The Politics of Poverty: South America’s Conditional Cash Transfers

The Politics of Poverty: South America’s Conditional Cash Transfers

Over the past decade, Latin America has generally performed very well. Regional economic growth has been fairly robust, averaging 5.5 percent from 2003-2008 and bouncing back from the global downturn better than most experts anticipated. Politically, several countries have made important democratic strides, with Brazil and Mexico standing out. And in contrast to the wave of market reforms in the 1990s, when the Washington Consensus held sway, governments have sought to complement pragmatic approaches to economic growth with an increased emphasis on the social agenda and the inclusion of marginalized groups. Sound policymaking and deepening concern with social disparities have resulted in dramatic reductions in the levels of poverty and even, in a number of cases, inequality.

To be sure, overall progress would have been far less impressive without such a favorable external environment, namely, the heightened global demand for South American commodities. Indeed, though nearly a fifth of all Peruvians were lifted out of poverty during the governments of Presidents Alejandro Toledo (2001-2006) and Alan Garcia (2006-2011), such gains can be attributed far more to the commodities boom and prudent economic decision-making than to any discernible, targeted social policy. The so-called trickle-down effect cannot be entirely dismissed.

But more broadly speaking, Latin America’s recent improvement in a range of social indicators is also due to policy innovations aimed at relieving the plight of the poor. Though such programs are often associated with “leftist” governments, they have gained traction across the political spectrum. Of these initiatives, the conditional cash transfer (CCT) has become the hallmark of the region’s anti-poverty efforts. Pioneered in its modern form in Mexico during the 1990s, CCTs provide a modest monthly stipend ($5-$50) to poor mothers, with the stipulation that they make sure their children receive adequate medical attention and attend school. The aim of the two-pronged approach is to alleviate poverty and, at the same time, to encourage responsible parenting.

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