Impact evaluation of a conditional cash transfer programme in Nicaragua

In this article, John Maluccio and Rafael Flores present the results of a quantitative assessment of the impacts of the "Red de Proteccion Social" programme (RPS) or social safety net. The programme aims to alleviate poverty via cash transfers mainly to poor households, which is a short-term solution to reducing poverty. The transfers are more particularly concerned with investments in human capital, which is a long-term solution to reducing poverty. The transfers are conditional. Households are monitored to see whether they are really complying with guidelines which will encourage the growth of human capital in their children. The pilot scheme started in 2000, with a budget of 11 million US dollars. In 2002, the programme was extended for three more years for a further 22 million US dollars. The RPS seems to have had a positive impact on several points:

• Household spending has increased by 18%, and most of this money has been spent on food.
• Spending on education has also increased significantly.
• The RPS was particularly useful in the economic crisis faced by the communities.
• School attendance increased substantially (enrolment by 13% and presence by 20%) and the number of children earning money dropped.
• Participation of under 3s in the VPCD health programme increased by 16%, and the health services themselves improved.
• There was improvement in the nutritional status of children under 5. This evaluation concludes that the programme was effective and could be extended to other rural areas of Nicaragua.