October 8, 2012


The Simplest Way To End Poverty Might Be To Just Give Money Away : Conditional cash transfer programs--which give cash rewards for things like getting vaccinations or enrolling kids in school--might sound like free money, but evidence is mounting about their effectiveness. (MICHAEL J. COREN, 10/08/12, Co.Exist)

For centuries, it was anathema to give money to the poor for fear of creating dependency. The welfare state, particularly in the United States, was derided as ineffective and pernicious to liberty.

Yet it may a far smaller problem that we once thought. The New America Foundation, a nonpartisan public policy institute, has released a new report showing that conditional cash transfer (CCT) programs are driving down poverty around the world by addressing the dominant "institutional, environmental, historical, racial, and social" causes of extreme poverty, rather than merely avoiding the risk of individual freeloaders.

CCTs transfer cash directly to recipients who fulfill certain criteria such as enrolling their children in school, finding regular medical care, vaccinations, and other programs. Families can use the program to escape their day-to-day survival mode precluding any significant investment in the future.

New America has identified about 90 cash transfer programs in 45 countries that cover half a billion beneficiaries. Programs such as Mexico's Oportunidades (formerly known as PROGRESA) was reportedly associated with "a 30% reduction in the poverty gap" and raised the average (age-adjusted) height of children receiving benefits by 1 centimeter. Combining these programs with modern technology linking almost anyone to the formal financial services, promises to drive radical reductions in poverty.

Posted by at October 8, 2012 6:57 PM

blog comments powered by Disqus