Conditional Cash Transfers: Taking ‘a hand up, not a hand out’ from theory to implementation
Whether it is people who are shopping based on what coupons they have, to car insurance companies giving better rates for better drivers, economic incentives dictate many of the actions in our lives. Based on this logic, is it possible to use economic incentives to make a meaningful impact on poverty? Any realistic look at the state of affairs when it comes to poverty is quite depressing. As we have learned during Professor Mark Roosevelt’s1 lectures and Charles Murray’s book Losing Ground four decades after President Lyndon Johnson declared a War on Poverty, it is a war that in many ways we are losing.
It is time for new and innovative ideas when it comes to tacking this issue. One of these new ideas is to offer economic incentives to encourage people to engage in activities that many believe will help lift them out of poverty. For the last two decades, twelve countries have used economic incentives to help attempt to curb poverty. Known as Conditional Cash Transfer (CCT) Programs, they have had different levels of success. In the first part of this paper I will state some about each of the most extensive programs. I will state what has worked and what hasn’t later in the paper I will offer suggestions on how to improve programs to expand their reach and impact.