Come on and open up your heart!

 

This blog originally appeared on Development Pathways

I very much enjoyed Stephen Kidd’s humble and courageous admission that he is a reformed poverty-targeter! And I admire his plaintive appeal to all deluded believers in poverty targeting: “please, look at the evidence”.

But I am not sure that evidence is the answer. After all, as Stephen says, many of the precepts of targeting the poorest “seemed logical”. Rather, I would like to begin with a quotation from Blaise Pascal, a French polymath from the 17th century, who wrote that “Le cœur a ses raisons que la raison ne connaît point”: the heart has its reasons, which Reason knows nothing about.

To illustrate this, please allow me also to indulge in some personal reflections! Like Stephen, I have been working in social protection since it became fashionable in the early 2000s. At that time, I was Programme Director of the DFID- and AusAID-funded (as they were then!) Regional Hunger and Vulnerability Programme (RHVP), promoting social protection across southern Africa. We were fortunate enough to have an extremely enlightened team,1 and we agreed from the outset that we would be guided by our principles. These were exciting times for social protection, and the final evaluation of RHVP by the Overseas Development Institute (cited in our Valedictory blog) found that “the Programme stuck to strong, clear messages on social protection and took an ‘uncompromising’ approach which sometimes involved controversial or critical stances. In many cases this drew defensive reactions, but over the course of the Programme, not only were many of those messages vindicated, but the messages delivered can be linked to a number of concrete policy changes”.

We did not approve of the Kalomo social cash transfer pilot that Stephen now admits to have been promoting to his DFID colleagues. First, we were opposed to all such pilots. We didn’t feel it was right to be “experimenting with the lives of the most vulnerable”, and we wrote a Comment (which would nowadays be called a Blog) arguing that: “A social protection pilot that comes into a community to try out a new form of transfer can undermine existing coping systems, build reliance on the new transfer and create expectations of future support. When the pilot comes to an end and if it is not brought into the mainstream of an adequately funded and properly managed on-budget programme, the beneficiaries may even be left in a more vulnerable state than before the pilot entered their lives”.

But, second and more importantly, we were viscerally opposed to the concept of targeting the 10% poorest, appallingly named the “non-viable poor”. You don’t need evidence to know that it is impossible to identify the poorest 10% (imagine trying to do that among a group of your friends or colleagues). You don’t need evidence to be certain that, even if you could, your assessment would change from one day to the next. You don’t need evidence to be aware that most of the 10% poorest in one district can be far better off than the 10% poorest in another district. You don’t need evidence to understand how damaging it will be to social cohesion to provide a cash transfer to one household and not to the near-identically deprived household next door. You don’t need evidence to recognise the stigma that might be attached to being categorized as “non-viable”. Your heart tells you all of this!

We had already written a general Comment “Missing the Target” which argued that “The sooner we … move to universal rather than targeted social transfers, the sooner social protection – in whatever guise – will have a genuine impact on poverty.” Then, as evidence started to emerge from Kalomo, and – horror of horrors – we found that it was to be carbon-copied in Mchinji, Malawi, we wrote a more specific Comment. This was called “One Out of Ten: Social Cash Transfer Pilots in Malawi and Zambia”, in which we argued that “we need to be honest enough to recognise the fatal flaw in the prevailing model: that community-based targeting of an inadequate 10% quota is an unacceptable model for national replicability in sub-Saharan Africa”. [I returned to the same subject, in a couple of blogs for Development Pathways: one on “Crocodiles and CROCO dials”, and another a spoof review of the World Bank’s 2022 “Revisiting Targeting in Social Assistance: A New Look at Old Dilemmas”.]

Nor is it only in the area of poverty-targeting that you can usefully rely on instinctive gut-feeling rather than on rational evidence. From an early stage of RHVP, we were opposed to workfare programmes as a component of social protection. How can you possibly justify to someone who needs social assistance that they have to undertake labour-intensive public works in order to get it, expending valuable energy, incurring high opportunity costs, neglecting household responsibilities, sometimes taking children out of school, and so on. We wrote a couple more blogs on this too. One was specific to Ethiopia’s Productive Safety Net Programme (an aberration which continues to this day, and which I have again revisited in a blog called “Thidwick in Ethiopia”!), and one was a more general one called “Public Works Don’t”.

Similarly with the conditions that are sometimes attached to cash transfers. Again, our initial dislike of conditionality was instinctual rather than evidence-based. How is it possible to claim that you are providing social assistance, when you can punish beneficiaries by taking it away if they don’t behave as you ask them to behave? It should also be abundantly obvious that monitoring compliance with imposed conditions places an additional burden on already-overworked staff at schools and health centres. Much better to trust beneficiaries to do what is best for them, and to keep the system simple. [As another French polymath, Antoine de Saint-Exupery, wrote, this time in the 20th century: “La perfection est atteinte, non pas lorsqu’il n’y a plus rien à ajouter, mais lorsqu’il n’y a plus rien à retirer” – perfection is attained, not when there is nothing left to add, but when there is nothing left to take away.]

We wrote a series of blogs spelling out the shortcomings of Conditional Cash Transfers (CCTs) under the slightly corny pseudonym of “Sissy Teese”; and an article in the IDS Bulletin which echoed Thomas Love Peacock’s assertion about the sugar trade in the West Indies that CCTs are “economically superfluous, physically pernicious, morally atrocious and politically abominable”.

It really staggers me, twenty years on, that we are still having to persuade unreconstructed poverty targeters that such targeting is an embarrassing dead-end, that workfare is as unacceptable now as it was in Victorian poor-houses, and that people should not be deprived of social assistance if they don’t meet arbitrarily imposed conditions.

I fear that evidence is not enough. So I end with a final quotation, from a contemporary and distinctly non-French polymath, Bruce Springsteen: “Come on and open up your heart”. In matters of social protection, please trust your instincts and do what your heart tells you!

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[1] Core members of the policy team were John Rook, Philip White and Katharine Vincent, with frequent support from Stephen Devereux, Frank Ellis, Anna McCord, Rachel Sabates-Wheeler, Michael Samson, Rachel Slater, and others.

MCTs: Mislabelled Cash Transfers

The original version of this blog appeared as a Pathways Perspective on Development Pathways

A new sleight of prestidigitation has occurred in the arcane world of the wizards of conditionality!

As readers may be aware, these conditionistas have promoted four major experiments over the last few years, which they hoped would demonstrate, once and for all, the added value of imposing conditions on the recipients of social transfers. After a series of contested, controversial, but ultimately rather disappointing results from the first three experiments (in Malawi[i], Burkina Faso and Kenya), all hopes were pinned on the fourth experiment, the Tayssir programme in Morocco. This was a two-year pilot designed to increase student participation in primary school, in which independent researchers partnered with the Government of Morocco to evaluate whether imposing conditions increased the educational impact of the cash transfer. [It also had a secondary research purpose, to establish whether it made any difference if the transfer was made to the father or to the mother.]

As with the other three experiments, the methodology used represents what the World Bank’s magnum opus on CCTs[ii] describes as the gold standard:

Ideally, to disentangle the effect of conditions from the income effect inherent in the transfer, an experiment would be designed whereby a first group of households or villages receives a UCT, a second group receives a CCT, and a third group serves as a control group.

This is exactly what happened in Morocco, and the results have just been reported in a paper dated July 13, 2013[iii]. There were essentially two versions of the programme. In its unconditional arm, families with children of primary school age could receive transfers whether or not their children attended school, while, in its conditional arm, cash transfers were disbursed to parents of primary school-age children only on condition that their child did not miss school more than four times each month. [These two groups were further subdivided, to determine if the effectiveness of the transfers depended on the gender of the parent who received the transfer (the child's mother or father).]

Each school sector sampled for the study was randomly assigned to one of five groups:

·       UCT issued to fathers: 80 communities from 40 school sectors.

·       UCT issued to mothers: 80 communities from 40 school sectors.

·       CCT issued to fathers: 180 communities from 90 school sectors.

·       CCT issued to mothers: 178 communities from 89 school sectors.

·       Comparison group: 118 communities from 59 school sectors received no transfers.

Researchers collected information on student attendance and enrolment status for over 47,000 primary school aged children through unannounced visits to all schools. Comprehensive baseline and endline surveys gathered data on around 4,400 households. At endline, a basic test was administered to measure the arithmetic performance of one child per household.

And the result? Overall the impact of providing the cash transfer was impressive: “The Tayssir cash transfers greatly increased school participation under all versions of the program, with the UCT having slightly larger impacts. After two years, the dropout rate among students enrolled in school at the start of the program in UCT schools was about 7 percentage points lower than the dropout rate in comparison schools (at 10 percent), a 70 percent decrease. Re-enrollment of those who had dropped out of school before the program almost doubled in UCT schools as compared to comparison schools, and the share of students who never enrolled in school fell by 43 percent. Performance on a basic arithmetic test improved but not significantly.” [iv]

All well and good. But what about the key question the experiment was meant to be answering, to which there is the tantalising reference underlined above? Yes, indeed. The findings continue: “Making cash transfers conditional did not improve the effectiveness of the program, but may actually have somewhat reduced it: relative to UCT schools, CCT schools had a slightly higher drop-out rate.” Furthermore, “While the CCTs also had a large positive effect on school participation, explicitly conditioning transfers on attendance significantly decreased their impact in the context of this program. In particular, relative to UCTs, CCTs lowered the impact on re-enrollment of children who had dropped out, perhaps because conditionality discouraged some households (or some teachers) from enrolling weaker children in the program. Correspondingly, CCTs also had a significantly lower impact than UCTs on math scores (CCTs had no impact whatsoever, with negative point estimates).”[v]

Oh dear! Not at all what the conditionistas would have wanted to hear! But because the research had been conducted in partnership with an independent institution, it appears that it wasn’t possible, on this occasion, to revisit the data or redo the analysis (as had happened in the case of Malawi). So the conditionistas did the only thing that was available to them: they invented a new category of cash transfer, a Labelled Cash Transfer (or LCT). This is essentially a UCT that has a message attached, a UCT which tells you that education is good for your child, a UCT for which you need to sign up on school premises. The report suggests that this makes an LCT different from a UCT, and implies that an LCT lies somewhere midway along the spectrum between a UCT and a CCT.

What this means, conveniently for the conditionistas, is that all those uncomfortable findings about a UCT outperforming a CCT can be made to disappear like a rabbit in a hat. The report is explicit about this:

“Note that the comparison between LCTs and CCTs tells us little about the question that other papers in the literature have addressed, namely how an unconditional and unlabeled cash transfer program would compare to a CCT.”

Gobbledygook!! This argument requires that an LCT is not the same as a UCT. Is this tenable? Of course not! A UCT does not become “more conditional” (and thus turn into a new beast, an LCT) just because it has a message attached. A condition is a condition: it is, by definition, a requirement that must be fulfilled in order to receive the transfer, where you are punished if you do not fulfil that condition. If a program does not have that (and the LCT arm in Morocco does not), then it is “unconditional”, pure and simple. Think of this in different context: if a driver has a license, he or she is a licensed driver; if not, he or she is an unlicensed driver. Or another: if a researcher adheres to a set of principles, he or she is a principled researched; if not, he or she is an unprincipled researcher. Ergo, an LCT is a UCT, but just one that places greater emphasis on its messaging. And nobody has ever suggested that such messaging is not a very important component of any cash transfer programme.

What is interesting is where the impetus came from, to mis-label UCTs in this manner. One would assume that it did not come internally, from the authors of the research paper. This is because, intriguingly, there exists an earlier version of their report, dated December 4, 2012. And in this version of the report there is no mention whatsoever of an LCT, the words “label”/“labelled” do not appear one single time, the treatment design is unequivocally defined as “conditional vs. unconditional”, and the respective target groups in the experiment are explicitly described as “UCT to mothers” and “UCT to fathers”. Mysterious indeed that LCTs have reared their ugly heads in the space of just seven months. At whose behest? I think we should be told!

Whatever the answer, there are some key messages that emerge from this important study, and they have nothing to do with Labelled Cash Transfers. These are that, in the case of Morocco:

·       Even small cash transfers have a hugely beneficial impact on schooling

·       Applying conditions has a negative impact on programme performance, whilst at the same time increasing both cost and complexity

·       It makes no difference whether the transfer is given to the father or the mother

·       The existence of an effective information and education campaign increases the impact of the transfers.

These findings have serious implications for policy, and should not be obscured by the chicanery of an invented and unnecessary new category of cash transfer. Please may the authors recognise this, and rewrite their report along the lines of their earlier draft, thus proving that they are principled researchers rather than “labelled researchers”! Otherwise there is a danger of not seeing the Bretton Woods for the LCTs.

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[i] For a critique of the Malawi experiment, see: Kidd and Calder (2012) The Zomba Conditional Cash Transfer Experiment: an assessment of its methodology. Pathways Perspective No. 6, September 2012.

[ii] Fiszbein, A., and Schady, N., “Conditional Cash Transfers: reducing Present and Future Poverty”, World Bank Policy Research Report, 2009.

[iii] Turning a Shove into a Nudge? A “Labeled Cash Transfer” for Education by Najy Benhassine, Florencia Devoto, Esther Duflo, Pascaline Dupas and Victor Pouliquen.

[iv] NB In these quotations from the report, I have replaced the misleading term “LCT” with the correct term “UCT” – for the reasons explained in the subsequent paragraphs.

[v] Ditto.

And now for something completely different: Contraceptional Cash Transfers

This blog first appeared on the Wahenga website, under the pseudonym of Sissy Teese

The World Bank can only be doing this to provoke me! Just when I had vowed never to take up my pen in anger again (and when Wahenga had vowed never to air my pseudonymical rants) … they do this!!

We already know, because the Bank has told us, that Conditional Cash Transfers (CCT) can do everything! First we had Conspirational Cash Transfers. Then we had Connubial Cash Transfers. And now we have Contraceptional Cash Transfers. A paper just launched describes an experiment - “Rewarding STI Prevention and Control in Tanzania” (with the horrendously contrived acronym of RESPECT, no less!), which provides quarterly cash transfers, each equivalent to nearly one-tenth of average annual income, to those who avoid unsafe sex!

We hear that the study “has three separate arms [all the better to hold you with, my dear!!] – a control arm and two intervention arms (low-value cash rewards and high-value cash rewards).  Study participants were randomly allocated across the three study arms. All participants have been monitored on a regular basis (every 4 months over a 12 month period) for the presence of common sexually-transmitted infections (STIs) that are transmitted through unprotected sexual contact and therefore serve as a proxy for risky sexual behavior and vulnerability to HIV infection.  A small payment has been provided to all participants (regardless of arm assignment) to minimize attrition from the study.  Anyone testing positive for an STI (again, regardless of arm) received free STI treatment and counseling. Individual pre-test and post-test counseling was provided to study enrollees [the word “enrollees” has a wonderful ring to it in this context!!] at each testing interval, and monthly group counseling sessions were also made available to all study participants in all villages.”

And it works! And, what is more, it seems that the more you pay, the better it works!

By the end of one year, “study participants who were randomly selected to be eligible for a $20 payment every 4 months if they tested negative for a set of curable STIs, experienced a 25% reduction in the incidence of those STIs. After one year, 9% of individuals in the group that received the $20 quarterly payment were positive for one of the STIs, compared to 12% in the control group”.

We also learn that “the two year study cost $1.8m”, which must surely make it the most expensive condom in African history. And maybe this is where the reality check comes in: the finances. Let us look at this from two different perspectives.

First, the experiment. We have a sample of 2399 (why not 2400?). Of these, let’s assume one-third (remember the three arms?) received the higher transfer value - i.e. 800 people. Of these, 3% (i.e. the difference between 9% and 12%) avoided STIs as a result of the transfer - that is 24 individuals. So it cost probably 800 x $60 in transfers, plus all the costs of testing and administration - let’s say conservatively $100,000 in total annually - to prevent 24 individuals from getting an STI. That is over $4,000 each. Condoms would have been a cheaper option.

Second, consider this programme scaled up, nationally, to cover the whole of Tanzania. To be effective, it would need to be targeted universally, at all who were sexually active, so between the ages of 12 and 60. That is more than 22 million people. The pilot cost $750 per person, but we can assume some economies of scale, so let’s say $500 per person. That is a total programme cost of $11 billion, equivalent to 50% of GDP at official exchange rates. By way of comparison, the ILO calculated that Tanzania could afford a full “basic social protection package”, comprising a universal pension for all over-65s and all persons with disabilities, a universal child benefit to all under-15s and universal access to basic health care … all for 17% of GDP. Alternatively, $11 billion could buy you 110 billion condoms, more than five times the number currently produced worldwide annually!

But - since money is no object - what next for the World Bank? How else might they influence people’s behaviour for the better? My vote is for some form of Conflagrational Cash Transfer, providing nicotine vouchers to all who refrain from smoking cigarettes … or maybe Congregational Cash Transfers, distributing multiples of the collection plate to all who faithfully attend church every Sunday … or a Consumptional Transfer of unlimited maize meal to all who eschew junk food for the month … or a Convivial Cash Transfer to those who moderate their alcohol intake … or perhaps Constipational Cash Transfers, providing monthly supplies of suppositories to all those performing their ablutions regularly on a daily basis.

Maybe my writing days aren’t over yet …

An appeal against "Conditionalities"

As RHVP - and perhaps Wahenga - draw to a close, I would like to use our pages to make a personal and heartfelt appeal to the social transfers community: please can we stop using the horrible word “conditionalities”?

I would like to stress that this plea has nothing to do with the debate about the relative merits of conditional and unconditional cash transfers that has been raging on Wahenga’s pages recently (Sissy Teese v World Bank): it is aimed squarely at writers at both ends of that seemingly unbridgeable spectrum. But let me at least draw on those Wahenga exchanges to quote a couple of examples:

“why bother with the moral hazard, additional cost and complexity of imposing, monitoring and enforcing conditionalities, when unconditional programmes appear to have the same effects?” (Ms Teese) 

“[CCTs] combine three key mechanisms: grants that increase the income of poor households, awareness promotion that emphasises the importance of human capital, and conditionalities that link the two” (EPRI “Designing and Implementing Social Cash Transfers” [2006], quoted by Ms Teese)

The danger is that this ugly terminology is becoming firmly entrenched in the literature: it is used over 200 times in the EPRI manual cited above[i], it has sneaked into the World Bank’s seminal “tome” on “Conditional Cash Transfers” (2009), and it is being replicated in countless papers, articles and journals.

What is wrong with the word “conditionalities”? First, it is not a word; second, if it were, it would mean something quite different; and third, it is wholly unnecessary, since we already have a perfectly good word that we can use in its place.

1)    It is not a word because it does not appear in any dictionaries, and because the irreproachable Microsoft Word gives it a red squiggly underline, in whatever language you are using.

2)    Even if were to be coined as a neologism, it would be meaningless: we can apply a “condition”, or multiple “conditions”. We can thereby make things “conditional” (ie “dependent on the fulfilment of one or more conditions”); and we can therefore have a system that is based on the concept of “conditionality” (ie the “state of being conditional”). But we cannot have multiple “conditionalities” - and, if we could, it could only mean “multiple states of being conditional”.

3)    So, if we can’t use the word “conditionalities”, what can we use instead? We need a word that has the definition of “actions stipulated as requirements before the performance or fulfilment of other actions”. Does such a word exist? Miraculously, it does: the word is … “conditions”! Try it for yourself in each of the examples cited above: you must agree that it improves them!

So this is my plea: let us have no more “conditionalities” in social transfers! But - lest this sounds as if I am aligning myself with the sassy Sissy - let us equally have no hesitation in applying “conditions” to cash transfers wherever they are agreed to be appropriate!

It is important to nip this awful usage in the bud now, because the use of conditions in social transfers is clearly a ubiquitous and fast-growing phenomenon, both in the World Bank’s portfolio and elsewhere. Or to put it another way: without wishing to cause confrontationalities, in order to have confirmationalities of the proliferationalities of the utilisationalities of conditionalities in social transfers, in both connurbationalities and rural locationalities, you need only to make random observationalities in the World Bank’s “Manual of Operationalities”!

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[i] The otherwise excellent EPRI manual is to be republished soon. Please can we ensure that it drops the use of the term “conditionalities” in its second edition?

Connubial Cash Transfers

This blog first appeared on the Wahenga website, under the pseudonym of Sissy Teese

With some reluctance, I take up the cudgel again!

I have recently had the good fortune to read the Bank’s latest Policy Research Working Paper (No 5259)[i]. This is another fascinating, meticulously researched and well-argued paper about the same cash transfer programme in southern Malawi that was cited in our earlier wahenga exchanges about the impact of conditionality on schooling - the Zomba Cash Transfer Program (ZCTP). Entitled “Cash or Condition”, the Paper’s specific objective is to disentangle the impact of the condition from the impact of the cash transfer by reporting on the first “ideal experiment to answer this question – i.e. a randomized controlled trial with one treatment arm receiving conditional cash transfers, another receiving unconditional transfers, and a control group receiving no transfers” [emphasis in original].

Not even I could fail to be impressed by the refreshing candour of the Abstract, which states unequivocally that:

 “the authors find that the program reduced the dropout rate by more than 40 percent and substantially increased regular school attendance among the target population of adolescent girls. However, they do not detect a higher impact in the conditional treatment group” [emphasis added].

After such an admirable display of openness, it might seem churlish to complain! But there are a couple of more worrying findings which emerge from the Working Paper that shed further significant light on the debate between CCTs and UCTs. One of these is clearly recognised in the paper (although, noticeably, it doesn’t make it into the Abstract!), while the other is tucked away unobtrusively in a footnote.

The first is that UCTs dramatically reduce the probability of early marriage, while CCTs do not:

 “the unconditional treatment reduced the probability of marriage by 2.7 percentage points (or by 56%), whereas the marriage rate in the conditional group was identical to that in the control group”.

The paper suggests a dispassionate economic argument to evoke “the possibility that a CCT offer could actually trigger marriage by presenting the girl with an untenable schooling alternative and forcing the household into a decision [of early marriage] at the time of the offer” [emphasis added]. But might there not be another, more human, explanation: that beneficiaries of unconditional transfers feel more empowered, and more independent, and more confident of making sensible life-choices than recipients of conditional transfers from an intrusively paternalistic nanny-state? This would after all, conform to standard economic theory, helpfully reiterated in this Working Paper, that “in the absence of externalities, conditional cash transfers are worse than distributing an equivalent amount of unconditional cash”. 

The second, perhaps even more serious, concern is tucked away in a footnote:

 “the program led to substantially elevated stress and psychological morbidity among adolescent girls in the conditional group relative to the unconditional arm”.

Again, the implication is clear. The imposition of conditionality places additional stress on the recipient, and creates tensions within the household between those that must adhere to the conditions (in this case, the school-age girls) and those that benefit from the transfer (siblings, parents, carers, grandparents). What is worse, the authors “also find that the mental health of the CCT recipients worsen [sic] when the transfer amount offered to the parents is larger, while the mental health of UCT recipients is uncorrelated with the transfers offered to the parents”. In other words, the higher the value of the transfer that rests on fulfilling the conditions, the greater the stress for CCT recipients.

Surely these are serious concerns, and a reason to argue more forcefully in favour of unconditional transfers? What this impressive study tells us is not only the already important message contained in the conclusion that: 

“given that the marginal impact of imposing a schooling conditionality is at best low [it is in fact absent!], and that monitoring school attendance to enforce the conditionality is costly, it seems that policymakers can consider unconditional cash transfers as a viable alternative”.

It also raises two potentially damaging criticisms of conditionality, and therefore two significant advantages of UCTs, which - at the very least - merit critical attention and further research. These are:

1)    That, “while unconditional cash transfers nearly eliminate marriage in our study population, the conditional cash transfers have no effect on it”. Early marriage is seriously detrimental to girls’ education (in Latin America and elsewhere, as well as in Malawi), so reducing it, through whatever mechanism, would be a highly desirable outcome in building human capital and reducing the inter-generational transmission of poverty.

2)    That - as might indeed rationally be expected - imposing conditions can inflict psychological damage and create intra-household tensions. Instead of feeling empowered and independent, recipients may feel bullied, pressured and ultimately overwhelmed by the conflicting demands imposed on them, forced into making behavioural choices (like early marriage) that they would otherwise eschew.

Should these two issues not have been given greater prominence in a truly balanced Working Paper, intended as it is to “inform policymakers as to which combination of contract parameters might allow cash transfer programs to deliver the largest impacts per dollar spent”? Should policymakers not be told, upfront, that, on the evidence emerging from Malawi, unconditional transfers have identical benefits in terms of school enrolment and attendance to conditional transfers, while being far less complex and less expensive to implement; and that they appear to be much more effective in reducing disruptive early marriage and minimising psychological stress?

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[i] Baird, S., McIntosh, C. and Özler, B., ‘Cash or Condition? Evidence from a Randomized Cash Transfer Program’, World Bank, March 2010

Conspirational Cash Transfers

This blog first appeared on the Wahenga website, under the pseudonym of Sissy Teese

Is there a conspiracy afoot? Practitioners of social protection have long debated the relative merits of conditional and unconditional cash transfers. Now the World Bank appears to have introduced a third category. We label these conspirational cash transfers: cash transfer programmes about which the evidence is either suppressed or massaged in a conspiracy to support the case for conditional cash transfers!

Before looking at two examples of such schemes (or schemings), let us take stock. Conditional cash transfers (CCT) require beneficiaries to meet one or more conditions before they receive their transfer: for example, to ensure their children are enrolled in, or attend, school, or to have their children inoculated or regularly visit health clinics. Unconditional cash transfers (UCT) do not: they provide the transfer to everyone eligible, regardless of their behaviour.

CCTs fit much better with the World Bank’s philosophy of seeing social protection in dispassionate, purely economic terms. As a recent publication by the Brooks World Poverty Institute puts it: 

The World Bank conceptualizes social protection as social risk management and proposes policies that seek ‘to assist individuals, households and communities in better managing income risks’ (Holzmann and Jorgensen, 1999: 4). It moves beyond what it sees as ‘traditional’ social protection by adding the goals of macroeconomic stability and financial market development. The emphasis on risk assumes that vulnerability to hazards is a significant constraint on economic and human development, and that efforts to reduce the likelihood of hazards, or to ameliorate their effects on living standards, are essential for economic growth and development [emphasis added]

So the World Bank has been promoting CCTs all over the world, and has recently published a 383-page eulogy on CCTs. There can be no doubt in the reader’s mind after perusing this (or even its 28-page “Overview”) that CCTs have been remarkably successful in achieving their objectives of better education, nutrition and health outcomes for their recipients.

But - and this is the nub of the problem - UCTs have done exactly the same. Unconditional programmes, for example in South Africa, Namibia and Malawi, have been every bit as successful in improving health and education indicators among their beneficiaries as CCTs. So there is a legitimate question to be asked of the World Bank: why bother with the moral hazard, additional cost and complexity of imposing, monitoring and enforcing conditionalities, when unconditional programmes appear to have the same effects?

Answering this question is difficult, because it is almost impossible to unpick the reasons why a CCT programme works: is it because of the conditionality, because of the attendant awareness-raising, or simply because of the cash transfer itself. As Samson et al put it when discussing Mexico’s Oportunidades programme: 

[CCTs] combine three key mechanisms: grants that increase the income of poor households, awareness promotion that emphasises the importance of human capital, and conditionalities that link the two – making the grants conditional on behaviours that reinforce human capital development. The evaluations have successfully demonstrated that all three of these ingredients together can generate very positive results. However, the studies so far have been unable to identify which is most important – the income, the awareness or the conditionality[i]

But, just occasionally, the opportunity arises for the Bank to try to demonstrate that it is the impact of conditionality that determines the beneficial impact. And we document here two example of the lengths to which it will go to take full advantage of these opportunities - two Conspirational Cash Transfer schemes in Ecuador and Malawi.

The first, less flagrant but still revealing, comes from an evaluation of the impact of Ecuador’s Bono de Desarrollo Humano (BDH) cash transfer program on school enrolment and child work among poor children. The unusual thing about this programme was that (unlike most other such programmes in Latin America) it was not in fact conditional … though a number of its beneficiaries were under the impression that it was. This allowed a comparison of impact between recipients who were “conditioned” (i.e. who thought there were conditions attached) and those who were “unconditioned” (i.e. who thought there were no such conditions), which is discussed in a paper by Schady and Araujo[ii].

What is interesting here is the marked difference in the conclusions between a first version of the report dated November 27, 2005 (now virtually unobtainable), and the version published officially as World Bank Policy Research Working Paper 3930 in June 2006. The respective abstracts are already instructive. The earlier version reads as follows: 

We conclude that the program had positive effects on enrolment, and negative effects on child work. Enrollment effects are concentrated among the poorest children in our sample. We also show that the impact of the BDH program was largest among households who believed that transfers were conditional on school enrolment, although the effect of the (unenforced) condition appears to have interacted in important ways with baseline socioeconomic status [emphasis added]

The published version reads very differently:

The main results in the paper are two. First, the BDH program had a large, positive impact on school enrollment, about 10 percentage points, and a large, negative impact on child work, about 17 percentage points. Second, the fact that some households believed that there was a school enrollment requirement attached to the transfers, even though such a requirement was never enforced or monitored in Ecuador, helps explain the magnitude of program effects.

What has happened to the caveat about “interaction with baseline socio-economic status”? In the body of the first report, it is clear that - even at baseline - there are marked, observable differences between the “conditioned” and “unconditioned” samples: 

Conditioned households had significantly higher levels of both paternal and maternal education, children in these households were significantly more likely to be enrolled in school, and conditioned households were significantly more likely to have a television.

Such differences may well explain any differences in subsequent impact between the two groups. [There is also the obvious consideration, that, since the evaluation was based on self-reported school attendance and not on objective evidence such as school records, it is far more likely that respondents who believed the transfer to be conditional upon school enrolment would lie about it, compared with those who knew that telling the truth would have no impact on their entitlement. This would greatly inflate the apparent impact on enrolment for “conditioned” households.]

Overall, the findings in the earlier version are hedged around with provisos, recognising that: 

… enrolment regressions at baseline suggest that observable rather than unobservable differences between conditioned and unconditioned households explain differences in their enrolment decisions. We do not have the data to conclusively rule out this possibility [emphasis added] 

… we believe that it is most likely that the perceived, although unenforced conditions played some causal role explaining the large program effects among better-off, conditioned households [emphasis added]

And the conclusion is correspondingly circumspect: 

It would not be wise to conclude from our results that simply announcing that households have to comply with certain conditions, without enforcing them, will substantially affect household behavior in the long run, in Ecuador or elsewhere

In the published Working Paper (only six months later) such doubts are swept away: 

Although the comparison of lottery effects for conditioned and unconditioned is not experimental, we conclude that the general pattern of results is most consistent with the (unenforced) BDH schooling requirement having a causal effect on outcomes

 and the same paper ends now with a ringing endorsement of conditionality: 

In Ecuador, significant program effects on enrollment are only found among households who believed that there was an enrollment requirement associated with the program; this suggests that this unenforced condition was important

Interestingly, another contemporary study of the same programme in Ecuador[iii] finds “no significant impact of the program on school enrolment” and concludes that “the enforcement of conditionality has not any significant effect on school enrolment among the less poor”. This further underlines the need to retain the important caveats of the first version of the World Bank report.

The second egregious example of a Conspirational Cash Transfer is more recent, and comes from a World Bank experiment in Malawi. This was an evaluation of the impact of a randomized conditional/unconditional cash transfer intervention targeting young women in Zomba district that provides incentives (in the form of school fees and cash transfers) to current schoolgirls and young women who have recently dropped out of school to stay in or return to school. Splitting the sample - between some that received a transfer conditionally, some that received it unconditionally and some that received no transfer at all - allowed a comparison of different impacts between the three different groups.

Here again we can observe an unexpected evolution in the published results. The first set of findings is drawn from a publicly available PowerPoint presentation[iv] of the study. This concludes unequivocally that: 

We don’t find any evidence that the conditional transfers are more effective in improving schooling

And it suggests that the best way to design a cost-effective program, based on the lessons learned, would be “possibly foregoing the conditionality”!

Indeed, looking at the data presented (which unfortunately appears on slides in the PowerPoint that cannot be cited), it is clear that there is no significant difference at all between the conditioned and unconditioned groups in terms of school enrolment or literacy in English; and that it is the unconditioned group that performs better in terms of avoiding early marriage. Altogether, on this basis, the study would not appear to present a strong argument in favour of CCTs!

Yet what do we find when the same study is published as official World Bank Policy Research Working Paper 5089[v]? Miraculously the selfsame findings are used to proclaim: 

Overall, these results suggest that conditional (sic) cash transfer programs not only serve as useful tools for improving school attendance, but may also reduce sexual activity, teen pregnancy, and early marriage

 How has this come about? First of all by ignoring entirely the set of data from the unconditional sample. Tucked away in an unobtrusive footnote on page 11 is the following: 

283 of these girls resided in EAs where the offers for baseline schoolgirls were not conditional on school attendance, and, as such, are not part of the analysis for this paper

How convenient! Secondly by arrogating to conditional cash transfers all of the benefits that should rightly be ascribed to cash transfers. Another footnote on page 12 brushes this aside:

Finally, baseline schoolgirls in a randomly selected small percentage of the EAs received unconditional offers, meaning that the transfers were not conditional on school attendance, or any other behavior other than showing up to collect monthly payments, for these beneficiaries in those EAs. The analysis of the heterogeneity of the impacts with respect to each of these design features is beyond the scope of this paper. Here, we aim to establish the average effect of the conditional treatment arms, which may not equal the treatment effect of the average treatment if these impacts are nonlinear [emphasis added]

Quite so! The result is that an experiment which has actually demonstrated that unconditional transfers are every bit as effective as conditional transfers has now been manipulated to support a claim that: 

schooling CCTs (sic) for young women in the context of poor Sub-Saharan countries with high HIV rates seem like “win-win” programs, as they may not only increase schooling for young women, but also significantly reduce their risk of HIV infection.

Yes, the Zomba programme does appear to have extremely promising impacts: large increases in self-reported school enrolment, and declines in early marriage, teenage pregnancy, sexual activity, and risky sexual behaviour. But to claim that this has anything to do with conditionality per se is highly disingenuous. It is self-evidently the cash transfer and not the conditionality that is the cause.

Here we have an important debate, but it is one that should be aired openly and honestly. Policy-makers should be aware of both sides of the argument, and should not allow themselves to be pushed into Conditional - and still less into Conspirational - Cash Transfer programmes!

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[i] Samson, M., van Niekerk, I., and MacQuene, K. (2006) ‘Designing and Implementing Social Transfer Programmes’, Economic and Policy Research Institute Press, Cape Town: EPRI

[ii] Schady, N., and Araujo, M. ‘Cash transfers, conditions, school enrollment, and child work: Evidence from a randomized experiment in Ecuador’

[iii] Ponce, J., The Impact of a Conditional Cash Transfer on School Enrollment: the Bono de Desarrollo Humano of Ecuador”, FLACSO Documento de Trabajo 06/302, April 2006

[iv] Available at http://www.fundp.ac.be/eco/recherche/cred/SUMMERSCHOOL/amid/ozler2.pdf, June 2009

[v] Baird, S., Chirwa, E., McIntosh, C. and Özler, B., The Short-Term Impacts of a Schooling Conditional Cash Transfer Program on the Sexual Behavior of Young Women, World Bank, Oct 2009

Superfluous, pernicious, atrocious and abominable: the case against Conditional Cash Transfers

A version of this blog appeared in the IDS Bulletin May 2007 Volume 38 Issue 3 pages 75-78

In 1792, the first consumer boycott was organised to protest against the inhumane treatment of slaves in the production of sugar in the West Indies. In his comic novel of the time, “Melincourt”, Thomas Love Peacock wrote of the trade in sugar that it was “economically superfluous, physically pernicious, morally atrocious and politically abominable”. Much the same could be said of “Conditional Cash Transfers” (CCTs) today!

Physically pernicious

Semantically, the very label “conditional” is imprecise. The definition of what constitutes a CCT is highly ambiguous. The World Bank (which is one of the champions) define it is as follows:

"Conditional cash transfer (CCT) programs aim at reducing poverty in the short term through cash transfers while at the same time trying to encourage investments into the human capital of the next generation by making these transfers conditional upon regular school attendance or the regular use of preventive health care services."[i]

This attempts to limit CCTs to transfers that involve human capital conditionalities, such as access to health and education services. But a cash-for-work scheme is equally “conditional” – the transfer is conditional upon the provision of labour. And many other transfers may also be considered “conditional” – they depend upon a beneficiary turning up at a particular place at a particular time to collect a food ration, or they require a recipient to travel some distance to exchange a voucher for agricultural inputs in a particular retail outlet. Other transfers are conditional on “passive” characteristics of the beneficiary: being HIV-positive, owning land, being over 60 years old, being orphaned, having a disability. In reality, all social transfers are conditional on something. Even a universal fertiliser subsidy is conditional on the beneficiary buying fertiliser. And, taken to its logical extreme, a civil servant may be considered the recipient of a CCT in the sense that he or she receives a cash handout that is conditional on a work requirement … and indeed often makes the same complaints as any other public works welfare recipient: the sometimes irregular receipt of a below-market wage in exchange for a usually pointless occupation!

Politically abominable

Secondly, the term “conditional” smacks of Bretton Woods paternalism. It is redolent of the “conditionalities” imposed by IMF, World Bank and other donors when making loans or implementing budget support programmes, a perpetuation of the mindset that imposed “structural adjustment” and enforced “poverty reduction strategies”. It fails to convey the sense of partnership or inclusion that should be the basis for social protection; and it presupposes that the nanny-state knows better than its citizens how best to use their scant resources – a highly dubious assumption. A much better term, based on the concept of a mutually-agreed partnership between beneficiaries and grant-giving governments would be “compactual” (a neologism borrowed from the idea of a “social compact”, meaning “an agreement … within a society to work together for the benefit of all”[ii]).  This has the advantage of beginning with the letter “c”, thus preserving the acronym “CCT”; and clearly distinguishes such transfers from labour-based transfers, and from other types of social transfer that do not require a reciprocal obligation on the part of the beneficiary.

Economically superfluous

But CCTs are highly questionable from a practical perspective in any case. Even if we accept that there is a justification for governments “insisting” that welfare recipients fulfil certain “obligations” (like attending schools or health clinics), does it actually work to try to force them to do so? It is true that there is some evidence, for example from central and south America[iii], that school attendance and health indicators improve in households that receive CCTs … but who is to say whether this is a feature of the “conditionality” rather than of the transfer itself (or simply the fact of a predictable source of regular income)? In the case of Oportunidades in Mexico, the jury is still out:

“Oportunidades combines three key mechanisms: grants that increase the income of poor households, awareness promotion that emphasises the importance of human capital, and conditionalities that link the two – making the grants conditional on behaviours that reinforce human capital development. The evaluations have successfully demonstrated that all three of these ingredients together can generate very positive results. However, the studies so far have been unable to identify which is most important – the income, the  awareness or the conditionality.”[iv]

Another equally valid reason for observed improvements in school attendance and health indicators (in addition to the 'demand-side' effect of the cash transfer) may well be concurrent 'supply side' measures to improve access to education and health services where these are under way, either linked to CCT programmes or independently.  For example, an evaluation of PROGRESA (now Oportunidades) admits that:

"Since these increased resources related to the quality of services are part of the overall PROGRESA benefit package provided, the evaluation of the program can provide little direct evidence on whether a demand-side intervention is more effective (in terms of impact and/or in terms of cost) relative to a supply-side intervention."[v]

This uncertainty over the effectiveness of conditionality is reinforced by the fact that school attendance and health indicators also improve where cash transfers are made unconditionally: evidence from such schemes in Zambia[vi], Namibia[vii] and Malawi[viii] all show significant increases in beneficiaries’ expenditure on health and education, and in the indicators for resultant health and educational outcomes. In South Africa, where social grants are unconditional:

“extensive evaluations document the substantial impact of social grants – children (particularly girls) in households receiving grants demonstrate better weight-for-height indicators, improved nutrition, less hunger and better school attendance than children in comparable households that do not receive grants. Grant recipient households spend a greater proportion of their income on food and education, and less on alcohol, tobacco and gambling than similar households not receiving grants.”[ix]

So what is the benefit of attaching conditionality?

Again, even if such human capital conditionality were shown to work in some environments (such as in Latin America), it is highly unlikely that it would ever do so elsewhere (such as in Africa). A strong case can be made that CCTs only have a remote chance of success when certain structural conditions are met. Indeed it may be that such “supply-side conditionality” is a far more significant in delivering improved livelihood outcomes: if we want improved school and clinic attendance by the poor, then the best way would be to improve primary education and health services close to where poor people live.

For example, a recent analysis[x] by the Economic Policy Research Institute in South Africa suggested the following criteria for choosing between conditional and unconditional transfers:

Most countries in sub-Saharan Africa would fall into the “unconditional” category on every one of the five counts; and indeed there are few developing countries elsewhere in the world that could convincingly claim to meet a majority of the criteria for “conditional” transfers. In Africa, for example:

• service delivery in health and education is already overstretched;
• governments’ administrative capacity is generally weak, such that imposing conditionalities will inevitably divert precious resources from the core objectives of delivering welfare transfers on the one hand, and health and education services on the other;
• many of the poor and vulnerable find access to limited health and education services difficult and expensive (even when officially “free”): conditionalities will drain their household resources as they seek to comply, but they will receive little in return;
• because labour is abundant, and work opportunities scarce, there is little incentive for child employment, and school enrolment is already high (especially in countries where primary education is free);
• numbers in formal employment are very low – typically no more than 20% of the workforce.

Conditional schemes are much more complex to administer than unconditional schemes, and the monitoring of compliance is near-impossible in many cases. There is also the consideration that, within countries, the areas typically inhabited by the most vulnerable groups are often those where health and education services are weakest, making them wholly unsuitable to this kind of approach. Similarly, it is typically the poorest and most vulnerable who will find it most costly to comply with any conditionalities and who are therefore the most likely to be deprived of the benefits if they fail to do so – not the optimal model for a social protection programme! As the Most Reverend Desmond Tutu, Archbishop Emeritus of Cape Town, stated in 2006:

“Conditionalities attached to social transfers tend to prevent the poorest families – the very people who most desperately need income support – from accessing grants.”[xi]

Morally atrocious

Finally, leading on from this, it is morally highly questionable whether a Government (often encouraged by donors) can, on the one hand, proudly tell its citizens that social protection is their basic “human right”; and then, on the other hand, threaten to deprive the neediest among them of that very “right” if they fail to meet certain “conditions”! The “Universal Declaration of Human Rights”, signed in 1948, states that “everyone, as a member of society, has the right to social security” (Article 22), to “social protection” (Article 23), and to “security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood” (Article 25). And many governments since then have either enshrined a right to social protection in their constitutions, or have signed up to grandiose declarations such as the Livingstone “Call for Action”, agreed by thirteen African governments in 2006, which clearly accepts that “social protection is a basic human right”. Imagine substituting another such “right”, in the context of conditional cash transfers: what kind of international outcry would ensue if a government chose to deprive its citizens of water, or of shelter, or even of life, if they failed to send their children to school or attend a health clinic!

The message is clear: CCTs risk becoming the twenty-first century equivalent of the besmirched sugar trade!

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[i] World Bank website: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTSOCIALPROTECTION/EXTSAFETYNETSANDTRANSFERS/0,,contentMDK:20615138~menuPK:282766~pagePK:148956~piPK:216618~theSitePK:282761,00.html

[ii] Chambers 21st Century Dictionary.

[iii] For example the oft-cited Oportunidades and Bolsa Familia programmes in Mexico and Brazil respectively.

[iv] “Designing and Implementing Social Transfer Programmes”, EPRI, 2006.

[v]  “PROGRESA and its Impacts on the Welfare of Rural Households in Mexico, IFPRI Research Report 139, 2005

[vi] “Evaluation Report – Kalomo Social Cash Transfers Scheme”, MCDSS/GTZ, 2006.

[vii] “Social Pensions in Namibia and South Africa”, Devereux, 2001.

[viii] “After the FACT”, Devereux, Mvula & Solomon, 2006.

[ix] “Designing and Implementing Social Transfer Programmes”, Samson, van Niekerk & MacQuene, 2006.

[x] Presentation to the Third International Conditional Cash Transfers Conference, Istanbul, 2006.

[xi] “The Role of Social Transfers in Fighting Poverty and Promoting Development”. Address by Most Reverend Desmond Tutu, Archbishop Emeritus of Cape Town, to the conference “Universalism Promotes Development”, organised by the Economic Policy Research Institute, Cape Town, November 2–4, 2006.