Oh cynics, you win again…

What accounts for the massive popularity of conditional cash transfer programs in Latin America: Their poverty-fighting prowess? Their social justice ideals?

we find that beneficiary households are 21 to 28 percentage points more likely to favor the current government (relative to the previous government). Impacts on political support are larger among poorer households and for those near the center of the political spectrum…

Effects persist after the cash transfer program ends. We estimate that the annual cost of increasing government political support by 1 percentage point is roughly 0.9% of annual government social expenditures.

That is from a new paper by Manacorda, Miguel and Vigorito.

6 thoughts on “Oh cynics, you win again…

  1. So, people tend to support governments that enhance their welfare? That seems to be old news. After all, isn’t that one of the reasons one has governments in the first place?
    And I see no trade-off between gaining political support, reducing poverty and achieving social justice. The success of cash transfers can be explained by their ability to achieve (at least partially) these objectives at a low cost comparing to other forms of political bargaining. There are other ways: in Brazil, for example, land reform could be one option, but that would be very costly and socially contentious. Bolsa-Familia, Brazil’s cash-transfer programm, on the other hand, is largely supported not only by its beneficiaries but by the population at large. Ironically, it has also led people to abandon the Landless Movement (MST), reducing conflict and gaining the government political support. In terms of poverty reduction, it is debatable whether land reforms would be a better option.

  2. Too bad cash transfers from US to other countries doesn’t result in more favorable views of the US.

  3. I’ve done a lot of work on a Nicaraguan conditional cash transfer program, so I’m pretty convinced they can make meaningful changes. Heck, even Easterly had postiive things to say about them when I saw speak at the ASSA a couple of years ago.

    This might not be a bad thing. A stable government with broad support might enhance growth.

    Also other Berkeley researchers have shown in Brazil when the government does a poor or corrupt job of implementing the program, they are voted out of office.
    http://are.berkeley.edu/~sadoulet/papers/BolsaEscolaReport1.pdf

  4. I agree with masjop. As in other policy areas, it is only natural that at least one aim of redistributional and social programs is to maximize the chances of incumbents to remain in office. The real question is how those policies are designed and implemented, and if they allow clientelistic forms of exchange to take place, namely, the exchange of votes for benefits. That implies a patron (the government, the party, the cacique) able to effectively target and condition the delivery of such benefits to loyal voters and to punish those who defect. If, on the contrary, programs are desgined and explicitly define the conditions and timing under which beneficiaries may enter or leave the program, then a clientelistic exchange is more unlikely to emerge. Finally, evidence from the second largest CCT in Latin America (Mexico’s Progresa-Oportunidades) seems mixed at best. In 2006 the poorest areas of the country (where beneficiaries represent an important part of the electorate) massively voted for the left opposition party and against the party in power who expanded the program to 5 million families (=more of 20% of the population). As for Brazil’s Bolsa Familia, its initial federal version, Bolsa Scola, was launched and consolidated by FH. Cardoso’s administration. As far as I know, Lula won the popular vote in 2002, particularly among poorer voters. So CCT’s may only account for part of electoral behavior. In the end, poor voters, are not stupid voters. They will engage in a clientelistic exchange as long as they are forced to do so. If they feel or expect that the government won’t be able to condition their benefits based on the orientation of their vote, then they will vote as they please. And yes, they may still be grateful and vote for the incumbent.

  5. Motivation is one thing (and an irrelevant thing more often than many think). Consequences are another thing (and presumably what we often care about).

  6. Intutively too, cash transfers, being more direct and salient, are more likely to catch the immediate imagination of its beneficiaries than the more indirect methods like subsidies or in kind assistance. Surely, it provides more direct exposure for the politician to deliver the subsidy for fertilizers or crop price support or health insurance as direct cash transfers instead of the regular method providing poor quality seeds or fertilizers or health care.

    In fact, one of the greatest attractions for politicians (and Governments) in promoting Self Help Groups (SHGs) and micro-finance in states like Andhra Pradesh in India, has been the symbolic political value attached to the regularly held loan disbursement melas. The flagship poverty alleviation programs of both the previous (Velugu program) and present (Indira Kranti Pathakam and Pavala Vaddi loans) governments in Andhra Pradesh have revolved around direct cash transfers in the form of micro loans to SHG members.

    Many shrewd politicians have realized that they derive more political mileage from these direct cash disbursements than the old IRDP-style asset distribution! CCTs are only a small step ahead from the SHG loan disbursements. Now, atleast this should spur some of our own politicians to embrace them!