evaluation of the impact of A Pilot-Project of Conditional and Unconditional Cash Transfers in The NahouriProvince of Burkina Faso
Concept Note
- Introduction
The project’s goal is to use a randomized experimental design to evaluate the impact and compare the effectiveness of fourresource transfer programs to poor households in developing countries: conditional cash transfers givento the mother, conditional cash transfers given to the father, unconditional cash transfersgiven to the mother, and unconditional cash transfers given to the father.The study will compare the interventions’ educational, health, and early childhood development impacts in Nahouri province in southern Burkina Faso from 2008 to 2011.
Conditional cash transfer (CCT) programs have become one of the most popular social sector interventions in developing countries. While the program design details vary, all programs transfer resources to poor households conditional on the household taking active measures to increase the human capital of their children (enrolling their children in school, taking them for regular health care visits, and receiving necessary immunizations). CCT programs have two clear objectives. First, in making transfers conditional, the program seeks to encourage human capital accumulation and break a vicious cycle in which poverty is transmitted across generations.Second, the program attempts to provide poor households with a consumption floor and to improve a household’s asset base and income generating potential.A growing number of countries, in particular in Latin America, but also in Asia have implemented such programs.[1] In Africa, two CCT pilot programs (in South Africa and Kenya) have been implemented, but both focusexclusively on orphans and HIV households and neither has yet been rigorously evaluated.
The CCT programs contrast with unconditional cash transfer (UCT) programs, which do not impose conditionality constraints.There are two main differences between UCT and CCT programs. First, CCT programs represent a “top-down” approach in which the outside authority decides what is best for poor children and provides incentives to their parents to achieve these objectives. On the other hand, UCT programs assume that parents, once the income constraint is removed, are in a better position to make appropriate decisions regarding their child’shealth and education.Second, CCT programs are significantly more costly to administer than UCT programs, due to the expenses associated with monitoring that the conditions are met.While there have been previous randomized evaluations of CCT programs in several Latin American countries and non-randomized evaluations of UCT programs, there have been no rigorous evaluations of these two transfer schemes within the same local environment, an exercise that would enable policy makers and researchers to compare the benefits and costs of each approach.[2]
The proposed impact evaluation is designed to answer at least four critical policy questions related to social protection programs in developing countries.
1) Can CCT programs, which have been shown to be effective in Latin America, be effective in Africa?Since CCT programs rely on a certain level of administrative capacity (the ability to target households, plan meetings to notify households of their obligations and rights, monitor household compliance and conditionality, and transfer funds to families), can these programs be successfully implemented by African central or local governments?[3]
2) Are CCT programs effective mainly because of the cash transfers or because of the conditionality? Our projectwill compare conditional cash transfers with unconditional cash transfers, which permits researchers and policy makers to determine whether it is the additional income or the explicit incentive mechanism that leads to the CCT program impact. While this question continues to be debated, no randomized evaluations comparing CCT and UCT programs have yet been conducted.
3) Does the gender of the transfer recipient influence the program’s impact? We will examine the potentially differential impacts resulting from giving cash transfers to mothers versus fathers. Numerous intrahousehold bargaining research papers indicate resources under the mother’s control have astronger positive impact on a child’s health and schooling than when those resources are controlled by the father.[4] However, almost all current cash transfer programs give the resources to the mother, so it is not possible to disentangle how much of any impact is due to the recipient’s gender, how much is due to the income effect, and how much is due to the change in relative prices associated with the conditionality. Furthermore, the recipient’s gender might impact outcomes differently for conditional as opposed to unconditional cash transfers.
4) Do these cash transfer schemes have different impacts onasset accumulation,risk-coping, consumption, and production decisions?For a program to break the intergenerational transmission of poverty, in addition to investments in a child’s human capital and health, it must also help households get out of long-term poverty traps that are often linked toinsufficient household assets (Carter and Barrett, 2006). The regularity and size of the cash transfers might remove liquidity constraints allowing the household to improve its asset holdings and short-run income generating activities. It might also lead to increased consumption due to improved risk-coping strategiesand production increases due to the use of modern inputs. However, UCT and CCT programs, due to the conditionality restrictions of the CCT program, could yield different impacts on asset accumulation, consumption, and production outcomes.
From a policy perspective, the answers to these four questions are crucial to help design cost-effective programs to help break the intergenerational transmission of poverty in developing countries.
2. Program Intervention and Research Objectives
Cashtransfer schemes represent a substantial fraction of the intervention portfolios of development institutions such as the World Bank, and the population of individuals reached, as well as the resources used, has surged during the last 5 years. Given this, the need for randomized evaluations measuring the impact of UCT programs and comparing different types of cash transfer programs in the same environment is all the more imperative. Further, the gap in our knowledge of how the gender of the transfer recipient interacts and influences child and household outcomes also needs to be filled. Using a randomized experimental design, the project’s objective is to compare the impact of conditional and unconditional cash transfers and examine the role of the program recipient’s gender in influencing outcomes.
The study will take place in Nahouri province in southern Burkina Faso. For several reasons, Burkina Faso offers a useful setting for evaluating these interventions. First, educational achievement and child health indicators are low in Burkina Faso, so these programs could benefita large number of children.Second, the Burkina Faso government has agreed that, at the study’s conclusion,the recommendations from the program evaluation will be utilized to determine which social protection program to expand to the rest of the country.[5]
The evaluation will be based on the analysis of longitudinal household surveys combined with health facility, primary school, and village surveys. A baseline household survey took place in May-June2008 before the intervention started in October 2008 (at the onset of the 2008-2009 academic school year).There will be follow-up surveys in May-June 2009 and May-June2010, allowing sufficient time for potential program impacts to accumulate.[6]
In addition to the program’s direct impact on education and health outcomes, the study will also explore other direct effects of cash transfers. By providing households with a steady cash flow and a consumption floor and by removing liquidity and credit constraints, cash transfers can influence household production both on and off-farm. For instance, households might adopt production technologies they would not have otherwise adopted or take additional risks to improve farm productivity and output (Dercon and Christiaensen, 2007). By increasing the income level within the community, cash transfers can generate multiplier effects beyond the primary outcome of interest (Gertler, Martinez, and Rubio, 2005). These programs might also generate significant spillover effects within the communities even for households that did not receive treatment interventions (Angelucci and De Giorgi, 2006). Our sample design as well as the survey instruments will ensure that we can explore these questions in detail.
Evaluations of CCT programs in Latin America provide evidence of their ability to positively influence both educational and health outcomes of children in poor households in a relatively short time period.[7]However, conditionality greatly increases the program cost and the necessary level of government involvement and administrative capacity. These increased costs and administrativeneeds have led to the argument that CCT programs are well suited for middle-income countries but cannot be implemented in low-income African countries with weak administrative capacities (Samson, 2006; Székely, 2006; Freelander, 2007).This argument is part of a broad debate on which circumstances are appropriate or necessary for using a particular intervention scheme (de Janvry and Sadoulet, 2005, 2006).
In contrast to CCT programs, unconditional cash transfers to poor targeted households are less costly (as there is no need to enforce conditionality) and evidence demonstrates their effectiveness.An evaluation by Case, Hosegood, and Lund (2005) of the South African Child Support Grant, an unconditional cash transfer targeted to families with young children, finds a large positive schooling impact, while Aguero, Carter, and Woolard (2006) evaluate the same program and find an improvement in children’s nutrition.Evaluations of South Africa’s pension program (a type of unconditional cash transfer) show an increase in school enrollment and improvements in children’s health (Case and Deaton, 1998; Duflo, 2003; Edmonds, 2006). However, none of these UCT program evaluations were randomized,which yields the possibility that unobservable factors correlated with receipt of the treatment also influence outcomes.
For a UCT program in Ecuador that incorporated an explicit randomized evaluation, results show significant positive improvements for schooling (Araujo and Schady, 2006) and nutritional status and cognitive development (Paxson and Schady, 2007). However, in the implementation of the UCT program, program administrators stressed the importance of schooling, which led some households to believe that conditionality was part of the cash transfer.In addition, 42 percent of households in the control group received cash transfers, raising doubts about the randomized evaluation design (Schady and Rosero, 2007).
Several recent studies attempt to directly compare CCT and UCT programs. De Janvry and Sadoulet (2005) present theoretical arguments for why a CCT program should have a larger impact on the conditioned outcomes than a UCT program. Kakwani, Soares, and Son (2005) present ex ante simulations arguing that UCT programs will have a small impact in Africa. Finally, for some CCT recipients in Mexico’s Progresa program, the conditionality requirements were not enforced and results show educational attainment was reduced (for these pseudo-UCT households) but only for students transitioning from primary to secondary school (de Brauw and Hoddinott, 2007).
One of the literature’s main gapsis the lack of a rigorous, randomized evaluation of both CCT and UCT programs within the same local environment. This comparison is not only of academic interest. African policy makers do not know if CCT programs are feasible given the administrative constraints they face, and they do not know if UCT programs,by removing a constraint the households face,will achieve the desired improvements in children’s schooling, health, and early childhood development, as well as reduce household poverty and improve asset accumulation.By being the first to provide a comparison of the impact of a CCT and UCT program within the same local environment, the findings of this project will help development practitioners determine the most effective ways to transfer resources to the poor.
Characteristics about who receives the cash transfer, in particular the recipient’s gender, might have significant impacts on how the transfer income is used and the subsequentprogram impact.Non-unitary household bargaining models predict that cash transfers given to mothers will increase their bargaining power within the household and lead to expenditures that better reflect the mother’s preferences (Chiappori, 1988; Lundberg and Pollak, 1993). However, a significant difficulty in the intrahousehold bargaining literature to empirically prove this point is the potentially endogenous nature of men’s and women’s income. To solve this problem, we randomly allocate cash transfers to either the mother or the father. Almost all existing cash transfer programs provide the resources only to the mother, making it impossible to determine how much of any impact is due to the recipient’s gender, how much is due to the income effect and how much is due to the change in relative prices associated with the conditionality.
Decision-makers face challenges and trade-offs when designing social assistance programs. Targeting and conditionality may increase effectiveness and maximize impact but generating information to set targeting rules and monitoring conditionality rules can be costly. Administrative burdens created by enforcing conditionality might limit the ability of low-income African nations to implement widespread CCT programs. A rigorous, randomized evaluation can provide the magnitude of the short-run impact and cost under each transfer scheme. By using household behavioral models in addition to the mean comparisons across treatment and control groups, the results will provide a benchmark of the resource amount required for a desired impact level, given local population characteristics and a particular intervention scheme.
3. Evaluation Design and Data Collection
3.1. Program Structure and Sampling Design
The research protocol consists of randomly assigning 3250 households in 75 villages to the following five groups(with 650 surveyed households in each group): (i) conditional cash transfers given to the father, (ii) conditional cash transfers given to the mother, (iii) unconditional cash transfers given to the father, (iv) unconditional cash transfers given to the mother, and (v) a control group.[8]
We were limited to 75 villages for political and budgetary reasons. The Government of Burkina Faso did not want to pilot the project in more than one province, mainly for budgetary reasons and we had to work in one of the Provinces where the Bank HIV/AIDS project was active. That limited our choice. We have 75 villages because we took all villages in the Province with a primary school in a 5km radius. We reasoned that it did not make sense to conduct a study about a demand-side education intervention where the supply of education is inexistent.
While 15 villages per evaluation group is limited, we have just completed an impact evaluation of school feeding programs in Burkina Faso and we found significant effects after one year of intervention with evaluation groups of 15 villages on average. (Kazianga, de Walque and Alderman, 2009). In this experiment, we will have 2 years of intervention, so we are fairly confident that we will be able to detect potential effects.
We have recently conducted a preliminary analysis of the baseline data collected in May-June 2008 and we found that the sample was well balanced across the four intervention groups and the control group on a large range of individual and household characteristics, indicating that the randomization appears to have worked well.
Only poor households are eligible to receive a cash transfer (below we discuss in detail the targeting of how households are divided into poor and non-poor groups).
Within the four cash transfer groups (60 villages),we interview three types of families. First, we interview poor households eligible to receive the transfer and who are randomly selected to receive it. Second, we interview poor households who are eligible to receive the transfer but are not randomly selected to receive it. Third, we interview non-poor households who are not eligible to receive the transfer. In each of these four groups of 15 villages(based on sample size power calculations), we interview 500 poor households randomly selected to receive a transfer, 75 poor eligible households that did not receive a transfer, and 75 non-poor households that are not eligible to receive a transfer. Interviewing non-poor households in villages where some poor households receive a cash transfer allows us to evaluate whether the infusion of resources to the village has any spillover effects to these non-poor households. Likewise, interviewing poor, eligible households that did not receive a transfer but live in villages where other poor households did receive a transfer allows us to measure any spillover effects to these poor non-recipient households. Finally, the control group consists of randomly selected households in villages where no households receive cash transfers. In these 15 control villages, we interview 575 randomly selected poor, eligible households that do not receive a cash transfer and 75 non-poor, non-eligible households.Figure 1 diagrams the five different groups and indicates within each village the eligible and non-eligible householdsto be interviewed.