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A common criticism of antipoverty programmes is that a large proportion of their budgets never reaches the intended beneficiaries but is absorbed by administration costs. Yet, there is little empirical evidence on the costs, and even less on the cost structures, of such programmes. This paper outlines and implements a replicable methodology for a disaggregated cost analysis of a pilot conditional cash transfer programme in Nicaragua, examining the administration and private costs associated with a one-unit transfer to a beneficiary-referred to as the cost-transfer ratio. We find that for a meaningful assessment of cost efficiency, it is misleading to make calculations using only the typically available raw accounting data. Rather, one must delve into the details and specific activities of the programme. This is particularly important for pilot programmes, which typically have many upfront fixed costs associated with design and setting up operations. It is also important for conditional cash transfer programmes, which have additional costs associated with their specific design features and require changes in beneficiary behaviour that may engender substantial private costs. Copyright © 2005 John Wiley & Sons, Ltd.
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Journal of International Development
J. Int. Dev. 17, 151–168 (2005)
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/jid.1142
THE COST OF CONDITIONAL CASH
TRANSFERS
NATA
`LIA CALDE
´S
1
and JOHN A. MALUCCIO
2
*
1
Agricultural and Applied Economics Department, ETSIA-Universidad Polite
´cnica de Madrid,
Spain
2
Food Consumption and Nutrition Division, International Food Policy Research Institute,
Washington, DC, USA
Abstract: A common criticism of antipoverty programmes is that a large proportion of their
budgets never reaches the intended beneficiaries but is absorbed by administration costs. Yet,
there is little empirical evidence on the costs, and even less on the cost structures, of such
programmes. This paper outlines and implements a replicable methodology for a disaggre-
gated cost analysis of a pilot conditional cash transfer programme in Nicaragua, examining
the administration and private costs associated with a one-unit transfer to a beneficiary
referred to as the cost–transfer ratio. We find that for a meaningful assessment of cost
efficiency, it is misleading to make calculations using only the typically available raw
accounting data. Rather, one must delve into the details and specific activities of the
programme. This is particularly important for pilot programmes, which typically have
many upfront fixed costs associated with design and setting up operations. It is also important
for conditional cash transfer programmes, which have additional costs associated with their
specific design features and require changes in beneficiary behaviour that may engender
substantial private costs. Copyright #2005 John Wiley & Sons, Ltd.
1 INTRODUCTION
It is widely recognized that social safety net programmes have a crucial role to play both in
alleviating poverty and in promoting social and economic development. Nevertheless, a
common criticism of such programmes is that a large proportion of their budgets never
reaches the intended beneficiaries but is absorbed by administration costs (Grosh, 1994).
Depending on how such administrative resources are used, the poverty alleviation effect of
the programmes may be reduced, and, consequently, their overall cost effectiveness.
Careful assessments of these concerns are difficult, as there is little empirical evidence
on the costs, and even less on the cost structures, of social safety net programmes in
Copyright #2005 John Wiley & Sons, Ltd.
*Correspondence to: John A. Maluccio, Food Consumption and Nutrition Division, International Food Policy
Research Institute, 2033 K Street NW, Washington, DC 20006-1002, USA. E-mail: j.maluccio@cgiar.org
developing countries (Newman et al., 1994; Coady et al., 2002). This paper begins to fill
this gap by describing and implementing a replicable methodology for disaggregated cost
analysis. We assess the cost efficiency of a pilot conditional cash transfer programme, the
Nicaraguan Red de Proteccio
´n Social (RPS), by examining the administration and private
costs associated with a one-unit transfer to a beneficiary. Following Coady et al. (2004),
we refer to this as the cost–transfer ratio or CTR.
1
While focusing on the CTR would be sufficient to evaluate a programme whose sole
objective was to disburse transfers, RPS has more ambitious goals, such as human capital
development, and specific design features to achieve them. In particular, transfers are
targeted to poor areas and to poor households within those areas. Further, transfers are
conditioned on households investing in the health and education of their children,
behaviours monitored by the programme. These programme features require resources,
introducing a potential tradeoff between reducing programme costs and promoting
programme objectives. In this analysis, then, we explore not only how much is spent in
total on administration, but also how those administrative resources are used, since both
aspects of the cost structure influence programme effectiveness. The conditionality of RPS
has a second implication for cost analysis: beneficiaries may need to alter behaviour to
comply with programme requirements. Therefore, in addition to administration costs, we
incorporate the necessary, and potentially substantial, private costs beneficiaries may incur
to take up the programme.
Given RPS’s design and multiple objectives, particularly improved human capital for
children that is likely to yield returns over many years, we caution that it would be
incorrect to interpret the CTR either as a measure of overall cost effectiveness of the
programme or as a cost–benefit ratio. We interpret the CTR only as a measure of cost
efficiency.
2 DESIGN AND IMPLEMENTATION OF THE RED DE PROTECCIO
´N SOCIAL
2
To analyse the cost structure of RPS, it is first necessary to describe the programme’s
operation and evolution. Modelled after the Programa Nacional de Educacio
´n, Salud y
Alimentacio
´n(PROGRESA) in Mexico (Skoufias, 2003), RPS is designed to address both
current and future poverty via conditional cash transfers targeted to households living in
extreme poverty in rural Nicaragua. RPS’s specific objectives include:
*supplementing household income for up to three years to increase expenditures on food;
*increasing the healthcare and nutritional status of children under age 5; and
*reducing school desertion during the first four years of primary school.
RPS was designed to be implemented in two phases over five years. Starting in 2000, the
pilot phase, or Phase I, was for three years with a budget of $11 million, approximately 0.2
per cent of GDP and 2 per cent of annual recurring government spending on health and
education (World Bank, 2001).
1
Even ignoring private costs, the CTR is not equivalent to the percentage of the total budget absorbed by
administrative costs, which is by definition always smaller; therefore one cannot make direct comparisons
between the CTR and that frequently reported measure of costs.
2
This section draws from Maluccio and Flores (2004) where additional details and programme impacts can be
found.
152 N. Calde
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2.1 Programme Targeting
For the pilot, RPS chose rural areas in six municipalities from two departments in the
northern part of the Central Region of Nicaragua. Areas were chosen on the basis of
poverty as well as on their capacity to implement the programme. The focus on rural areas
reflects the distribution of poverty in Nicaragua: of the 48 per cent of Nicaraguans
designated as poor in 1998, 75 per cent resides in rural areas (World Bank, 2001). In 1998,
approximately 80 per cent of the rural population in the selected municipalities was poor,
and half of those extremely poor (IFPRI, 2002). These areas also had relatively strong
institutional capacity and local coordination, good school coverage, and were less than a
one-day drive from the central RPS office in Managua (Arcia, 1999).
In the next stage of geographic targeting, a marginality index based on information from
the 1995 National Population and Housing Census was constructed and an index score
calculated for all 59 rural comarcas
3
in the selected municipalities. The index was a
weighted average of a set of comarca-level average poverty indicators: family size, access
to potable water, access to latrines, and the literacy rate (Arcia, 1999). The 42 comarcas
with the worst index scores were chosen for the pilot phase’s first stage, described below.
For the impact evaluation, one-half of the 42 comarcas were randomly selected as
intervention comarcas, leaving the remaining 21 for the control group (Maluccio and
Flores, 2004).
The pilot phase was implemented in two stages. In the first stage, RPS benefited nearly
all of the approximately 6000 households in the 21 intervention comarcas described
above. In the second stage, approximately 4000 additional beneficiary households from
the remaining 17 non-control comarcas in these same municipalities were selected via
household-level targeting mechanisms. Using the 1998 Nicaraguan Living Standards
Measurement Survey (LSMS), a proxy means model predicting logarithmic per capita
expenditures was estimated for the rural Central Region based on easily measured
household characteristics.
4
The explanatory variables for this model were then included
in the RPS census survey questionnaires implemented before the programme began. In
comarcas with household-level targeting, only those households with predicted per capita
expenditures below the national poverty line were selected as beneficiaries. About 20
per cent of all households in the 17 second-stage comarcas were excluded (IFPRI, 2002).
2.2 Programme Design
RPS had two main components:
Food security, health, and nutrition. Each eligible household received a bimonthly cash
transfer known as the ‘food security transfer’, contingent upon attendance at bimonthly
health educational workshops held within the community and on bringing their children
under age 5 for scheduled preventive healthcare appointments. The specific healthcare
services required by the programme were provided free of charge to beneficiary house-
holds and included growth monitoring, vaccination and provision of antiparasites,
3
Comarcas are national census administrative areas within municipalities that include between one and five small
communities averaging 100 households each.
4
These included household size, age of household head, education of household members, housing characteristics
(including number of rooms; tenure status; and type of toilet, floor, roof, and lighting), assets, and type of work.
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vitamins and iron supplements. Children under age 2 were seen monthly; those ages 2–5
were seen bimonthly.
Education. Each eligible household also received a bimonthly cash transfer known as
the ‘school attendance transfer’, contingent on enrolment and regular school attendance of
children ages 7–13 who had not completed 4th grade. Additionally, for each eligible child,
the household received an annual cash transfer intended for school supplies (including
uniforms and shoes), known as the ‘school supplies transfer’ and contingent only on
enrolment. Unlike the school attendance transfer, which was a fixed amount per household
regardless of the number of children in school, the school supplies transfer was a per-child
transfer. To provide incentives to the teachers (who had additional reporting duties and
were likely to have larger classes after the introduction of RPS) and to increase resources
available to the schools, there was also a small cash transfer, known as the ‘teacher
transfer’. The delivery of the funds to the teacher was monitored (and was a programme
condition), but not their ultimate use.
Table 1 summarizes the eligibility requirements and demand- and supply-side benefits
of RPS. In comarcas where there was only geographic targeting, nearly all households
were eligible for the food security transfer, which was a fixed amount per household.
Households with school age children were also eligible for the education transfers. In
comarcas with household targeting, only households selected via the proxy means model
described above were included.
Table 1 also shows the year 2000 U.S. dollar annual transfers and their Nicaraguan
co
´rdoba (C$) equivalents: the food security transfer was $224 a year; the school
attendance transfer was $112. By itself, the food security transfer represented about 13
Table 1. RPS eligibility and benefits
Programme components
Food security, health, Education
and nutrition
Eligibility
Geographic targeting All households All households with children ages 7–13
who have not yet completed fourth grade
of primary school
Household targeting Households with predicted Selected households with children
expenditures below poverty line ages 7–13 who have not yet completed
fourth grade of primary school
Demand-side benefits
Monetary transfers Food security transfer C$2880 School attendance transfer C$1440
per household per year ($224) per household per year ($112)
School supplies transfer C$275 per child
beginning of school year ($21)
Supply-side benefits
Services provided and Bimonthly health education workshops
monetary transfers
Child growth and monitoring
-Monthly (0–2 year olds) Teacher transfer
-Bimonthly (2–5 year olds) C$60 per child per year given to teacher/
school ($5)
Provision of antiparasites,
vitamins, and iron supplements
Vaccinations (0–5 year olds)
154 N. Calde
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per cent of average total annual household expenditures in beneficiary households before
the programme. Households with children benefiting from the education component
received an additional transfer of 8 per cent. Over the two years, the overall average
monetary transfer (excluding the teacher transfer) was approximately $300, or 18 per cent
of total annual household expenditures. The value of the supply-side services, as measured
by how much RPS paid to the providers, was also substantial. On an annual basis, the
education workshops cost approximately $50 per beneficiary household; the health
services for children under age 5 cost $100 per beneficiary child.
To enforce compliance with programme requirements, beneficiaries did not receive the
food or education component of the transfer if they failed to carry out any of the conditions.
The monitoring was done via a management information system (MIS) designed by RPS. It
comprised a continuously updated relational database of beneficiaries, healthcare providers,
and schools. The MIS was also used to (i) select beneficiaries and invite them to programme
incorporation assemblies, (ii) calculate transfer amounts, (iii) determine requests to the
Ministry of Health for vaccines and other materials, and (iv) monitor whether beneficiaries
and service providers were meeting their responsibilities. Decision rules capturing the
programme requirements were programmemed directly into the MIS. Substantial effort was
dedicated to designing data forms for the various programme participants that fed into this
system, including household census, school, and healthcare provider forms.
RPS strictly monitored conditionality and enforced programme rules. During the first two
years, approximately 10 per cent of beneficiaries were penalized at least once and therefore
did not receive one or both transfers. It was also possible for households to be expelled from
the programme for repeated infractions. Only 1 per cent of households, however, were
expelled from the programme during the first two years, though 5 per cent voluntarily left
the programme, e.g., by dropping out or migrating out of the programme area.
Although centrally administered, with its multisectoral approach across education,
health, and nutrition, RPS required bureaucratic co-operation at the national, municipal
and community levels. Committees composed of delegates from the health and education
ministries, representatives from civil society and RPS personnel co-ordinated activities at
the municipal level. At the comarca level, RPS representatives worked with local
volunteer representatives known as promotoras (beneficiary women chosen by the
community) and local school and healthcare service providers. The promotoras were
charged with keeping beneficiary household representatives (95 per cent of whom are
women) informed about upcoming healthcare appointments for their children, upcoming
transfers and any failures to fulfil conditions.
3 THEORETICAL FRAMEWORK AND EMPIRICAL METHODOLOGY
In this section we present a simple welfare model, first presented in Calde
´set al. (2004),
that characterizes how we think about the welfare impacts of RPS. This framework also
underlies our approach to assessing cost efficiency using the CTR. We then outline the
methodology we use to calculate the CTRs.
3.1 Theoretical Framework
Consider a programme that transfers resources to households using both cash transfers and
in-kind transfers in the form of increased expenditures on human capital services, such as
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schooling. Maximized utility for household his given by an indirect utility function,
Vh(mh,E;q), which is a function of the cash transfer received from the programme, mh, the
increased expenditures on human capital services, E, and a vector of commodity and factor
prices, q. For expositional convenience, we assume that initial transfers and expenditures
are zero (e.g., before the programme begins), so that dmh¼mhand dE¼E.
We characterize social welfare with a standard Bergson–Samuelson welfare function,
W(.), defined over all households. The welfare effect of the programme is derived by
differentiating W(.) with respect to cash transfers and in-kind expenditures. Holding prices
constant, this yields
dW¼X
h
@W
@Vh
@Vh
@mhmhþX
h
@W
@Vh
@Vh
@EE
which can be rewritten as
dW¼X
h
hmhþX
h
hWTPhE;
where his defined as the social value of additional lump-sum income to household h(the
so called welfare weight, which is typically larger for poorer households), mhis the lump-
sum income given to the household by the programme, WTPhis the household’s
willingness to pay for one additional unit of programme expenditures on human capital
services, and Eis the total expenditure by the programme on these services. The total
welfare impact of the programme is thus the sum of the social valuation of cash and in-
kind transfers. This valuation depends on how many of these benefits accrue to poor
households as well as on the effectiveness of in-kind transfers.
Dividing each term by total cash transfers ðT¼hmhÞand the sum of households’
willingness to pay ðWTP ¼hWTPhÞ, and assuming for expositional convenience that the
share of each household’s cash transfers in the total cash transfers is the same as the share
of each household in the aggregate willingness to pay, we have
dW¼ðTþWTP EÞ;
where can be interpreted as capturing the progressiveness of transfers. The total cost to
the government of providing benefits (B) is made up of the sum of cash transfers (T), total
in-kind expenditures (E), and total programme administration costs (C). Multiplying and
dividing by B, we can rewrite the total welfare impact of the programme as
dW¼ðTþWTP EÞ
TþEþCB
which is the welfare impact per unit of programme expenditure (i.e., the benefit–cost ratio)
multiplied by B, the size of the programme. A full cost–benefit analysis of the programme
would require an assessment of both the targeting effectiveness of the programme (as
captured by ) as well as the benefits arising from in-kind expenditures (as captured by
WTP).
To focus on cost efficiency, we make two further simplifying assumptions. First, we set
¼1, which is equivalent to setting welfare weights to ¼f1;0gfor {poor, non-poor}
156 N. Calde
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households and assuming that all transfers accrue to poor households, i.e., perfect
targeting. Second, we value in-kind expenditures at cost, i.e., the total willingness to
pay across households for an extra dollar of in-kind expenditures is exactly one dollar, so
that the total welfare impact of the programme is given by the sum of cash and in-kind
transfers. Under these assumptions the cost–benefit ratio can be written as
B
dW¼TþEþC
TþE¼1þC
TþE¼1þCTR
where CTR is the cost–transfer ratio defined earlier, i.e., the ratio of non-transfer
programme costs to total programme transfers.
To this point, we have ignored the effects that conditionality may have on households, in
particular, the likely private costs necessary for programme participation. A simple way to
incorporate these into the above framework is to include them in the costs of the programme,
replacing C with C* ¼CþP, where P are the private costs induced by the programme. If the
private costs are positive, then, the CTR including private costs will be higher.
The CTR as developed here ignores programme effectiveness. Hence, we refer to it as a
‘cost–efficiency ratio’. Since some components of programme non-transfer costs (C) can
affect the overall cost effectiveness of the programme, it is not necessarily desirable to
simply minimize this ratio but rather to minimize it for a given level of welfare
improvement. For example, programme expenses arising from implementing targeting
may yield returns in terms of improved targeting effectiveness (higher ), but while the
costs will be included in the CTR as developed here, the benefits will not.
3.2 Empirical Methodology
We now turn to the empirical methodology for calculating the CTR, considering what to
include as costs and how to measure them, and what to include as transfers and how to
measure them.
The first step is the delineation of programme activities (Coady et al., 2004; Fiedler,
2003). To the extent possible, we categorize programme activities depending on whether
they correspond to fixed or variable costs for the programme, and in a manner to facilitate
comparison with related programmes. This approach has the advantage of making them
both managerially and policy relevant (Fiedler, 2003). It allows us to approximate the cost
structure of a mature programme that would not have the upfront activities undertaken
during the pilot. It also allows us to assess hypothetical alternative programmes that do not
include all the activities of the actual programme. For example, we explore how the costs
would differ if there were no effort to verify that households are carrying out their
responsibilities.
The primary source of information for the programme costs is typically the program-
me’s accounting system. For a given time period—in this case the pilot phase of RPS
we first examine the programme’s detailed accounting records. For programmes spanning
a number of years, adjustments to account for inflation and depreciation of capital
investments can be made. Given the relatively short, three-year pilot phase of RPS, low
levels of capital investment, and an inflation rate of about 4 per cent per year, we do not
make these adjustments in the analyses presented below; doing so does not change our
substantive findings.
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This accounting-based approach was possible because RPS operated autonomously, and
the majority of programme-related activities were carried out directly within the project
and were therefore under its accounting system. This is not always possible, however. For
example, Fiedler (2003), in a cost analysis of a Honduran community-based integrated
childcare programme that did not have a centralized accounting system, had to construct
total programme costs from the bottom up, estimating the costs required for each activity
and then aggregating them.
The next step is associating programme accounting costs with programme activities.
First, where possible, we directly assign line-item accounting costs to activities. Some
accounting line-item costs can be allocated directly to certain activities without ambiguity.
For example, the cost of collecting the baseline evaluation survey can be allocated directly
to the evaluation activity or the fees paid to firms delivering the monetary transfers to the
benefit delivery activity. We refer to these as ‘directly assignable costs’. About 25 per cent
of total costs can be assigned in this fashion. For many other costs, such as salaries of
management personnel, direct assignment is not possible because they cut across
programme activities. The remaining unassigned costs are allocated to programme
activities using a time-allocation matrix, described in detail below. By multiplying the
total of all unassigned costs by the time-allocation matrix percentages, we can distribute
these shared costs across programme activities (Coady et al., 2004). We refer to these as
‘indirectly assignable costs’.
The key assumptions underlying this methodology for assigning costs are:
*the average wage of individuals in each activity is the same (true if there were an
identical mix of personnel of different skill and salary levels working in each activity);
and
*the average use of other inputs is the same in each activity (e.g., computer time,
transportation, furniture, and other overhead) (Coady et al., 2004).
While in practice it might be that some activities are more intensive in high-wage
personnel or other inputs than others, there is no reason to think this would severely bias
our results, as all the broad activities involve personnel and materials ranging across the
wage spectrum.
After distributing all current costs among programme activities, we turn to the current
benefits of the programme as measured by the transfers. For cash transfers, valuing the
transfers is straightforward and only required minor adjustments to the aggregate
accounting categories, such as taking out fees paid to the firms delivering the cash.
For in-kind service transfers, however, it is more complicated. As an approximation, we
take the current monetary value of these services, that is, how much they cost RPS to
deliver. This implicitly equates the value of a unit of transfer to households regardless of
whether it is given directly to the household in cash or indirectly via health and
education services. While this may be more or less than the beneficiaries’ willingness to
pay for the services, since most of the providers are NGOs, it is reasonable to assume
that their fees approximate the actual cost of those services and do not include
substantial profits.
When measuring costs and transfers, we only consider current costs and transfers that
are incremental as a result of the programme. We do not attempt to assess future benefits or
future costs due to the programme, or to include them in the calculation of the CTR. While
there are some straightforward methodologies to approximate the value of improved
education outcomes (Morley and Coady, 2003; Knowles and Behrman, 2003), there are
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few parallel methodologies for improvements in nutritional status and health, not to
mention other possible benefits of the programme, such as women’s empowerment. For
this reason and the others mentioned above, what follows cannot be considered a cost–
benefit analysis. Nevertheless, we believe this approach has the advantage of being
conservative, since the resulting estimates of the CTR are likely to be larger than the true
cost–benefit ratio. It is easy to envision future benefits (e.g., due to higher human capital
for programme beneficiaries which in other contexts have been substantial), but more
difficult to envision future costs accruing.
Finally, it is important to emphasize that we are analysing RPS in its pilot phaseand
the results must be interpreted with this in mind. The intensity of certain activities
undertaken during a pilot phase differs from that of an established programme, with
consequent implications for the cost analysis. For example, a large part of the work during
the pilot included refinements in design and completion of startup activities for operations.
Similarly, during the pilot, substantial resources were devoted to training personnel.
Moreover, the criteria for selection of programme areas may have been different had it
been a full-blown programme. It is possible that the selected municipalities had atypical
capacity to carry out RPSother municipalities may have less capacity, which would lead
to additional costs. While we make several adjustments to remove the effects of these
pilot-specific features of RPS, we do not claim to have removed every single potential
source of bias.
4 RPS PROGRAMME ACTIVITIES, COSTS AND CTRS
By highlighting and considering the above dimensions for costs and transfers, we ensure a
comprehensive analysis that guards against missing important resource allocations made
by, or in response to, the programme. We first examine current programme costs and
transfers, for which we have the most accurate information; we then explore how inclusion
of current private costs affects the results.
4.1 Programme Activities and Time-Allocation Matrix
The first step in identifying the main programme activities was, in conjunction with RPS
staff, to construct a detailed timeline of all the activities undertaken during the pilot phase.
This yielded monthly percentages of the time devoted to each specific activity.
5
The next
step was to categorize them into more ‘aggregate’ programme activities, as shown in
Table 2. While any such categorization is subjective, there were some fairly obvious,
broadly defined activities in RPS common to most social safety net programmes such as
programme design and benefit delivery. Other RPS activities were common to conditional
cash transfer programmes, such as beneficiary identification and incorporation, and
conditionality. We assigned each specific programme activity to a single aggregate activity
and then calculated the total average annual time allocated by staff for each aggregate
programme activity to construct the time-allocation matrix. Although this methodology is
best treated as approximate, it does appear to identify broad trends and patterns.
We rst examine the overall averages in the final column. Fully one-quarter of office
time was devoted to general programme design, for both the pilot phase itself, and for
5
These activity lists and respective percentages are available (in Spanish) upon request from the authors.
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Phase II, begun in 2003. This is a natural consequence of being a pilot— despite careful
advance planning there are always details to work out as a programme converts plans into
action. Another one-fourth of the time was devoted to implementing the supply-side of the
programme: RPS contracted, trained and directly paid private providers to deliver the
health services, co-ordinating activities between them and the Ministry of Health. In
addition, these providers assisted in programme monitoring by reporting beneficiary
attendance (and the healthcare data from the visit including weight and any vaccines or
supplements given). Of course, internalizing the health service delivery costs in the
programme had implications for the programme activities and budget. Lastly, during the
pilot just over 10 per cent of time was spent on each of the following activities:
institutional strengthening (activities such as hiring and training staff), beneficiary
incorporation (planning and carrying out incorporation meetings in which the program-
me’s goals and the rights and responsibilities of beneficiaries were explained), and
external evaluation. These percentages change little if we instead calculate a weighted
average of time allocation using as weights the (growing) number of people in the office in
each year (bottom panel of Table 2).
The evolution of the time-shares during the three years of the pilot demonstrates how
some activities represent upfront or fixed investments while others represent ongoing
activities. Programme design of the pilot phase declined substantially, from 27 per cent in
2000 to 6 per cent in 2002. Offsetting this decline, however, was increased effort in
designing (and lobbying for) Phase II. The combined effect was that the total share
Table 2. RPS activities, time allocation, and staff
2000
a
2001 2002 Average
b
By activity (percent of total time)
General programme design 27.2 21.9 24.7 24.7
–Pilot phase 27.1 9.6 5.9 14.8
–Phase II 0.1 12.3 18.8 9.9
Institutional strengthening 14.4 9.8 6.9 10.6
Beneficiary identification 7.5 9.4 1.3 6.2
Beneficiary incorporation 14.5 10.0 7.9 11.0
–Expansion 14.2 6.5 0.2 7.4
–Maintenance 0.3 3.5 7.7 3.6
Benefit delivery: demand-side transfers 2.9 2.5 1.8 2.4
–Expansion 1.4 0.8 0.0 0.7
–Maintenance 1.5 1.7 1.8 1.7
Conditionality/certification of requirements 0.0 2.8 9.2 3.8
Benefit delivery: supply-side services 16.9 30.4 28.2 24.7
–Expansion 16.9 15.8 4.2 12.5
–Maintenance 0.0 14.6 24.0 12.2
Monitoring/evaluation of supply-side services 0.0 0.3 9.2 3.0
External evaluation of the programme 16.6 12.9 10.8 13.6
100.0 100.0 100.0 100.0
Average full-time staff 46 58 62 55
–Central office (Managua) 34 46 50 43
–Regional offices 12 12 12 12
Source: Calculations by authors based on list of activities and time allocation provided by RPS.
a
Year 2000 includes weighted average activity time-shares for the first two months of the programme in 1999;
this period was dedicated almost entirely to programme design and institutional strengthening activities.
b
The overall average includes the weighted average activity time-shares for the first two months of the
programme in 1999 and thus is not the simple average of the columns appearing in the table.
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dedicated to design activities was largely unchanged over the three years. Unsurprisingly,
the next two activities, institutional strengthening and beneficiary identification, declined
in intensity as the programme matured. The beneficiary identification census was carried
out in 2000 and 2001, but having achieved the pilot phase target of reaching 10 000
beneficiaries, very little activity of this sort was necessary in 2002.
Time spent incorporating new beneficiaries also declined, though related activities
remained an important part of the overall time allocation in 2002. We have separated
incorporation activities into two types: expansion activities necessary for expansion into
new programme areas (e.g., carrying out the assemblies) and maintenance activities
necessary for day-to-day incorporation of new beneficiaries in existing programme areas
(e.g., due to changes in family composition). While the former decreased over time, the
latter increased as the beneficiary base grew. In similar fashion, we separated the activities
dedicated to demand-side transfer delivery into expansion and maintenance subcategories.
Overall, this activity was declining in intensity over time, though the ongoing maintenance
component remained roughly constant at 2 per cent.
Activities related to monitoring compliance with programme conditionality grew in
intensity along with the number of beneficiaries. As the healthcare services came on line,
delivery of supply-side services was much more time intensive in 2001 than in 2000. Over
time, expansion-related activities within this category, such as the diagnostic interview
needed to integrate each child into the MIS, diminished in importance, while maintenance
activities increased. Monitoring of supply-side services also increased substantially over
the period; the large increase in 2002 was due to an intensification of monitoring,
including random spot-checks of private providers. Finally, the time devoted to evaluation
declined steadily over the three years.
4.2 Programme Costs and Cost Shares
RPS accounting records were the principal source of information from which we
identified programme (administration) costs and benefits (the monetary transfers and
value of services provided). Table 3 presents the annual programme accounting costs and
transfers for the pilot phase, before making any adjustments. Programme costs rose
gradually over the three years, while programme transfers rose steeply as both the number
of beneficiaries, and the number of transfers made per year, increased. As designed, a
normal year of demand-side operations in RPS includes six bimonthly transfers to
households. In 2000, however, because the programme was just beginning, only two
transfers took place in the latter part of the year. In 2001 and 2002, which can be
considered more operationally normal, 5 of the scheduled 6 transfers were made.
Similarly for payments to healthcare providers, in 2001 only 2 of 12 planned payments
were made, as the services only got underway in mid-2001. However, in 2002, 11 of 12
payments were made. These shortfalls in planned transfers suggest an upward bias in the
estimated CTRs we present below of between 10 and 15 per cent in 2001 and 2002,
compared with the potential. Table 3 also shows that most equipment costs (e.g.,
computers, office furniture, etc.) were made in the first year. Long-term consultant costs
declined in the third year as the design phase was completed, though this was more than
offset by an increase in operating costs. Finally, even though the evaluation-related
‘service flows’ were evenly spread out during the three years, evaluation costs increased
over time, reflecting the payment schedule.
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At this point, we present our first crude estimates of the CTR (bottom row of Table 3).
The interpretation is that this is what it cost to deliver one unit of transfers to a beneficiary,
given all the previously mentioned features of the programme. For the pilot as a whole, the
ratio was 0.629— but this overall average masks a sharp decline over time. Since transfers
only started at the end of 2000 and the programme was undertaking a lot of its initial fixed
investment, it is no surprise that the CTR for 2000 is quite high (2.5). In the latter two
years, it declined substantially to less than 0.5 reflecting the declining importance of
fixed costs (such as programme design) and the increasing transfers. If we stopped the
analysis here, we would conclude that an ongoing programme requires approximately
50 cents in administration costs for every dollar of current benefit delivered. This
conclusion would be premature, however, as it fails to account for any one-time fixed
costs, particularly those associated with programme design.
Table 4 presents the disaggregated programme cost shares across programme activities
for all three years, after programme costs in Table 3 have been allocated to the activities
first shown in Table 2. For each activity we have added the directly and indirectly assigned
costs (described in Section 3.2). Since 75 per cent of the costs are indirectly assigned, the
broad patterns seen in the time-allocation matrix are replicated here, though some of the
cost shares do differ from the time-shares. Whereas approximately 25 per cent of the time
was allocated to programme design and supply-side benefit delivery, only 20 per cent of
the administration costs is allocated to each of these activities, since they were relatively
time-intensive, as opposed to resource-intensive. The reverse is true for the evaluation
expenses, which were 22 per cent of the total administration costs, in part due to the
Table 3. RPS accounting costs and transfers ($)
2000
a
2001 2002 Total
Programme administration costs
Long-term consultant and staff salaries 354 875 441 956 351 976 1 148 807
Operating costs 225 340 239 641 482 732 947 713
Equipment 202 262 35 256 52 751 290 269
Training and technical assistance 125 969 197 935 166 224 490 128
Food security transfer delivery 13 108 70 554 40 276 123 938
Education transfer delivery fees 3384 30 358 23 254 56 996
Incorporation assemblies 20 948 14 655 0 35 603
Targeting 103 533 74 940 0 178 473
External evaluation 86 928 178 310 314 886 580 124
Auditing 0 6950 16 050 23 000
Financial costs 13 000 57 000 44 000 114 000
Total programme administration costs 1 149 347 1 347 555 1 492 149 3 989 051
Programme transfers
Total demand-side transfers 442 966 2 314 632 2 232 654 4 990 252
Food security, health, nutrition 356 958 1 626 706 1 543 765 3 527 429
Education 86 008 687 926 688 889 1 462 823
Total supply-side transfers 9046 386 674 959 995 1 355 715
Food security, health, nutrition 1767 349 514 923 537 1 274 818
Education 7279 37 160 36 458 80 897
Total transfers 452 012 2 701 306 3 192 649 6 345 967
Cost–transfer ratio
Total costs/demand þsupply transfers 2.543 0.499 0.467 0.629
Source: RPS accounting records from February 2003.
a
Year 2000 includes 1999 expenses ($38 484 in total, $27 720 in consultants, and $10764 in operating costs).
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expense of carrying out three large household surveys. The cost share for implementing
the demand-side transfers declines over time, suggesting that learning-by-doing led to an
increase in efficiency in that activity as the number of beneficiaries increased.
4.3 Programme CTRs
Table 5 presents CTRs by programme activity. Rather than discuss them one by one for
each activity, which would largely mimic the above descriptions for the time-allocation
matrix and cost shares, we explore how they might vary for different programme types—
making adjustments by sequentially removing fixed costs not associated with pilot
operations, fixed costs associated with pilot operations, and fixed costs associated with
expansionto arrive at estimates of the CTR for continued programme operation. In the
first row of the second panel of Table 5, we reproduce the aggregate CTR before any
adjustments (from Table 3).
In the second row, we consider how the ratio changes when we remove the fixed costs
related to Phase II and external evaluations. We treat these as fixed costs not related to the
pilot phase, because they primarily informed the design of Phase II. Removing these costs
substantially reduces the estimated CTRs and yields a programme to-date average CTR of
0.437 and a final year ratio of 0.265, following a steep decline from the first year and a
more gradual one from 2001.
In the third row of the second panel of Table 5, we remove all the remaining fixed costs
associated with programme design of the pilot phase, further reducing the programme to-
date average (0.376) and individual year figures. The decline over time reflects the relative
Table 4. RPS activity cost shares
2000
a
2001 2002 Total
By activity (percent of total costs)
General programme design 19.8 15.9 18.4 18.0
–Pilot phase 19.6 7.0 4.4 9.7
–Phase II 0.2 8.9 14.0 8.3
Institutional strengthening 9.1 7.1 5.2 7.0
Beneficiary identification 20.1 16.1 1.0 11.6
Beneficiary incorporation 14.8 8.4 6.0 9.3
–Expansion 14.6 5.9 0.2 6.2
–Maintenance 0.2 2.5 5.8 3.1
Benefit delivery: demand-side transfers 4.0 9.3 5.6 6.3
–Expansion 1.2 0.6 0.0 0.5
–Maintenance 2.8 8.7 5.6 5.8
Conditionality/certification of requirements 0.0 2.0 6.8 3.3
Benefit delivery: supply-side services 15.1 22.1 21.0 19.7
–Expansion 15.1 11.5 3.1 9.4
–Maintenance 0.0 10.6 17.9 10.3
Monitoring/evaluation of supply-side services 0.0 0.2 6.8 2.6
External evaluation of the programme 17.1 18.9 29.2 22.2
100.0 100.0 100.0 100.0
Total programme administration costs ($) 1 149 347 1 347 555 1 492 149 3 989 051
Source: Calculations by the authors using Tables 2 and 3 and methodology described in the text.
a
Year 2000 includes the costs and activities for the first two months of the programme in 1999.
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importance of fixed (design) costs at the outset and how these diminish with programme
maturity. These estimates approximate the costs for an expansion of the programme, in its
current form, to different areas, since they continue to include the one-time expansion
activities associated with incorporation of new beneficiaries and benefit delivery.
Next, we remove the beneficiary identification activity and all the expansion tasks. This
approximates the expected ratio for programme continuation in 2003 if RPS were only
continuing to serve the same beneficiaries in the same areas at current levels of efficiency.
Now the programme to-date average is 0.202, less than half the CTR when fixed costs
related to the pilot are included.
To this point, we have adopted a relatively conservative approach to assessing the cost-
efficiency of RPS opting, where possible, toward ‘overestimates’ of the ratio. In the final
row in the second panel, we relax this conservative approach and consider the cost
efficiency without those activities related to institutional strengthening. While it would be
inappropriate to assume that institutional strengthening activities would completely
disappear in an ongoing programme, it is also unlikely that they would continue at the
levels seen in the first three years of operation; indeed, they declined substantially over that
period. Thus, we can treat the last column of the final two rows in the second panel as
representing ‘bounds’ for our estimate of the long-run CTR for programme continuation of
the mature programme in its current form. Taking into account all of the potential biases
described above, in particular the failure to make all six scheduled transfers in either 2001
Table 5. RPS cost–transfer ratios (CTRs)
2000
a
2001 2002 Total
By activity
General programme design 0.501 0.080 0.086 0.113
–Pilot phase 0.497 0.035 0.020 0.061
–Phase II 0.004 0.045 0.066 0.052
Institutional strengthening 0.232 0.035 0.024 0.044
Beneficiary identification 0.511 0.080 0.005 0.073
Beneficiary incorporation 0.377 0.042 0.028 0.058
–Expansion 0.371 0.029 0.001 0.039
–Maintenance 0.006 0.013 0.027 0.019
Benefit delivery: demand-side transfers 0.102 0.047 0.026 0.040
–Expansion 0.031 0.003 0.000 0.003
–Maintenance 0.071 0.044 0.026 0.037
Conditionality/certification of requirements 0.000 0.010 0.032 0.020
Benefit delivery: supply-side services 0.384 0.110 0.098 0.124
–Expansion 0.384 0.057 0.014 0.059
–Maintenance 0.000 0.053 0.084 0.065
Monitoring/evaluation of supply-side services 0.000 0.001 0.032 0.017
External evaluation of the programme 0.436 0.094 0.136 0.140
Overall
Aggregate 2.543 0.499 0.467 0.629
–Phase II design and evaluation 2.103 0.360 0.265 0.437
–Pilot phase design 1.606 0.325 0.244 0.376
–Beneficiary identification and other 0.309 0.156 0.223 0.202
expansion activities
–Institutional strengthening 0.077 0.120 0.201 0.158
Source: Calculations by the authors using Tables 2 and 3 and methodology described in the text.
a
Year 2000 includes the costs and activities for the first two months of the programme in 1999; there were no
transfers made during 1999.
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or 2002, we conclude that on balance (and before considering private and social costs) the
CTRs presented here are, if anything, overstated.
At the outset, we highlighted two key design features of the programme targeting and
conditioningand their associated costs. What would the CTR be if these were not
features of the programme? Using the component CTRs in Table 5, we can approximate
how the overall CTR would change when we consider alternative programme designs. As
a starting point, we take the CTRs without design and evaluation components (the third
row in the second panel of Table 5). This represents the targeted and conditioned
programme. When we remove those activities related to conditioning, we see a large
decline in 2002, the year in which conditioning was fully operational and comprised about
one-quarter of the costs associated with delivering transfers. Removing targeting-related
activities, which include identification and incorporation of households, has a larger effect
on the ratio at the outset; however, in the final year there is only a 15 per cent decline.
Without targeting or monitoring of conditions, the estimated long-run CTR approaches
0.15, a total decline of about 40 per cent, underscoring that targeting and conditioning
require substantial resources.
4.4 Adjusted CTRs Incorporating Private Costs
While our information is most complete for programme costs and transfers, there are other
current costs that result directly from the introduction of the programme, particularly
related to the conditionality. Indeed, failure to include them may lead to severely under- or
overstated CTRs. Most of the private costs that stem from the programme are time costs
incurred by beneficiaries.
We assume that the value of increased time costs for children is not significant, because
only young children are targeted. This is uncontroversial for those under age 5, but some
school-age children may have to forego income-earning activities. For the 70 per cent of
children who were in school before the programme, however, there is no, or little change in
private costs. It is therefore reasonable to assume that, on average, time costs for children
are not substantial.
The value of time dedicated to the programme by adults, particularly the household
representatives, is a different matter. Beneficiaries incur time costs as a result of the
programme in several ways: they must attend health education workshops, bring their
children to the health controls, and travel to transfer distribution points. Other costs, such
as more time spent caring for children, are related to the programme but not strictly
necessary for participation, so we do not consider them. The surveys carried out for the
programme evaluation included questions specially designed to value these additional
costs. The median time cost for a household representative is about 40 hours over the year;
the increased out-of-pocket cost for travel is about C$40.
We calculated those amounts as follows, focusing attention on changes in time
allocation due to the programme.
6
Each representative has to attend six workshops per
year, each of which lasted 4 hours, for a total of 24 hours. They also must bring their
children to the health controls. Because the RPS health services are delivered closer to the
communities than the typical health post, and are expressly for beneficiaries, travel and
6
These calculations are based on a first-difference, comparing programme beneficiaries with non-beneficiaries
from the randomly selected control group in 2002.
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waiting time actually decrease for beneficiaries, on a per visit basis (hence it is a private
benefit). This gain, however, is somewhat offset by the fact that due to the requirements,
beneficiary children go to more controls than their counterparts in the control group
(Maluccio and Flores, 2004). The net effect is that travel time is about the same for the two
groups, while waiting time decreases by about one hour for beneficiaries. We therefore
estimate that there is no change in private costs due to this component of the programme
(including out-of-pocket travel costs).
The final component of the programme that induces a time cost to the household
representatives is travelling to transfer distribution points. For beneficiaries, we asked how
many extra trips (compared to if there had been no programme) they made to the
distribution points in the previous year to receive their transfers and how long they waited
for the transfer after they arrived. The total time necessary for these additional activities
during the year was approximately 6 hours of travel and 10 hours of waiting. In addition,
beneficiaries spent an extra C$40 during the year for travel expenses for these visits. If we
value the time of these women at C$30 for an eight-hour day, slightly more than most rural
women who work reported earning in the 1998 LSMS, we calculate an incremental private
cost for household representatives of C$190, including the out-of-pocket expenses.
Additional private costs are also borne by the promotoras. As they are also beneficiaries,
some of their work coincides with their own responsibilities as programme participants.
Based on discussions with promotoras and their counterparts in RPS, we estimate that they
contribute three additional days per month for their duties. Each promotora has on average
17 beneficiaries in her charge, so that the average additional time per beneficiary is about
2.5 days a year, or 20 hours. Valuing their time at C$30 per eight-hour day yields an
incremental private cost of C$75.
Combining the total costs for both household beneficiaries and promotoras, then, yields
an estimated private cost of some C$265 a year per beneficiary, a bit less than $20 for each
of the 10,000 beneficiaries. These costs are largely split between two activities in the
programme, the delivery of demand- and supply-side benefits. Including private costs in
the CTR leads to an increase of some magnitude. For example, including those costs in the
numerator for the continuation estimate in 2002 would change the ratio from 0.223 to
about 0.290, a 30 per cent increase. Programme designers must be aware of the costs their
programmes impose on private individuals.
4.5 Consideration of Social Costs and Benefits
Of course, there are other costs incurred (or saved) or benefits received by other actors in
the economy as a result of the programme, i.e., social costs and benefits. For example,
some programme expenditures include taxes that are not true social or resource costs, but
constitute a transfer of resources from the RPS budget to general revenues. In a full,
general equilibrium accounting, one would treat these costs as benefits in the ‘government
account’, thereby reducing the CTR.
At the same time, the programme expenditures reported here do not include supply-side
costs incurred by the ministries of health and education, for example for providing
vaccines or hiring new teachers. The Ministry of Health provides RPS-contracted
healthcare providers with vaccines and other materials, and the providers deliver them
to beneficiaries. As with other in-kind service transfers, we can consider treating the value
of these items (approximately $10 per beneficiary child) as the value of the in-kind
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transfer. It is not possible, however, to assess the additional costs to the Ministry of Health
associated with the programme, though arguably they are not very large and almost
certainly are smaller than $10 per beneficiary child, since savings associated with not
having to carry out the delivery of vaccines as well as provision of health services offsets
marginal costs.
On balance, we expect that by ignoring social costs and benefits, as we do because of
inadequate information, the CTRs we present slightly overestimate the society-wide CTR.
5 CONCLUSIONS
A major cause of the intergenerational transmission of poverty is the inability of poor
households to invest in the human capital of their children. Supply-side only interventions,
which increase the availability and quality of health and education services, are often
ineffective in resolving this problem, since resource constraints facing poor households
preclude them from shouldering the private costs associated with utilizing those services.
Innovative programmes like RPS attack this problem by targeting transfers to the poorest
communities and households and by conditioning these transfers on attendance at school and
health clinics. This effectively transforms pure transfers into human capital subsidies for poor
households. A criticism of these programmes, however, is that a large proportion of their
budgets is absorbed by administration costs and thus never reaches the intended beneficiaries.
This paper outlined a methodology for assessing cost efficiency focusing on the cost-
transfer ratio, defined as the ratio of non-transfer costs to transfer costs, and then applied it
to the pilot RPS. In doing so, we demonstrate that the usual approach to assessing cost
efficiency— making calculations using only the typically available raw accounting data
is misleading. Rather, we must delve into the details and specific activities of the
programme. Understanding the features of the programme and exactly how the CTR is
calculated, are crucial for interpreting it, particularly for pilot programmes such as RPS
that typically have many upfront fixed costs associated with design and setting up
operations. Very different numbers emerge when one takes snapshots of such programmes
at different stages in their development or when we include or exclude fixed costs. In the
case of the RPS pilot, ongoing costs were halved when we excluded fixed costs not likely
to repeat under programme continuation. Understanding programme features is also
important for complex programmes such as conditional cash transfer programmes that
have costs associated with specific design features, or that induce changes in beneficiary
behaviour that may engender substantial private costs.
For targeted and conditioned transfer programmes such as RPS to be cost effective at
reducing poverty, they must be cost efficient in terms of having low nontransfer costs and,
at the same time, effective at generating human capital impacts (Calde
´set al., 2004). Since
the latter requires that resources be devoted to targeting and monitoring conditionality,
there is a potential tradeoff between cost efficiency and cost effectiveness that must be
considered in any cost-reduction exercise. Reducing the CTR may not be desirable if it
comes at the expense of activities devoted to important administrative tasks.
ACKNOWLEDGEMENTS
This research began as part of the evaluation of the Red de Proteccio
´n Social (RPS) by the
IFPRI. We thank the RPS team, particularly Leslie Castro, Jose
´Martı
´Caldera, Norlin
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Sa
´nchez, and Mireille Vijil, for their valuable inputs. David Coady, John Engels, Matilde
Neret, Ferdinando Regalı
´a, two anonymous referees, and seminar participants at IFPRI
and the Central American Bank for Economic Integration provided helpful comments. We
gratefully acknowledge funding from the Inter-American Development Bank through the
Norwegian Fund for Social Innovation.
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... The one-way sensitivity analysis conducted for this parameter demonstrates the potential impact of including administrative costs. The 50% estimate used in the sensitivity analysis is higher than other estimates found in the literature of between 6 and 12% (Grosh et al., 2008); however, in the case of the one-way sensitivity analysis, the most conservative estimate was adopted to understand the highest potential impact of administrative costs on cost-effectiveness results (Caldés and Maluccio, 2005). In the CCT strategy where both diagnosis and treatment services are covered, INMB remains above zero when administrative costs are included, indicating that this CCT strategy is cost-effective even if administrative costs are substantial (Figure 4). ...
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Le présent document présente le chiffrage des transferts monétaires proposés dans le document de Politique Nationale de Protection et Promotion Sociales (PNPPS) en Haïti, qui a pour but de faire reculer durablement la pauvreté, réduire les inégalités, et promouvoir l’autonomisation des Haïtiennes et des Haïtiens. Cet exercice considère le chiffrage de onze mécanismes de transferts monétaires pour faire face à différentes situations selon les différents groupes d’âge et zones géographiques et considère une période de déploiement progressif de leur mise en place qui va de 2020 à 2030.
... Several Latin American conditional cash transfer programmes have been evaluated using this methodology (e.g. Coady et al. 2005;Caldés and Maluccio 2005;Caldés et al. 2006). The concept was introduced on the basis of the work by Caldés et al. (2006). ...
... Reducing shortterm vulnerability to potential heat can reduce the pressure to engage in coping strategies and help vulnerable households in investment decisions and innovations to increase their adaptive capacity and facilitate mobility and livelihood transitions (Wood, 2011). While such programs have been criticized regarding potential effectiveness, ethical or equity issues (Caldés and Maluccio, 2005;Lagarde et al., 2007), they may constitute interesting alternative preventive strategies to cope with exposure to extreme temperatures in the future. ...
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Heat waves and high air temperature are associated with increased morbidity and mortality. However, the majority of research conducted on this topic is focused on high income areas of the world. Although heat waves have the most severe impacts on vulnerable populations, relatively few studies have studied their impacts in low and middle income countries (LMICs). The aim of this paper is to review the existing evidence in the literature on the impact of heat on human health in LMICs. We identified peer-reviewed epidemiologic studies published in English between January 1980 and August 2018 investigating potential associations between high ambient temperature or heat waves and mortality or morbidity. We selected studies according to the following criteria: quantitative studies that used primary and/or secondary data and report effect estimates where ambient temperature or heat waves are the main exposure of interest in relation to human morbidity or mortality within LMICs. Of the total 146 studies selected, eighty-two were conducted in China, nine in other countries of East Asia and the Pacific, twelve in South Asia, ten in Sub-Saharan Africa, eight in the Middle East and North Africa, and seven in each of Latin America and Europe. The majority of studies (92.9%) found positive associations between heat and human morbidity/mortality. Additionally, while outcome variables and study design differed greatly, most utilized a time-series study design and examined overall heath related morbidity/mortality impacts in an entire population, although it is notable that the selected studies generally found that the elderly, women, and individuals within the low socioeconomic brackets were the most vulnerable to the effects of high temperature. By highlighting the existing evidence on the impact of extreme heat on health in LMICs, we hope to determine data needs and help direct future studies in addressing this knowledge gap. The focus on LMICs is justified by the lack of studies and data studying the health burden of higher temperatures in these regions even though LMICs have a lower capacity to adapt to high temperatures and thus an increased risk.
... Following the approach outlined in Dhaliwal et al. (2012), all values are first translated into U.S. dollars using market exchange rates after which they are deflated to 2000, the base year, using U.S. CPI. Costs included are direct program costs for running the program (administrative/management, targeting, monitoring and conditionality) but as recommended for cost-benefit analysis do not include the transfers or evaluation costs (reported in Caldés and Maluccio 2005). We allocate 50 percent of the average per household program cost as an estimate of costs related to the education components of the program, in nominal terms $60 a year for three years. ...
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Interventions aimed at improving the nutrition, health, and education of young children are often motivated by their potential to break the intergenerational transmission of poverty. A prominent example, conditional cash transfers (CCTs), has become the anti-poverty program of choice in many developing countries. Evidence is inconclusive as to whether the demonstrated short-term gains translate into the longer-term educational and labor market benefits needed to fully justify them. This paper uses the randomized phase-in of a 3-year CCT program in Nicaragua to estimate long-term effects. We estimate these effects using experimental variation, complemented by two alternative non-experimental identification strategies. We focus on boys aged 9–12 years at the start of the program who, due to the program’s eligibility criteria and prior school dropout patterns, were more likely to have been exposed to the program in the early treatment than in the late treatment group. Previously demonstrated short-term increases in schooling are sustained after 10 years, and there are substantial gains in learning. These improvements in human capital coincide with positive labor market returns—the young men are more likely to engage in wage work, migrate temporarily for better paying jobs, and have higher earnings. In Nicaragua, schooling and learning gains hence translate into earning gains for these young men, implying important long-term returns to CCT programs.
... In addition, there are some studies on the general achievements of CCT programs and their weaknesses as follows: Caldes and Maluccio (2005) There are quite a few studies of CCT program in Asia. ERIA research teams have reviewed current social protection and direction in some Asian countries . ...
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Laos has inadequate social protection, especially for the poor and the Lao economy is vulnerable to external shock, particularly from events like the global financial crisis. It seems that the poor suffered significant effects from the shock. Therefore, it is important to consider creating cash transfer programs for the poor. The main objective of this study is to assess the impact of cash transfers on poverty and income distribution during a crisis. A Computable General Equilibrium (CGE) model- and Micro-simulation are employed for this study. This study focuses on cash transfers to poor households with children, living in rural and urban areas. The simulation result shows that cash transfer has a significant impact on poverty and income distribution. It is noteworthy that poverty reduced more in rural rather than in urban areas. It is therefore important for government to consider establishing social support programs for the poor, in order to reduce poverty and mitigate external shocks such as the recent crisis and rising food prices. Keywords:
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We meta-analyze for impact and cost-effectiveness 94 studies from 47 conditional cash transfer programs in low- and middle-income countries worldwide, focusing on educational outcomes that include enrollment, attendance, dropout, and school completion. To conceptually guide and interpret the empirical findings of our meta-analysis, we present a simple economic framework on household decision making that generates predictions, all else constant, for the association between certain program context and design characteristics and impact estimates. We also present a simple model for the analysis of program costs, using it to compute cost-effectiveness estimates for a subsample of programs. For all schooling outcomes, we find strong support for heterogeneity in impact, transfer-effectiveness, and cost-effectiveness estimates. Our meta-analytic results of impact and transfer-effectiveness estimates provide support to some—but not all—of the predictions from the household decision-making model.
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About this series... This series is produced by the Health, Nutrition, and Population Family (HNP) of the World Bank's Human Development Network. The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account this provisional character. For free copies of papers in this series please contact the individual authors whose name appears on the paper. Enquiries about the series and submissions should be made directly to the Editor in Chief Alexander S. Preker (apreker@worldbank.org) or HNP Advisory Service (healthpop@worldbank.org, tel 202 473-2256, fax 202 522-3234). For more information, see also www.worldbank.org/hnppublications.
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for useful comments and for supplying us with reference materials, Yisgedu Amde and Sanjukta Mukherjee for helpful research assistance and Manorama Rani for document processing. We also thank seminar participants at IFPRI, the World Bank and participants at the following conferences, "Chronic poverty and development policy", University of Manchester in April 2003, IAEA 2003, NEUDC 2003 and IDB Social Development forum 2003 for their very useful remarks. The book is based on a paper commissioned by the Social Protection Anchor unit for the Safety Nets Primer series. The findings, interpretations and conclusions expressed in this publication are those of the authors and should not be attributed in any manner to the World Bank, its affiliated organizations, or to the members of the Board of Directors or the countries they represent. Please convey comments to d.
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Incl. abstract, tables and bibliographical references A common criticism of antipoverty programs is that the high share of administrative (nontransfer) costs substantially reduces their effectiveness. Yet, there is surprisingly little rigorous empirical evidence on program costs. Improved information and a better understanding of the costs of such programs are crucial for effective policymaking. This study proposes and implements a replicable methodology for a comparative cost analysis of three similar poverty alleviation programs in Latin America, and assesses their cost efficiency. The findings underscore that any credible assessment of cost efficiency requires a detailed analysis of program cost structures that goes well beyond simply providing aggregate cost information.
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"In 2000, the Nicaraguan government implemented a conditional cash transfer program designed to improve the nutritional, health, and educational status of poor households, and thereby to reduce short- and long-term poverty. Based on the Mexican government's successful PROGRESA program, Nicaragua's Red de Protección Social (RPS) sought to supplement household income, reduce primary school dropout rates, and increase the health care and nutritional status of children under the age of five. This report represents IFPRI's evaluation of phase I of RPS. It shows that the program was effective in low-income areas and particularly effective when addressing health care and education needs. The report offers the first extensive assessment of a Nicaraguan government antipoverty program." Authors' Abstract
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"This document synthesizes the findings contained in a series of reports prepared by IFPRI for PROGRESA between November 1998 and November 2000... PROGRESA is one of the major programs of the Mexican government aimed at developing the human capital of poor households. Targeting its benefits directly to the population in extreme poverty in rural areas, PROGRESA aims to alleviate current and future poverty levels through cash transfers to mothers in households.... One of the most important contributions of IFPRI's evaluation of PROGRESA has been the continuation of the program in spite of the historic change in the government of Mexico in the 2000 elections. The overwhelming (and unprecedented) evidence that a poverty alleviation program shows strong signs of having a significant impact on the welfare and human capital investment of poor rural families in Mexico has contributed to the decision of the Fox administration to continue with the program and to expand its coverage in the poor urban areas of the country after some improvements in the design of the program.... The majority of the improvements in the design of PROGRESA (renamed Oportunidades by the Fox administration) were based on findings of the evaluation of PROGRESA that revealed areas of needed improvements in some of the structural components and the operation of the program... Yet in spite of these improvements in the program, the evaluation findings suggest that some issues remain to be resolved." from Text
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Seven case studies—from Bolivia, Colombia, Indonesia, Mexico, Nicaragua, Taiwan (China), and Turkey—demonstrate the feasibility of conducting rigorous impact evaluations in developing countries using randomized control designs. This experience, covering a wide variety of settings and social programs, offers lessons for task managers and policymakers interested in evaluating social sector investments. The main conclusions are: first, policymakers interested in assessing the effectiveness of a project ought to consider a randomized control design because such evaluations not only are feasible but also yield the most robust results. Second, the acute resource constraints common in developing countries that often make program rationing unavoidable also present opportunities for adopting randomized control designs. Policymakers and program managers need to be alert to the opportunities for building randomized control designs into development programs right from the start of the project cycle because they, more than academic researchers or evaluation experts, are in the best position to ensure that opportunities for rigorous evaluations are exploited.
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"One of the common criticisms of poverty alleviation programs is that the high share of administrative (nontransfer) costs substantially reduces the programs' impact on poverty. But very little empirical evidence exists on program costs. For example, a recent extensive international review of targeted poverty alleviation programs in developing countries could find data on costs for only 32 out of the 111 programs reviewed. Even then, the numbers available were not always comparable. In this paper, we present a detailed analysis of the cost structure of a program recently introduced in Mexico, called PROGRESA. Our analysis shows how cost data can be used as the basis for an evaluation of the cost efficiency of anti-poverty programs. It cautions, however, that one must be very careful when interpreting cost numbers or undertaking comparisons across programs in order to avoid misleading conclusions. Any credible analysis of a program's cost efficiency must involve a detailed analysis of cost structure and not simply provide aggregate cost information. We also highlight the importance of not neglecting private costs incurred by households in taking up transfers." Authors' Abstract
PROGRESA and its impacts on the human capital and welfare of households in rural Mexico: a synthesis of the results of an evaluation by IFPRI
  • E Skoufias
Skoufias E. 2003. PROGRESA and its impacts on the human capital and welfare of households in rural Mexico: a synthesis of the results of an evaluation by IFPRI. Draft Research Report. International Food Policy Research Institute: Washington, DC. World Bank. 2001. Nicaragua poverty assessment: challenges and opportunities for poverty reduction. Report No. 20488-NI. The World Bank: Washington, DC.