: https://ssrn.com/abstract=3307437

Paul Winters (Contact Author)

International Fund for Agricultural Development (IFAD) ( email )

Via Paolo di Dono
Rome, 00142
Italy

Benjamin Davis

UNICEF South Africa ( email )

P. O. Box 4884
Pretoria
South Africa

Sudhanshu Handa

University of North Carolina (UNC) at Chapel Hill - Department of Public Policy ( email )

Abernathy Hall
Chapel Hill, NC 27599-3435
United States
(919) 843-0350 (Phone)
(919) 962-5824 (Fax)

HOME PAGE: http://www.unc.edu/depts/pubpol/handa.html

Consultative Group on International Agricultural Research (CGIAR) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Marta Ruiz-Arranz

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Marco Stampini

affiliation not provided to SSRN ( email )

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