Conditional Cash Transfers Free Essay

Introduction

The purpose of the literature review part is to evaluate available information on the impact of conditional cash transfers (CCTs) in both Brazil and Mexico to determine their success, failure, and challenges. The main objective is to use the information to clear doubts that exist about the effectiveness of CCTs and support the idea of implementing them in other countries. The available information will also be used to compare conditional cash transfers and unconditional cash transfers in both countries to determine which method of funding the poor is more effective, and more advantageous to the beneficiaries, fund administrators, and those donating the funds. This is a literature review-based study, and the information collected will be used to make a conclusion and give recommendations.

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Conditional Cash Transfers in Brazil

Governments and other humanitarian agencies in developing countries are gradually moving from unconditional cash transfers to conditional cash transfers when giving cash aid to the poor. Unlike in the past when cash recipients have been free to use the money the way they wanted, donors and government now want to make sure beneficiaries of such funds have used the money for the intended purpose. Brazil is among the countries that have embraced the idea of CCTs lately and achieved success (Ferrario, 2014, p. 148). It is worth noting that although Brazil is among the countries that have registered substantial economic growth in recent years, inequality and extreme poverty remain a threat to its economic growth and sustainability. Some people in Brazil live below the poverty line and have no access to basic needs, such as food, housing, healthcare services, and good quality education. The inequality in the distribution of wealth has made some people extremely rich in Brazil, while others live in extreme poverty (Ferrario, 2014, p. 148).

The inequality in the distribution of national wealth and resources has left a good number of the citizens in Brazil extremely poor. This is a peculiar situation because Brazil has registered positive economic growth in the recent past. However, the biggest challenge in Brazil is the inequality in the distribution of resources that has left the largest population in extreme poverty and, on the other hand, a small percent of the population that is extremely rich. Governance issues by the past regimes are one of the factors that have created loopholes for inequality when distributing the resources of the country. However, not all is lost because the federal government of Brazil has made tremendous efforts to improve the lives of the marginalized groups in the country so that they can benefit from the national resources. One of the key strategies that the federal government of Brazil has been using to improve the welfare of marginalized citizens is implementing of cash transfers. The number of those who have benefited from the programs has increased from 5 million to 13 million between 2004 and 2013 as explained by the Ministry of Social Development and Poverty Alleviation (Ferrario, 2014, p. 157). The government has implemented conditional cash transfer programs in the country for more than a decade and their benefit to the people is immense.

Impact Of Conditional Cash Transfers on Relative Nutritional Status

Extreme poverty is one of the key challenges faced by many people in Brazil. The situation is so bad in some parts of the country that people cannot afford to buy basic goods, such as food (Manley, Gitter, & Slavchevka, 2013, p. 134). Cases of malnutrition have also been high in some parts of Brazil. Children used to go to school without food, and, in some regions, they were not going to school at all. Hunger was a major challenge for a large percentage of the Brazilian population to a point of that international humanitarian organizations came and helped. In some parts of the country, people used to survive on a single meal a day, and eating a balanced diet was a luxury.

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However, the federal government of Brazil has made remarkable efforts to ensure that those faced with extreme poverty have access to good quality food and a balanced diet (Ferrario, 2014, p. 148). This has been achieved within a short period through the food card program launched by the government in different parts of the country in the past ten years. The beneficiaries of these programs have to be vetted thoroughly to make sure they are genuinely needy people. More so, those who have received funding for food have to make sure they have spent that money to buy food. Certain criteria are used by the government to identify those in need of funding so that they can be issued with food aid cards. For instance, those applying for food aid cards should have small kids, children going to school, and verifiable evidence that they earn less than a dollar per day. That way, the government has been able to minimize cases of extreme hunger and starvation country (Manley, Gitter, & Slavchevka, 2013, p. 134). However, there is still a lot to be done because many people cannot afford a balanced diet meal due to extreme poverty.

Impact of Conditional Cash Transfers on Education

Lack of access to quality education is another major challenge in South American countries and Brazil is not an exception. Poverty is so severe in some parts of the country to an extent that parents cannot afford to pay school fees so that their children can get a basic education. Subsequently, the level of illiteracy is so high in some regions that people do not know how to read and write. This is because children have to work and support themselves and their families at the expense of going to school. In some cases, children are unable to go to school because they cannot afford simple requirements, such as a uniform. In other cases, the uniform might be available, but children are required to go to school without food. These unbearable conditions made many children drop from school and look for work at a tender age. It is determined by the fact that lack of food and low income is still a major problem for many people (Ferrario, 2014, p. 150).

However, the federal government of Brazil has made tremendous efforts to make sure parents are encouraged to take their children to school through conditional cash transfer programs (Estevan, 2013, p. 269). In these programs, parents have to meet certain requirements to qualify for funding. For instance, such parents have to prove that they need financial aid so that they can take their children to school. The condition is that parents who get cash from the government must commit themselves to making sure the children are in school. The number of children going to school determines the amount of cash that a parent will get. It is also mandatory for parents to use these funds to finance the education of their children as a priority, and not other unrelated activities. However, parents can use the funds to pay school fees, buy a school uniform or even buy some food so that their children can have something to eat when going to school (Ferrario, 2014, p. 162).

The government of Brazil has been able to increase the number of children attending schools through conditional cash initiatives and cases of children dropping from school to look for work have decreased in recent years. It is also worth noting that the number of children loitering aimlessly or the so-called “street children” has decreased tremendously because most of the young children are currently going to school. This has also lowered the crime rate in the country during the last decade because young people, who are likely to join crime due to laziness, spend their early years in school and learn how to live a positive life afterward. So far, the federal government of Brazil has made a huge step in ensuring that children can go to school and get basic education irrespectively of the financial backgrounds of their parents (Estevan, 2013, p. 269). However, the number of children not going to school is still alarming, and there is a lot to be done if the government wants to eliminate illiteracy in the country completely.

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Impact of Conditional Cash Transfers on Inequality

The inequality in the allocation of resources has been a major challenge in Brazil for many years. This tendency is partially a result of poor governance and corruption among those entrusted with the responsibility of managing state resources. Consequently, this has resulted in a wealth disparity in the country, whereby the bigger percentage of the population is extremely poor and a small portion of the population is exceedingly rich. This is unhealthy for the economy of Brazil and the government has the responsibility to improve lice of the people living below the poverty line and reduce the level of inequality in the country (Ferrario, 2014, p. 161).

However, the federal government of Brazil has made a tremendous effort to make sure the marginalized citizens have access to state resources and can live decent life. One of the approaches that the federal government of Brazil that make sure those in need of funding get access to the state resources includes conditional cash transfers. The government has been offering financial aid to poor citizens by giving them conditional funds based on their needs. For instance, citizens from areas affected by hunger are given funds to buy food, and parents who do not have the resources to take their children to school are given funds to finance the education of their children (Ferrario, 2014, p. 148). That way the government can distribute state resources to the poor citizens so that they can benefit too. However, this method is limited as conditional cash transfers aim at solving specific problems. There is a need for the government of Brazil to introduce better strategies for distributing state resources and curb the widening gap between the poor and the rich.

Methodology

The purpose of the term paper is to study the effectiveness of conditional cash transfers compared to unconditional cash transfers to determine their application and benefit to the people. The idea is to evaluate the outcomes of conditional cash transfers and unconditional cash transfers in Brazil and Mexico, where conditional cash transfers have been used for the last decade (Ferrario, 2014, p. 148). This is a theoretical study that involves an evaluation of available literature from both countries to determine the success, challenges, and influence of CCTs on the welfare of the people. In this study, information will be obtained from existing reports and literature from both Mexico and Brazil about CCTs.

The analysis part involves a comparison of the data collected from the case study of Brazil and Mexico to determine their effectiveness in both countries. The idea is to analyze if CCTs have been effective in equal parameters in both countries. Additionally, the information obtained from the study of two countries is used to evaluate some of the challenges that may have hindered the implementation of CCTs in both countries and to determine what one country can learn from the other. The intention is to define whether the implementation of CCTs has been successful in both countries and if some aspects need to be improved. Inferences are made from the findings of the study to determine if conditional cash transfers are worth being implemented in other countries. More so, recommendations were made, based on the findings of the study about the areas that need some improvement for CCTs to be more effective.

Conclusion

Based on the findings of the study, it is evident that conditional cash transfers have been very effective and the targeted groups have gained greatly from their implementations For instance, in Brazil, the federal government has successfully used CCTs to reduce the inequalities in the distribution of state resources. The government has improved the welfare of the marginalized groups by giving them conditional cash to solve their problems. In particular, parents from poverty-stricken areas are given funds by the government to finance the education of their children on the condition that such children will go to school. Similarly, the government of Brazil has been able to improve the nutritional value status of poor citizens by providing them with conditional cash cards to buy food. These initiatives have enabled the government of Brazil to reduce cases of malnutrition among children, especially those coming from poor backgrounds. However, it is evident from the study that CCTs cannot be used to eradicate inequality in the distribution of state wealth. The government should come up with better and more practical strategies to ensure there is an equal distribution of state resources. However, when it comes to cash transfers, conditional cash transfers are more effective than unconditional cash transfers.

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