Conditional Cash Transfers: A New Paradigm for Combating Poverty in Latin America?

Abstract

The beginning of this century was characterized in Latin America by the development of a variety of government proposals that fundamentally questioned the neoliberal ideas of the 1990s. These were and are proposals in which the state plays a key role in national development strategies and their implementation. Such policies have come to be referred to as “new developmentalism” or “neodevelopmentalism” . This new role assumed by the State generates changes in public policy in general and social policies in particular. Although the priority assigned to output growth and employment has led most countries to an improvement in economic and social indicators, socio-economic problems affecting a large part of the population persist in a variety of contexts: unemployment, informality, poverty and indigence remaining persistent issues to date amongst a plethora of other unresolved problems. In order to solve this problem, political authorities have expanded a set of social policies in Latin America, mostly driven by international financial institutions and their objectives. These policies - called Conditional Cash Transfers Programmes (CCTP)- supply monetary benefits as long as beneficiaries can demonstrate that they have met certain conditions (popularly such transactions are referred to as funding “with strings attached”). Such policies supposedly aim to reduce poverty levels, not only in the short-term “by way of stimulating monetary profits” but also via medium-term strategies which are designed to break intergenerational cycles of poverty via “human capital accumulation”. In 1997, only three countries in Latin America had such programs underway, ten years later, almost all of the countries in the region have at least one program of this type in effect (Lavinas, 2013). It is estimated that such programs reach 70 million people (Valencia Lomeli, 2008). Several of these policies aim to reduce poverty by promoting work placement for social policy beneficiaries and providing social benefits to workers who are not currently in the formal sector of the economy. The implementation of CCTP on a massive scale is part of a reconfiguration of the social protection system worldwide which can be traced back to the period of the mid-seventies when such programs were characterized by their promotion of a new way to manage social risks. This strategy aims to promote self-sufficiency, individualism and self-responsibility in risk coverage of the target population. In its analysis of the theory and practice of such strategies, this paper works toward the realization of two main objectives: 1) investigate the characteristics that have been adopted in Latin America in order to facilitate this new configuration of the social protection system, and 2) analyze the relation between this new configuration and the dynamics of capital accumulation in the region, understanding that the new development mode —which recovers some of the Latin American structuralism’ and its basic precepts but also incorporates patterns of prevailing liberal model— has its counterpart in the transformation of the current model of social protection in the region.