a.

CCT programs
A growing number of developing countries have implemented conditional cash
transfer (CCT) programs in order to improve living standards of poor families
and break the cycle of intergenerational poverty. They address demand-side
barriers and have a synergistic focus on minimum investments in health,
education and nutrition. Also, they combine short-term transfers for income
support with incentives for long-run investments in human capital (Brire &
Rowlings, 2006). This mechanism is a type of safety net and consists in
providing cash transfers to poor people if they satisfy certain verifiable
requirements as attending school or visiting periodically health care centers,
for instance. Those conditions aim to increase the investment in human capital,
especially in childrens one (Fiszbein, y otros, 2009)
Another characteristic is that most CCT programs transfer the money to the
mother or to the student in some circumstances. Besides, their implementation
has expanded enormously not only in Latin America where they began- but
also in some countries of Africa and Asia like Indonesia, Cambodia, etc. (see
Annex 1) In fact, virtually every country in Latin America has a CCT program
(Fiszbein, y otros, 2009). Paralleling there has been a rise in the number of
beneficiaries, for example Mexicos PROGRESA started with approximately
300,00 households and now named as Prospera it has exceeded 6 million
(Coordinacin Nacional de PROSPERA Programa de Inclusin Social, 2014).
Furthermore, CCT programs vary greatly in coverage. Some of them are
nationwide; meanwhile others are niche (regional or narrow target population)
or small scale/pilot (see Annex 2). This situation depends on the context of the
country and the conditions of their implementation. Therefore, CCTs face some
challenges in their impact evaluation because sometimes they are
implemented and maintained because they are popular and the analysis of
their effects is not taken so seriously by governments. This is the case of
Brazilian programs like Bolsa Familia which in contrast to Mexicos
Oportunidades do not include impact evaluations in their design (Fiszbein, y
otros, 2009)
Some of the defenders recognize that CCTs fight against demand-side barriers
to investment in human capital including lack of information, the direct costs of
access to health and education (uniforms and transportation) and the
opportunity costs of schooling because of reliance on child labor (Brire &
Rowlings, 2006). Also, CCT programs seek to address not only short-term
consumption needs, but long-term poverty by fostering human capital
investments in the complementary areas of nutrition, health and education.
(Brire & Rowlings, 2006)
However, it is also true that governments face huge challenges when
implementing these programs. There has to be an accurate system for

supervision of the beneficiaries and the States have to ensure the conditions
for its success. For example, when children who live in rural areas go to poorquality schools the condition of going to school is not enough or some
communities are so far away from schools or health care centers, so they are
not able to fulfil the requirements and are excluded. The critics of these
programs state that they give incentives to stay poor because without that prerequisite governments are not going to transfer money.
b. Poverty
Poverty is one of the major issues in some countries and the one role of
economic policy is to fight against it. In that sense it is so important to know
how to measure because it affects the results. Most countries measure poverty
through a mechanism called poverty line. So, governments establish an
amount of money (income) that covers the basic basket of goods for food
consumption. This is the case of Peru for instance, people who are below this
line are considered extreme poor and people who are above it are classified in
two categories: poor and not poor. CCTs often focus on extreme poor sectors
(Brire & Rowlings, 2006)
All these indicators consider income as a measure of well-being; however it
does not capture the complexity of poverty. Poverty of a person arises due to
his/her insufficiency of different attributes of well-being, for example housing,
literacy, education, health, etc. (Bourguignon & Chakravarty, 2002). Therefore,
poverty is a multidimensional phenomenon. These kind of measures can help
to understand who is poor and how they are poor- the range of different
disadvantages they experience (Oxford Poverty & Human Development
Initiative, 2007)
In 2010, the multidimensional Poverty Index (MPI) was published for the first
time. This measure is going to be considered for this investigation in order to
understand better the impacts of CCTs on poverty and also because CCTs are
oriented to improve human capital (health, education, etc.) This index
considers three divisions that include ten indicators. As can be seen below:

Source: (Oxford Poverty & Human Development Initiative, 2007)

If someone is deprived in a third or more of ten (weighted) indicators (see left),

the global index identifies them as MPI poor, and the extent or intensity of
their poverty is measured by the number of deprivations they are experiencing.
(Oxford Poverty & Human Development Initiative, 2007) Some Latin American
countries are implementing this kind of measures like Colombia and Mexico, for
instance.
c. Inequality
Inequality can be based on gender, income, age, race, religion, etc. For the
purposes of this investigation inequality is considered based-income due to the
availability of information. So, a standard measure of it is the Gini Coefficient.
This indicator goes from 0 to 1, where 0 is complete equality and 1 means the
most extreme inequality in the distribution of income.
According to some authors, CCTs have failed as a way of reducing inequality
(Fiszbein, y otros, 2009), but in this paper we are going to focus on Bolivia and
Peru for determining if that result is true in these countries.

Annex 1 no estoy segura de cmo se dice

Ilustracin 1: CCTs 1997-2008

Source: World Bank

Annex 2
Tabla 1: Matrix of program size and extend of conditions

Source: (Fiszbein, y otros, 2009)