Paying the poor

The Economist calls it “the world’s favourite new anti-poverty device.”1 Global health donors, development agencies, and governments in developing countries praise it as a way of empowering women and investing in community development. A remarkably simple idea that took root in the late 1990s—offering poor mothers cash incentives to enrol their families in health and education programmes—is now being used in over 40 developing countries, from Mexico to Burkina Faso, Cambodia to Yemen.

Although each country’s incentive programme has its own characteristics, the basic idea is the same: impoverished mothers are paid a regular cash stipend in exchange for meeting certain predetermined conditions, or “coresponsibilities” as they are often called in Latin America. Typically, these conditions include attending regular medical check-ups and ensuring that children go to school. In most countries, parents must also attend educational seminars on topics such as nutrition, hygiene, and money management. Advocates believe that that these cash rewards, known as “conditional cash transfers,” will get transformed over the long run into improved maternal and child health and economic development.

But against this backdrop of intense fervour for cash rewards, a series of missteps and crises led Guatemala to recently suspend its conditional cash transfer programme, called Mi Familia Progresa (My Family Makes Progress) or MIFAPRO. The suspension takes the shine off the reputation of cash transfers as a silver bullet and serves as a cautionary tale for donors and developing countries that are currently planning similar programmes.