FEATURE STORY

A Model from Mexico for the World

November 19, 2014


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Indigenous mothers and their children in the State of Hidalgo, Mexico

The World Bank

STORY HIGHLIGHTS
  • The Prospera (previously Oportunidades) conditional cash transfer program has benefitted nearly six million families and has been replicated in 52 countries
  • Francesca Lamanna, a social protection specialist at the World Bank, explained how the program works.

The idea was simple enough: give money to a mother to encourage her to send her children to school and to the health center. That simple idea, which began in the 1990s, has now become a nationwide program in Mexico, benefitting 5.8 million families – a fourth of the country’s total population.

The initiative improved school enrolment and nutrition rates of children in the country. More than 50 countries have replicated the model so far.

Previously known as Oportunidades, the program recently expanded its scope: not only is it now called Prospera, but it is also promoting beneficiaries’ access to higher education and formal employment. Additionally, Prospera is facilitating access to financial services, thereby ensuring increased social inclusion of the country’s poorest citizens.

Francesca Lamanna, a social protection specialist at the World Bank, explained how the program works.

What are the main achievements of the Oportunidades Program (now Prospera)?

There are many achievements covering a variety of dimensions of poverty such as nutrition, education and health, as well as monetary poverty.

Oportunidades (now Prospera) is one of the programs most studied and rigorously evaluated by outside institutions. These studies demonstrate the positive impact of the program on school enrolment rates and education levels; significant improvements in nutritional status; and better health prevention. For example, young male beneficiaries of the program have 0.85 years or nearly 10 additional months of schooling, on average, whereas young women participants have 0.65 years or nearly eight additional months of schooling, on average. Moreover, the program has led to a decline of 11.8 percentage points in the incidence of anemia among children under age two.

Studies also reveal the key role of the program in reducing income poverty in rural areas. Up to a third of the decrease has been attributed to the program.

Why has the program worked?

The program has several strengths that have proven crucial during its 17 years of operation.

First, the target population is very well defined: there are clear, transparent mechanisms for selecting beneficiaries.

Second, delivering cash directly to families encourages beneficiaries to send their children to school and to the health center; it alleviates extreme income restrictions to cover food costs; and allows them to make important investments to break the cycle of poverty.

Additionally, the program has a strong presence on the ground, which facilitates more direct communication with the beneficiaries, even in marginalized and remote areas. This enables program staff to detect potential problems and improve social cohesion in the communities.

Finally, it has a very good evaluation agenda that has led to an improved program design over time.

Mexico was one of the first countries to implement a conditional cash transfer program. Has this model worked in other countries?

Oportunidades was the first national conditional cash transfer program targeting poor and extremely poor households and that integrated three basic social rights –health, education and nutrition. The program design included an impact assessment, which demonstrated program results in the short term. This quickly transformed the program into a model for the rest of the world.

Since its establishment in 1997, this model has been replicated in 52 countries around the world in very different contexts: in Latin America, Asia and Africa.

Several factors allowed this model to be replicated in different countries. However, it should be stressed that conditional cash transfer programs have emphasized evaluation, which has enabled their impact to be demonstrated. Additionally, assessment allows for the program design to be modified and adapted according to the circumstances of the beneficiaries and context of each country.

Impacts on poverty reduction, higher levels of education, better nutrition and health have been proven in different contexts, which have lent increasing legitimacy to these activities. The continuous exchange of experiences among different countries in all program stages has been and continues to be crucial for the success of these programs.

Oportunidades recently changed its name to Prospera.  What else has changed?

The program has maintained its basic components, which have demonstrated results over time: nutrition, health and education. With Prospera, these components were strengthened, expanding the health supply to include more interventions and increasing attention to strategies such as early childhood development, ensuring that families living in poverty continue to invest in developing their children’s human capital.

Additionally, -- and this is the most innovative part -- the program has expanded activities to favor the social and productive inclusion of beneficiaries.

To this end, Prospera promotes the linkage of beneficiaries with complementary social and productive programs, expands education services to youth through scholarships for vocational training and favors their access to formal employment through the National Employment Service. Additionally, it promotes financial inclusion through beneficiaries’ increased access to savings, microcredit and insurance.

What are the government’s next steps in terms of social protection?

In this new stage, Mexico is making important investments in the development of policies, programs and key instruments for ensuring an inclusive Mexico.

To this end, the Social Development Secretariat (SEDESOL) is working to develop an integrated social information system to identify who the poor are, where they are and what they need. With the social information system, the government can learn what type of support is needed and which program of the Secretariat or of other sectors exists or should exist to serve the needs of the population.

The development of these integrated social information systems is a key investment to better target government interventions, encourage more efficient government spending and avoid duplications in benefits. In Brazil, the Cadastro Unico has registered information on more than 27.3 million families and is used for more than 20 national programs. Several state and municipal programs also utilize it. This system has been pivotal for a policy of inclusion and equality for Brazilians.

Why is it important to integrate the social protection system in Mexico?

Mexico needs to link its economic policy with its social policy. This is the guiding principle of SEDESOL’s so-called new-generation social policy.

Guaranteeing food security for all Mexicans (through the National Crusade against Hunger), strengthening the development of human capital of new generations of poor families in Mexico; strengthening policies and programs that allow young people to find formal employment; linking Prospera beneficiaries to rural development, financial inclusion and microcredit programs: all of this enables the country to advance in the consolidation of an integrated, inclusive, equitable social program to give opportunities to all Mexicans.