Growing demand for social safety nets

Demand for well-designed safety net programs to assist poor families is growing across the developing world, as 2009 develops into a year of tough economic challenges.

Governments are concerned that the financial crisis could turn into a humanitarian one, especially for poor households already hit by the recent food and fuel crises.

Conditional cash transfer (CCT) programs

CCT programs offer qualifying families cash in exchange for commitments such as taking babies to health clinics regularly or sending children to school.

These programs, now found in over two dozen countries, can reduce poverty both in the short and long term, particularly when supported by better public services.

World Bank support to CCTs

In response to the food and financial crises, the World Bank expects to lend about $2.4 billion in 2009 to start or expand CCTs in Bangladesh, Colombia, Kenya, Macedonia, Pakistan, and the Philippines.

The World Bank provides technical support on CCTs to both national governments and donors.

CCTs help reduce poverty & hunger

CCT programs help to reduce poverty in participating households and to protect them from the worst effects of unemployment, illness, or other income shocks.

Participating households also tend to spend more on food and improved nutrients than comparable households who donít receive the transfer.

CCTs help children study rather than work...

CCTs help keep children in school. For example, Mexicoís Oportunidades program decreased the drop-out rate between 6th and 7th grade by 9 percentage points.

These programs have decreased child labor in many countries. In Cambodia, the average child receiving the transfer was 10 percentage points less likely to work for pay.

...and boost preventive health care

CCTs have boosted the use of preventive health care services in Colombia, Honduras, Mexico, and Nicaragua by between 8 and 33 percentage points.

Encouragingly, many of these improvements have been concentrated among the poorest households.

But CCTs canít work in isolation...

In some countries like Cambodia and Mexico, higher school enrollment rates have not been matched by better performance in learning tests.

CCTs need to be supported by higher-quality education and health services and by giving children a head start through better nutrition or preschool programs.

...and they donít reach all poor people

CCT programs are mainly intended to support poor households with children.

They should be supplemented by other transfer programs such as social pensions or workfare to provide social protection to all vulnerable groups.