Impact Evaluation of a Conditional Cash Transfer Program: The Nicaraguan Red de Proteccion Social

Abstract

In the 1990s Mexico launched a new social program—PROGRESA (now known as Oportunidades). As a conditional cash transfer program, PROGRESA integrated investment in human capital with access to a social safety net. From 1998 to 2000, the International Food Policy Research Institute (IFPRI) assisted in evaluating the program. Much of the ensuing research is summarized in IFPRI Research Report 139 by Emmanuel Skoufias. Since the inception of PROGRESA, several countries, particularly in Latin America, have implemented similar programs. One reason for the growing popularity of these programs is that, by encompassing various dimensions of human capital, including nutritional status, health, and education, they are able to influence many of the key indicators highlighted in national poverty reduction strategies. One of these pilot programs, the Red de Protección Social (RPS), modeled after PROGRESA, was begun in Nicaragua in 2000. IFPRI conducted a quantitative impact evaluation of this program. Findings show that the program was effective in several domains, largely erasing differences in health-care and schooling outcomes across expenditure groups. Moreover, the program overcame obstacles found in the lower-income settings of Nicaragua, compared to Mexico, Colombia, or Brazil. One unique aspect of RPS was its approach to health-care supply. Government-contracted private providers supplied the services rather than the Ministry of Health. The results show that such an approach can be an effective delivery mechanism in areas where government provision might prove difficult. In late 2002, based in part on the positive findings of the various evaluations, the government of Nicaragua and the Inter-American Development Bank agreed to a continuation and expansion of a modified program for three more years. IFPRI remained involved in the evaluation of that second phase, including a qualitative evaluation, and the results continued to show that the program was effective in a number of important areas. Nevertheless, at this writing the future of the program is uncertain. Rigorous evaluations are important components of the policymaking process, but they are not the only ones.

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