The Safety Nets of Conditionality

By: Udita Singh

Many heads were turned when New York City looked towards Mexico for advice on a social assistance programme. Not only did NYC learn a thing or two from Mexico’s ‘Opportunidades’ but it was also realized that the right kinds of policies need to be formulated for the right kind of action to take place at the right point in time.

CCTs or Conditional Cash Transfers are not a new approach in dealing with health, education and genders issues around the world. CCT programs provide cash payments to poor households that meet certain behavioural requirements. As part of World Bank’s ‘safety net’ policy, they have been vastly used in Brazil, Cambodia, Turkey and Chile and generated favourable, targeted response in the sectors of education, health and nutrition. The benefits of the CCTs in these countries have been keenly observed by other countries, especially in the developing world and often the models have been replicated.

India too is now experimenting with the CCTs, especially in the PDS and health sector. Food is the largest subsidy sector of the government, followed by fertilizers and fuels. But often these don’t reach the targeted beneficiaries. CCTs check the diversion of subsidies. CCT will first and foremost give a minimum income guarantee to every household, even though on a conditional basis. The Lancet (June 2010) tells us that India’s Janani Suraksha Yojana — -a CCT program that pays to get women deliver their children in a health facility — -is saving newborns’ lives and lowering the number of stillbirths. The research found some inter-state variation, but the broad picture is positive. In March 2008, ‘Dhanalakshmi’ — a CCT scheme for female children for insurance cover-was introduced in Andhra Pradesh, Uttar Pradesh, Bihar, Orissa, Jharkhand, Chhattisgarh and Punjab.

The gender dimension of CCT is vital as it connects to the question of ‘do we need conditionality’?Are the poor wise enough to make choices for themselves? Empowering women is a possible substitute to conditionality. Women tend to spend on education and health of their children sans external incentives.

There are sceptics too though. According to Jean Dreaze, CCTs can be dangerous in the long run. He says it is an illusion that ‘CCTs can replace public services by enabling recipients to buy health and education services from private providers. According to Dreeze, in Latin America, CCTs are usually seen as a complement, not a substitute, for public provision of health, education and other basic services.’ CCTs require a lot of infrastructure already in place- it presumes certain social structures pre-exist. The national identity card is good step forward in building the infrastructure necessary to deliver CCTs.