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Employment guarantee and conditional cash transfers programs for poverty reduction

Eduardo Zepeda
Diana Alarcón


Cash transfer programs have a long history. Governments have implemented these programs to deal with adverse events affecting the capacity of groups of the population to support themselves. Examples date back to the 1500s with the successive English Poor Laws providing welfare to women, children, the elder and handicapped and work-fare to the able-bodied. These laws highlight an important distinction for the political economy of social programs. The target population, the poor in need of support, is divided in two groups. Namely, those receiving the benefit in the form of a wage for a work that has been organized with the aim of assisting them, and those receiving the benefit with no action required on the side of beneficiaries. Work programs have been frequently used to assist the poor in distress. Examples include China’s work programs of the 1920’s, India’s several famine programs dating from colonial to post independence times, and US’s New Deal programs that sought to overcome the effects of the great 1930’s depression. Dreze and Sen (1989) stress the importance of work as the counterpart to a benefit to argue that work programs are perhaps the only politically acceptable scheme to operate large scale transfer resources to those in need. Their discussion is set in the context of droughts and famines, but the argument extends to other natural and manmade shocks, including crisis.

Over the last 20 years, cash transfers have become popular in many developing countries. Building on the success of two programs, Brazil’s Bolsa Familia and Mexico’s Oportunidades, a Fieszben and Schady (2009) report the number of countries with such programs expanded from 3 in 1997 to 28 in 2008.1 These programs have introduced a number of features, among others: careful targeting, the fulfillment of a condition, typically investments in human capital, on the part of beneficiaries, and evaluation schemes. In attention on the novelty of these features, these programs are often called the new generation of cash transfers and identified as conditional cash transfers.  

A number of excellent studies have reviewed public works programs and conditional cash transfers programs. We will make no attempt to discuss further 3 the issues addressed in those studies. We will focus instead on a narrow issue: what could be the role of public works programs and conditional cash transfers in reducing long term poverty.

Publication Type(s)

Conference Paper

Ten Years of War Against Poverty Conference Papers

Conference: Ten Years of War Against Poverty


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