Regional Conference on Public Sector Management
in Support of the Millennium Development Goals
13-15 June, Bangkok, Thailand
Institutional Framework and
Management Arrangements for
Cash Transfer Programs
Joel Mangahas
Human and Social Development Division
Southeast Asia Department
Asian Development Bank
1
Presentation Outline
Rationale for cash transfers
Examples of cash transfers and beneficiaries
Roles and impacts of cash transfers
Policy context, institutional framework, and
addressing capacity gaps
Alternative social transfer instruments
Defining the appropriate management
arrangements
2
Rationale for Cash Transfers
Cash transfers are direct, regular, and predictable
non-contributory cash payments that help poor
and vulnerable households to raise income,
smooth consumption, and sustain spending on
food, schooling, and healthcare
Over time, transfer income can help build human
capital, save up to buy productive assets, and
obtain access to credit
Help prevent households from suffering shocks
Transform relationships within society, and
between citizens and the state
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Rationale for Cash Transfers
Since the 1990s, governments in the
developing world invest increasingly on
large-scale cash transfer programs
Reduce transitory poverty in the wake of
increased exposure to vulnerabilities that can
push many people into poverty
Help people move away from chronic, often
intergenerational poverty by leveraging gains
in human development outcomes and
accelerating progress towards MDG targets
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Examples of Large-Scale
Cash Transfer Programs
Source: DFID 2011
5
Roles of Cash Transfers
Source: Conway, et. al., 2011
6
Roles of Cash Transfers
Role
Objective
Target Beneficiary
Other Instruments
Prevention
Prevent shocks from causing
irreversible damage to the
productive capacities and human
development of vulnerable
households
Vulnerable (poor and
near-poor); the
transitory poor
Social insurance; school
feeding; short-term
public works
Protection
Alleviate extreme poverty by
raising living standards to a
minimum acceptable standard
Chronic poor
In-kind transfers;
vouchers; social
services; school
feeding; public works
Promotion
Improve capabilities and
opportunities for poor and
vulnerable households; Enable
households to avoid low-risk, low
productivity traps and work their
way out of poverty
Economically active
poor and vulnerable
near-poor
Vouchers or subsidies;
public works; school
feeding
Transformation
Change power relations that
exclude certain social groups
from economic opportunities and
access to public services
Socially marginal or
excluded groups;
women and children
Legislative and
regulatory protection
Adapted from Conway, et. al.,2011
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Examples of Conditional Cash Transfer
Program Objectives, Conditions, and Results
Source: Samson, et. al., 2010
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Examples of Conditional Cash Transfer
Program Objectives, Conditions, and Results
Source: Samson, et. al., 2010
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Impact of Cash Transfers
Results Areas
Strength of
Evidence
Raising living standards
• Directly reduces poverty, hunger, and inequality
• Helps households sustain and improve livelihoods in the face of
vulnerability and shocks
Very
consistent
evidence
Human development
• Improves quantity and quality of food consumption (child
nutrition and development)
• Helps households make use of education and health services
(supporting access costs, reducing need for child labor, and school
dropout)
Growing
body of
positive
evidence
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Impact of Cash Transfers
Results Areas
Economic development and inclusive growth
• Facilitates structure reforms supporting long-term growth
• Helps households escape low risk, low productivity poverty traps
• Helps build household savings for investment
• Raises household savings with multiplier effects and in (middle
income countries) potential role for fiscal stimulus
Strength of
Evidence
Strong logic,
but with
limited
evidence to
date
Empowerment and gender equality
• Empowers women within households and communities
• Empowers poor individuals and households to make their own
decisions
Climate change and natural disasters
• Helps reduce and mitigate risks of shocks as well as cope with
shocks that occur
Social cohesion and nation building
• Reduce inequalities that contribute to social fragmentation,
crime, and political instability
Adapted from Conway, et. al., 2011
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Social Policy Context and
Management Arrangements
Source: Samson, et. al., 2010
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Institutional Framework for
Cash Transfers
Effective interventions involve several agencies of
the national government, often including:
Relevant social welfare ministry
Ministry or ministries responsible for women, children,
ethnic groups, or persons with disabilities
Labor ministry
Ministries responsible for basic social services such as
health and education
Finance or budget ministry and planning agency
Local government units also participate in the
process
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Key Elements of an Appropriate
Institutional Structure
Overall policy coordination process that
ensures coherence and integration of
program components, including a strong
monitoring and evaluation function
Policy design and implementation functions
within the relevant ministries and other
government bodies
Cross-cutting delivery institutions,
mechanisms or structures that ensure
efficiency and effectiveness
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Examples of Management
Arrangements
Brazil – centralized payment functions
through a national bank; national set of
policies, procedures, and systems, but
decentralized delivery capabilities, with an
operational presence close to the
beneficiaries
Ghana – strong national system that includes
a single registry and coordinating committee
Pakistan - adopted a single registry
management information system for
conditional cash transfers to children
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Examples of Management
Arrangements
Columbia – an executing office reporting
to the Office of the President implements
the country’s cash transfer program
Mexico – program is implemented by a
financially independent agency with a
reporting structure that includes the
Ministry of Social Assistance, the Ministry
of Education, and the Ministry of Health
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Institutional Capacity Issues
Conditional cash transfers and public works
programs require greater administrative burden
and capacity than unconditional programs
Government capacity needs depend on financing
arrangements – greater stress on administrative
systems under fragmented and uncoordinated
funding conditions
When government capacity is inadequate –
enhance the capacity and/or tap non-state actors
Private sector companies may face disincentives to
serve the poor effectively
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Institutional Capacity Issues
Capacity building requirements in many
developing countries involve the following:
Increased capacity for data gathering and
analysis for making evidence-based policy
decisions
Design and implementation capacity at the
national level
Delivery capacity at the local level
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Building Capacity for Cash Transfers
Building capacity for
evidence-based
policymaking
National-level design
and implementation
capacity
Local –level delivery
capacity
• Inter-regional
evidence and lesson
sharing
• Technical expertise in
policy analysis
• Within-country crossministerial linkages
• Targeting mechanisms
• Delivery systems
• Fiduciary risk
management
• Monitoring and
evaluation systems
•
•
•
•
Delivery infrastructure
Human resources
Training
Communications
Source: Samson, et. al., 2010
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Defining the Appropriate Social
Transfer Instrument
Source: Samson, et. al., 2010
20
The Social, Policy, and Institutional
Context and the Choice of Instrument
Source: Samson, et. al., 2010
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Distributing Responsibilities Across
National and Local Levels
Source: Samson, et. al., 2010
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An Example of Division of Responsibility
Across Levels of Government
The national (federal) government
determines whether targeting is desirable
and designs the targeting system
Municipalities collect the data (appropriate
financial provisions and technical assistance
are provided by the national government
State of provincial governments check the
information and provide any required
validation and reporting on irregularities;
compiling a state or provincial level database
for consolidation into the national system
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An Example of Division of Responsibility
Across Levels of Government
National government checks the
databases provided by the state or
provinces, and verifies this against any
available national databases
National government conducts random
audits and quality control reviews in
fulfillment of its national oversight
responsibilities for local data collection
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Institutional Linkages in
Brazil’s Single Registry (Cadastro Unico)
Source: Samson, et. al., 2010
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Takeaways
No one best management model or
arrangement – depends on the country
context and circumstances
The simpler the cash/social transfer program
is, the less complicated the management
process will be
Institutional responsibilities may shift over
time
Strong coordinative mechanisms, governance
systems, and addressing capacity gaps are
essential to effective implementation
No perfect systems
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Takeaways
Decentralization enables the system to reflect
local preferences and situations
Financing is a fundamental issue to consider
Overall financial requirements
Determining the amount of cash transfer
Determining the degree of decentralization
Centralization can provide support to a
variety of efficiencies and economies
Assign responsibilities based on relative
strengths and capacities
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Takeaways
Government
Evaluation
Systems;
Impact
Evaluation
Government
Monitoring
Systems;
Program
Monitoring
National
Development Plan;
Poverty
Reduction/Social
Protection Strategy;
Program Plan
Cash Transfers:
Specific targets
for reducing
poverty and
vulnerability
National
Budget; Multiyear
Financing;
Program
Budget
Framework for
Interagency
Coordination;
Implementation
Arrangements
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Key References
Arnold, C., T. Conway, and M. Greensdale (2011). Cash Transfers Literature
Review. Department for International Development, London.
Labonne, J. (2011). “The local impacts of conditional cash transfers”.
Unpublished manuscript, Oxford University
Rawlings, L.B. and G. Rubio (2005). “Evaluating the Impact of Conditional
Cash Transfer Programs“, The World Bank Observer, 20 (1), pp. 29-55
Samson, M., I. van Niekerk, and K. Mac Quene (2010). Designing and
Implementing Social Transfer Programmes. Economic Policy Research
Institute, Cape Town.
Soares, F. B. and E. Silva (2010). Conditional Cash Transfer Programmes
and Gender Sensibilities: Case Studies of Brazil, Chile, and Columbia.
International Policy Centre for Inclusive Growth, United Nations
Development Programme, Brazil.
Soares, S., et. al. (2007). Conditional Cash Transfers in Brazil, Chile, and
Mexico: Impacts Upon Inequality. International Poverty Centre, United
Nations Development Programme, Brazil
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Thank you!
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