Conditionality (also called conditions and co-responsibilities) require beneficiaries to undertake certain actions, such as ensuring that their children are immunised or attending school, or taking part in parenting classes, in return for receiving their transfers (World Bank, 2018b: 7). The aim is ‘to reduce both short-term food insecurity and the long-term intergenerational transmission of poverty and vulnerability’ by developing human capital (HLPE, 2012: 14; World Bank, 2018: 7). Non-compliance is often met with punitive action (i.e. the transfers are withheld) or with non-punitive responses such as referral or coaching. The former are referred to as hard conditions whereas the latter are referred to as soft conditions. Conditionalities should take into consideration local priorities, supply-side constraints (e.g. availability and quality of education and health services) and local capacity to deliver and monitor (UNDP, 2016: 62) whether beneficiaries are capable of fulfilling conditions.
Regionally, Latin America and the Caribbean has the largest conditional cash transfer budget share – at around 21% of its total social safety net budget, followed closely by sub-Saharan Africa (at around 18%) (World Bank, 2018: 27). Conditionalities should be based on local priorities and consider supply-side constraints (e.g. existing education and health services, or local capacity to deliver and monitor) (UNDP, 2016: 62), as well as whether beneficiaries are capable of fulfilling conditions.
Anecdotal or outdated evidence is often cited that beneficiaries do not use cash ‘wisely’, a narrative that may affect the political and social acceptability of using conditional versus unconditional cash transfers (The Transfer Project, 2017: 1). However, evidence on both UCTs and CCTs shows that beneficiaries use cash in positive ways and mostly in areas that conditions encourage, including health care, education and food. Recent research on large-scale government UCTs in sub-Saharan Africa provides ‘ample evidence’ to refute common misperceptions associated with cash transfer programming, including that cash transfers: ‘(1) induce higher spending on alcohol or tobacco, (2) are fully consumed (rather than invested), (3) create dependency (reduce participation in productive activities), (4) increase fertility, (5) lead to negative community-level economic impacts (including price distortion and inflation), and (6) are fiscally unsustainable’ (ibid.: 1).
There is an intensive debate about the desirability and effectiveness of conditionality. Rigorous evidence is emerging on both sides of the conditionality debate, with no conclusive lessons drawn. Both conditional and unconditional transfers can be effective for example on schooling outcomes (Baird et al., 2013). A review of evidence of cash transfers and children’s outcomes found that the impacts generated by unconditional transfers in sub-Saharan African ‘compare favourably to the impacts of conditional transfers in other regions, including Latin America’ (UNICEF–EASARO/Transfer Project, 2015: 44). A recent review of cash transfers found that ‘of the eight studies directly comparing a CCT to a UCT, six find (somewhat) bigger impacts for education and health and nutrition outcomes for CCTs and/or significant impacts where they are not significant for UCTs (four of these differences are statistically significant)’ (Bastagli et al., 2016: 12). However, the data does not disentangle which aspect of conditions was driving results in most studies (e.g. whether the impact is due to ‘the type of behavioural requirement, communication of the prescribed behaviour, planned response to non-compliance or implementation in practice’) (ibid.). Nevertheless a key finding was ‘the role of people’s perceptions of whether a conditionality is in place or not and of the messaging or communication of desired behaviours in facilitating intended outcomes’ (ibid.). In addition, there is little analysis of the costs and thus cost-effectiveness of conditional versus unconditional cash transfers.
It can be more difficult for some people to comply with conditions (e.g. people with disabilities may find it harder to visit a clinic): hard conditionality penalises the most vulnerable who are least able to meet the conditions, which is counterproductive to the social protection objectives of CCTs.
Conditionality can have specific and negative impacts for women in particular. Conditionality can reinforce social norms that underpin unequal gendered divisions for work and care responsibilities, for paid and unpaid work. For example if conditional cash transfer programmes assign the main responsibility for complying with conditions to women, this perpetuates the perception of women ‘as the sole caregivers responsible for their children’s health and education’ (ILO, 2017: 28). In addition, qualitative research among women conditional cash transfer recipients in Uruguay, Nicaragua, Mexico, and Peru has shown how CCT programmes rely on women’s unpaid labour and can become a burden for participating women, placing unreasonable demands on their time and resources (Cookson, 2018: 5, 8). No CCT programme measures the costs associated with conditionality on recipients, such as transaction and opportunity costs and lack of value placed on women’s time.
Conditions are complex and costly to administer; institutional capacity needs to be considered in their design, in particular for low-income settings like sub-Saharan Africa (Ralston et al., 2017: 24). For example, ‘the feasibility of conditioning will depend on the adequacy of public services, scale-up capacity, cost-effectiveness of “explicit” conditionalities, and political feasibility’ (ibid. citing Pellerano et al., 2014).
The Transfer Project (2017). Myth-busting? How research is refuting common perceptions about unconditional cash transfers (Research Brief 02).
Six common perceptions associated with cash transfers are investigated using data from eight rigorous evaluations of government unconditional cash transfer programmes across seven countries in sub-Saharan Africa. Used in policy debates, these perceptions undermine wellbeing improvements and poverty reduction, in Africa and globally. For example, one common misperception is that beneficiaries will not use unconditional cash transfers ‘wisely’ and that they may result in higher spending on alcohol and tobacco. The report sets out how the evidence refutes each of these claims.
Bastagli, F., Hagen-Zanker, J., Harman, L., Barca, V., Sturge, G., & Schmidt, T. (2016). Cash transfers: What does the evidence say? A rigorous review of programme impact and of the role of design and implementation features. London: ODI.
For description, see Poverty, inequality and vulnerability – Key texts.
Baird, S., Ferreira, F. H. G., Özler, B., & Woolcock, M. (2013). Relative effectiveness of conditional and unconditional cash transfers for schooling outcomes in developing countries: A systematic review (Campbell Systematic Reviews 2013:8). The Campbell Collaboration.
This systematic review finds that both conditional cash transfers (CCTs) and unconditional cash transfers (UCTs) improve the odds of being enrolled in and attending school compared to no cash transfer programme, but the effectiveness of cash transfer programmes on improving test scores is small at best.
Fiszbein, A., & Schady, N. (2009). Conditional cash transfers: Reducing present and future poverty (World Bank Policy Research Report). Washington, DC: World Bank.
Do conditional cash transfer programmes (CCTs) succeed in reducing inequality? Are they effective in producing better development outcomes? This 400-page report argues that CCTs have been effective in redistributing income to the poor, while recognising that even the best-designed and best-managed programme cannot fulfil all the needs of a comprehensive social protection system. Evidence suggests that to maximise their potential impact, CCTs should be complemented with other interventions, particularly those that focus on outcomes rather than the use of services alone. CCTs represent the best means of redistribution when: poor households do not sufficiently invest in the human capital of their children, and when political realities necessitate that redistribution be conditioned on good behaviour.
Evans D. K., & Popova, A. (2014). Cash transfers and temptation goods (World Bank Policy Research Working Paper 6886). Washington, DC: World Bank.
Molina Millán, T., Barham, T., Maluccio, J., & Stampini, M. (2019). Long-term impacts of conditional cash transfers: Review of the evidence. The World Bank Research Observer, 34(1), 119–159.
Article/blog: Hemsteede, R. (2018, 24 January). Conditional or unconditional cash transfers? From ideology to policy dialogue. Socialprotection.org