Brazil, Peru demonstrate broad benefits of cash transfer programs

Conditional cash transfer (CCT) programs have lifted millions out of extreme poverty, especially in South America. But what makes these programs so valuable is that they're also delivering a broad range of improved health outcomes, including improving stunting and the lives of women.

Some experts suggest CCT programs – which seek to alleviate poverty by providing cash in exchange for adopting and documenting behaviors, usually to improve the health of children in a family – create a powerful virtuous cycle by amplifying social protections, such as "policies and programs needed to reduce the lifelong consequences of poverty and exclusion." Both the cash and these protections empower women in the poorest households to take previously unavailable steps to protect their children’s health.

In Peru, Exemplars in Global Health researchers found that the country's CCT program Juntos (Together) helped reduce the number of stunted children from two million to 370,000 in less than a decade. Juntos boosted health-seeking behavior among Peru’s poorest families by requiring participating women to enroll their children in school, attend health and hygiene education sessions, obtain identify cards for their children, and follow a rigid schedule of health checks for young children and pregnant women all in exchange for 200 Peruvian Soles (US$63) every two months. That amount totals about 10 per cent of poor household’s average monthly expenses.

Dr. Luis Huicho, a professor at the Universidad Peruana Cayetano Heredia in Lima, said the arrangement both incentivized and empowered the country’s poorest women to better care for their families by making them the direct beneficiaries of cash transfers. Huicho said Juntos “has been instrumental in empowering women, particularly rural women of the poorest sectors of our society. Women's empowerment is a potent and powerful tool to improve the wellbeing of families and to ensure their future.”

Brazil’s Bolsa Familia (Family Allowance), the world’s largest CCT program which covers 13 million families – and nearly 40 million people – pays families between 89 and 250 Brazilian Reals (US$17-US$48) per month, and is estimated to have lifted more than 16 million Brazilians out of extreme poverty since its inception in 2003. As was the case with Peru, reductions in stunting have been linked to Bolsa Familia. And, as has also been the case with Peru, the program has positively affected women.

“Research has shown that the empowerment of women in a family has huge benefits in several aspects,” said Dr. Mauricio Barreto, Senior Investigator at FIOCRUZ and Co-Founder and Director of Cidacs, the Center for Health Data and Knowledge Integration. “There has even been a reduction in domestic violence,” he said, adding that programs like Bolsa Familia have also enabled women in Brazil to have a more dignified, participatory role in society.

Considered together, these programs not only highlight the role of women’s empowerment in health-seeking behavior but also underscore the importance of the social determinants of health, Huicho said. He explained that before Juntos was launched in 2005, Peru’s stunting reduction programs “focused on providing food assistance and medical care, on the assumption that stunting was a medical problem, due to lack of food only, and that was a gross mistake.”

Juntos’ multi-sectoral and intersectoral approach, with its focus on delivering the poorest Peruvians maternal and newborn childcare, vaccinations, preventive care, supplementation, as well as health education for mothers and the requirement of primary education for their children, presented a dramatic shift. And, while stunting reduction has not been uniform across the Andean nation, the lowest wealth quintiles – recipients of cash from Juntos – have seen the greatest improvements.

But it’s also not only about cash, said Dr. Romulo Paes de Sousa, Senior Investigator at Brazil’s FIOCRUZ, and former Deputy Minister of Social Development. “There’s been a perception that it is all about money, it's all about cash transfers. Even with this current government, it downplays the problem: ‘if we transfer cash we can solve everything, or maybe we can add to some initiatives for producing employment or helping people to get job, we solve everything.’ The big idea of vulnerability, about all different types of problems related to integration vanish because they are all focusing on cash transfers. In some way it overshadows the other necessary programs related to social protection,” he said.

For Brazil, Barreto said, increasing social protections through various social programs allowed Brazil to achieve in 2017 a rate of 7 percent in stunting. “This was achieved by a lot of different things that happened, Bolsa Familia but [also] other things, other improvements in society, education, improvements in minimum wage, health programs, vaccinations that decrease illness in kids. Then a lot of different improvements in sanitation. There are a lot of programs that, put together, give you this path,” he said.

CCTs are designed as part of the path out of poverty, in particular extreme poverty and inter-generational poverty, but they are not a silver bullet. And no CCT program is perfect. Paes de Sousa noted that despite Bolsa Familia being a model for CCTs in 90 countries worldwide, it still has shortfalls, including the lack of integration with Brazil’s indigenous population, which is not always financially integrated in the country’s banking system through which Bolsa Familia transfers are made.

CCTs are, however, by their very nature, monitorable. And as importantly, scalable. Paes de Sousa used an example of addressing undernutrition through fortified supplementation, one of the many stand-alone interventions used to help nutrition efforts.

“Think about producing powdered milk. You need big public facilities for producing that, but it's a complex program because you have to make the milk, process it, and then think about distribution,” he said, noting the challenges found in supply chain to delivery. A faster alternative, he said, that allows more families to purchase more and better food, are CCTs. “There's not anything so simple as cash transfer,” he added.

And for him, the cash, the extension of social protections, and the empowerment of women starts leveling the playing field. “We have to reduce inequality because if we don't do that, we will continue to be in this level of heterogeneity where we have one part of the world very connected to a global perspective while we have another part stuck in the 19th century. It's not just about money or getting jobs,” he said, adding that it's about the ability to live healthfully.