Is Conditional Cash Transfer the Cure for Poverty

           According to the World Bank’s bank (2019), In 2015, approximately 10 % of the world’s population lived in poverty.  Although the decline of global poverty continues, the rate of decline in poverty has slowed down, which challenges the World bank’s goal of ending poverty by 2030. People who live in poverty are at increase risk for numerous adverse outcomes. For example, compared to their counterparts raised without poverty, youth grow up in poor household are more likely to have academic difficulties, school dropout, behavioral and emotional problems, and a higher chance of living in poverty as adults. In addition, youth living in poverty are more likely than their peers with higher socioeconomic status backgrounds to engage in risk-taking and antisocial behaviors (Machell et al., 2015).   

           With all potential significant damages poverty brings, no wonder poverty alleviation is one of the priorities on many international organizations and federal and local government’s agenda.  Many policies have developed to fight poverty. For instance, the 2004 World Development Report, Making Services Work for Poor People showcases the inclusion of poverty reduction as the focus of development. The importance of poverty alleviation was also highlighted in  Poverty Reduction Strategy Papers (PRSP).  PRSP is one of the most significant instruments calling international organizations to support governments worldwide to fight poverty by assessing the vulnerability to potential poverty-producing impacts and providing the necessary resources so that the people live in poverty may survive through these impacts.   The theoretical foundation of theses policies is social capital theories. The core of social capital theories is to activate the poor, and so they can change their situation. Accordingly, the role of policy includes empowering the poor and support them to utilize existing economic and social opportunities. The poor may improve their life by taking advantages of their social networks and having their voice heard in social policy consultation bodies (Atria, 2003; Verger et al., 2018)

           Empowering people through education is backed up by evidence.  Education has been shown to help reduce poverty in both developing and developed countries, stimulate economic growth, and improve general living standards (Van der Berg, 2008). Conditional Cash Transfer (CCT) programs are a classic example of how polices can be employed to provide education for poor people. Conditional cash transfer (CCT) programs provide families in poverty with cash dependent on investments in education. State and federal governments in Brazil initiated CCTs in education on a large scale in the mid-1990s. In Brazil, the State of Brazilia started the first Bolsa Escola in 1995.  The goal of CCT is to break the intergenerational reproduction of poverty.  Although the idea of CCT is sound, the effects of CCT on school performance are mixed. CCTs have helped increase school access and reduce child labor, but they haven’t done much in terms of improving education quality, preventing dropout, and promoting school improvement.

           One may ask whether CCTs are or are not worth implementing. Can CCT break the reproduction of poverty? Several factors need to be considered when answering this question. Specifically, we need to consider the design of a CCT, its targeting beneficiaries, and the evaluation system of a CCT.  Use Bolsa Escola in Brasilia as an example. The target population for the program was mainly decided based on the territorial and vulnerability criteria.  A scoring system was developed to select families. While the efficacy of the CCT program depending on the monitoring and control procedures, the resources used for the monitoring and control procedure exhausted the funds otherwise could be used to increase coverage. Another dilemma the CCT program confronted was the amount of transfer. To many factors and different political players’ varied agendas make it very difficult to make the decision.

          Policymakers need some tools to help them formulate a better CCT policy and conduct evaluation and monitoring for the policy formulated. Big data seems promising to facilitate policymaking.  Big data technology can not only process datasets that are too large for traditional processing systems but also analyze data with more variety, velocity, and uncertainty. It allows policymakers to combine digitizing administrative data, collecting data through various sources, and have a better estimation of uncertainty (Giest, 2017).  With help from big data technology, it would be easier to decide key factors of CCT, such as the developing scoring system, selecting families based on the scoring systems, monitoring the impact of CCT on program beneficiaries, and deciding the amount to transfer.

            Last but not least, when making education policy, policymakers need to always focus on education quality.  We can not be satisfied with just providing children education access, but we should commit to providing education that can actualize children’s potentials while meeting their social and emotional needs. Only when a CCT can provide access to high-quality education,  it can be counted as a cure for poverty.

References

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Giest, S. (2017). Big data for policymaking: fad or fasttrack? Policy Sciences, 50(3), 367–382. https://doi.org/10.1007/s11077-017-9293-1

Holzmann, R., Sherburne-Benz, L. and Tesliuc, E. (2003). Social risk management: The World Bank’s approach to social protection in a globalizing world.Washington, DC: The World Bank.

Machell, K. A., Disabato, D. J., & Kashdan, T. B. (2015). Buffering the Negative Impact of Poverty on Youth: The Power of Purpose in Life. Social Indicators Research, 126(2), 845–861. doi: 10.1007/s11205-015-0917-6

World Bank (2001). World development report 2000/2001. Attacking poverty.

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 World Bank.(2019). Understand Poverty . Retrieved March 24, 2020, from https://www.worldbank.org/en/topic/poverty/overview

Van den Berg, S., 2008. Poverty and Education. Education Policy Series 10, International Institute for Educational Planning/International Academy of Education, Paris/Brussels.

Verger, A., Novelli, M. & Altinyelken, H. (2018). Global education policy and International development: New agendas, issues, and policies. London: Bloomsbury.

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