Conditional Vs Unconditional Cash Transfers

Question 1

Lasting effects?

Answer 1

• UCT reduces short term poverty (Vietnam, 2006 - 2 years later poverty down by 20%)
• CCT has short and long term effects - Milawi shows benefits persist after cash transfers cease

Question 2

Effect on Donor

Answer 2

UCT - donor does not monitor program, no effect
CCT - if donor is public treasury, induces changes in behavior. eg. if program increases number of children in school, creates pressure for government to ensure schooling is of a high standard

Question 3

Effect on recipient behavior

Answer 3

UCT - spending patterns could remain the same

CCT - conditions can change behavior

Question 4

Political implications

Answer 4

UCT - stigma that poor getting free money

CCT - reassures public that money having positive impact

Question 5

Measuring costs

Answer 5

extra monitoring costs for CCT

Question 6

Better for next generation?

Answer 6

CCT - can focus on helping next generation through conditions whereas UCT leaves it to chance

Question 7

CCT works better when

Answer 7

families do not appreciate real value of the benefits of health, education etc.