Oportunidades

The origins of Oportunidades date back to 1995 when, as a response to the social fall-out of the Tequila Crisis, a ‘new breed’ of targeted social programme was piloted in the Mexican state of Campeche (Bate, Reference Bate2007a). The pilot broke from traditional forms of social assistance in two key ways: benefits were provided as small amounts of cash instead of in-kind; and the beneficiaries (in this case, pregnant and lactating women) were required to attend regular health check-ups. This is one of the first examples of what soon came to be known as ‘conditional cash transfers’.Footnote ⁴ Due to its apparent success, in 1997 the scheme was upgraded to a national programme initially known as Progresa. Following a change of government in 2002, the programme was re-branded as Oportunidades but remained in essence the same.

The architects of Progresa/Oportunidades were concerned with providing short-term income poverty relief to the country's poorest rural households as well as promoting the formation of human capital as part of a longer-term development strategy. In simple terms, this means giving mothers small amounts of money (thus reducing poverty and promoting consumption) on the strict condition that their children regularly attend school (thus promoting human capital). The programme includes a number of other important conditionalities related to health promotion: mothers (and beneficiaries are almost exclusively mothers) are required to take their children for regular health checks and attend various health education workshops. It also requires that mothers perform a range of menial duties such as cleaning or clearing rubbish. The human development rationale for this particular conditionality is less obvious, and following widespread complaints from mothers, the required number of work hours was cut (Molyneux, Reference Molyneux2006).

In return for their compliance mothers are paid a bi-monthly cash benefit, which has a number of separate components. The most significant is a ‘scholarship’ rewarding children's attendance at primary and secondary school. The value of this component varies with larger payments for girls and for higher levels of education. A separate nutritional benefit worth around US$15 a month is paid for all children aged between four months and two years, malnourished children aged between two and four and to pregnant and lactating women. On average, households receive about US$45 dollars a month from the different components (Moreno-Brid and Pardinas Carpizo, Reference Moreno-Brid and Pardinas Carpizo2007).

Oportunidades is targeted in three stages. First, rural districts with high levels of poverty according to available survey data are identified. Only districts that are deemed to contain an adequate infrastructure of basic government health and education services are included in the programme. The inclusion of zones lacking this infrastructure is deferred until it is put in place: somewhat worryingly, information about the number of zones in this category is unavailable. Within the selected zones households are identified using census data on income poverty. Finally, community meetings aim to ‘filter’ the selected families on the basis of other unspecified criteria. Participating households are re-evaluated every three years. Despite this complex targeting mechanism, the programme's coverage is quite broad: by 2000, Oportunidades was providing benefits to around two and a half million households. In 2001, the Inter-American Development Bank approved a US$1 billion loan (the largest in its history) for the extension of Oportunidades into urban areas. This led to an increase in coverage to around five million households, representing about a quarter of the country's total population.

Unlike most traditional social assistance programmes, Oportunidades has been regularly, and in some cases independently, evaluated. Some earlier evaluations were able to compare communities enrolled in the early stages of the programme to ‘controls’, which were enrolled later on (Rawlings and Rubio, Reference Rawlings and Rubio2005). Almost unanimously, these evaluations have lauded the programme's unprecedented success in meeting both its poverty reduction and human capital objectives. Oportunidades has been widely viewed as a model social programme for Latin America and beyond, and comparable programmes are now operating in a large number of countries. The apparent success of the Oportunidades approach appears to have been confirmed by Brazil's similar experience with conditional cash transfers such as the Bolsa Escola (Cardoso and Souza, Reference Cardoso and Souza2003).

Jefes y Jefas de Hogares

Traditionally, Argentina has had one of the more embracing welfare systems in Latin America, with a particularly strong social insurance component. A history of relative prosperity and social equality was reflected in a good infrastructure of basic state health and education services (Lo Vuolo and Barbeito, Reference Lo Vuolo and Barbeito1993). Although the quality of these services appears to have fallen over the past few decades, the country still has good levels of school enrolment and utilisation of primary health care. It is not surprising, then, that Argentina's social programmes have not followed the basic human capital formation approach of Oportunidades. Instead, the main concern has been with unemployment and short-term poverty relief.

Jefes y Jefas de Hogares (JJH, which translates as ‘male and female heads of household’) was established immediately after the severe economic crisis which hit the country in December 2001. It was initially conceived as a short-term safety net programme, responding to a sharp rise in unemployment and income poverty. Monthly cash benefits of 150 pesos (about one half of average household per capita income in 2002Footnote ⁵) were distributed to unemployed household heads with at least one dependent child (aged 18 or under) or a dependent disabled person. Unlike Oportunidades, there was no explicit target based on an income threshold. By the end of 2002, around two million households (roughly 12 per cent of all Argentine households) were included in the programme (Galasso and Ravallion, Reference Galasso and Ravallion2003).

The original plans for JJH did not envisage elements of conditionality. However, these were quickly introduced, partly at the behest of the international development banks, which were providing about a third of the funding (Galasso and Ravallion, Reference Galasso and Ravallion2003). Theoretically, participants were required to do 20 hours a week of community work, training, education or employment in a state agency or private company. These activities were to be monitored by municipalities and local Ministry of Labour offices. On paper, at least, JJH came to resemble a Workfare-type programme.

Initially, JJH was projected to run until the end of 2002. This was later extended to 2003, and with subsequent extensions the scheme has been allowed to continue until the present day. Due to the country's rapid economic recovery, the number of beneficiary households fell steadily, to 1.7 million by 2004 and one million in 2006 (CONAEyC, 2004; Rodríguez Enríquez and Reyes, Reference Rodríguez Enríquez and Reyes2006). Despite this, it is recognised that JJH has evolved from a short-term safety net intervention to a central component of the new Argentine welfare system (San Giovanni, Reference San Giovanni2007). Recognising this shift, there have been attempts to shift the emphasis away from emergency unemployment relief to human capital promotion, and since 2006 JJH beneficiaries have had to re-affiliate to one of two new programmes (Rodríguez Enríquez and Reyes, Reference Rodríguez Enríquez and Reyes2006). The Plan for Family Social Inclusion is very similar to the main component of Oportunidades. Conditionality focuses on children's school attendance and compliance with health checks, and there is no work requirement. Alternatively, the Employment and Capacity-building Insurance Scheme follows the Workfare model, with strict employment and job-seeking criteria, managed through a new network of municipal job centres. Thus, JJH has been changed from a catch-all safety net into two schemes, which fit more neatly with the prevailing models of social protection and Workfare.

Brazil's social pension programmes

Social pensions represent a third, distinct approach to cash transfers, which have also gained profile as a poverty-reduction strategy. The largest and best-established example comes from Brazil. As in most Latin American countries, Brazil's pension schemes have been traditionally organised on Bismarckian social insurance principles (World Bank, 2001b). Generally speaking, these programmes were limited to formal sector workers and coverage was therefore restricted to a relatively privileged minority of the older population. As the proportion of retirees to workers increased, initial pension fund surpluses became large deficits that were mainly financed by emergency transfers from general revenue. Consequently, from the early 1990s the region's pension programmes have come under intense scrutiny and, in many cases, have seen substantive reforms (Mesa-Lago and Muller, Reference Mesa-Lago and Muller2002).

In Brazil, limited social assistance pension programmes for rural workers date back to 1963, but the scheme was substantially up-graded in 1991 with the creation of the Prêvidencia Rural programme. Pensions worth approximately US$60 a month are awarded to men aged 60 or over and women aged 55 or over who have previously worked in agriculture, fishing or mining. Unlike most other social assistance pension schemes in the region, there are no means or activity tests, and women are entitled to the pension independently of their spouse's status. By 2002, the scheme was paying out around 6.5 million benefits. In 1993 a separate means-tested scheme, the Beneficio de Prestação Continuada (BPC), was established for retired urban workers aged 67 and over. In January 2004, the age of eligibility for the BPC pension was reduced from 67 to 65 years and the number of benefits awarded trebled to around two million (Camarano and Pasinato, Reference Camarano, Pasinato and Camarano2005).

The scale of social pension programmes in Brazil is much larger than elsewhere in Latin America, but most countries have established or up-graded more limited interventions along similar lines. From 2006, a limited means-tested social pension for people aged 70 and over has been incorporated into Oportunidades. Argentina established a relatively embracing safety net pension for older people in the wake of the 2001 crisis. Examples of social pensions can even be found in relatively poor countries, such as Bolivia, where an annual flat payment of around US$200 is made to those aged 65 and over. Latin America's experience with social pensions has contributed to their growing profile in development policy more generally (DFID, 2006; HelpAge International, 2006). While the non-conditional nature of these transfers makes them fundamentally different to Oportunidades and JJH, many of the claims and assumptions about their impacts bear distinct similarities.

Administration and targeting

It is sometimes claimed that the new social programmes are better targeted, less exposed to corruption and cheaper to run than previous efforts at social assistance (Rawlings and Rubio, Reference Rawlings and Rubio2005). Evaluations of Oportunidades make this point particularly forcefully, drawing attention to a number of key safeguards. These include contracting out cash management to commercial banks (which are understood to be less corrupt than state agencies) and prohibiting the award of new benefits in periods around elections (Bate, Reference Bate2007b). However, agencies specialised in monitoring corruption have reported cases of abuse, including using the threat of benefit withdrawal to influence voting in the 2000 presidential election (Anti-Corruption Resource Centre, 2007). Also, there is evidence that the filtering process used by Oportunidades has promoted tensions and conflict within rural communities (Handa and Davis, Reference Handa and Davis2006). Community filtering may be especially problematic in urban areas where local structures are less well developed. Despite these problems, the sheer scale of the programme helps it to reach a large share of impoverished households. It is claimed that a policy of limited staffing levels has restricted Oportunidades’ administration costs at 6 per cent of its total budget (Bate, Reference Bate2007b). This compares to around 15 per cent for Mexico's main social insurance fund in the early 1990s (Barrientos, Reference Barrientos1998).

Targeting procedures for JJH are less sophisticated: applicants are simply required to give a sworn statement that they are an unemployed head of household. However, the unregulated nature of the informal labour market has hindered the verification of applicants’ employment status. Although the programme's title refers to both male and female heads of household, it was expected that the great majority of beneficiaries would be male ‘breadwinners’. Levels of male participation in salaried activities before the crisis were substantially higher than women's, yet data for September 2002 revealed that 68 per cent of JJH claimants were women. The World Bank assessment of the scheme concluded that the large number of women, most of whom had not been working before the scheme was established, could be seen as a failure of targeting (Galasso and Ravallion, Reference Galasso and Ravallion2003). Overall, it estimated that a third of recipients did not meet the eligibility criteria. There are also indications that the scheme was exposed to political interference. While around 15 per cent of Argentinians are affiliated to a political party, the figure rises to 50 per cent for participants in JJH (San Giovanni, Reference San Giovanni2007). The process of assessing applicants for JJH has been largely unaccountable, with no formal mechanisms for complaints or for obtaining reasons for exclusion.Footnote ⁶ Official data suggest that around 5 per cent of JJH's budget is devoted to administration (World Bank, 2006). Since the programme is mainly run through local municipalities, which have a reputation for poor governance, these data are far from reliable.

Surveys of Brazil's social pensions suggest that they have been relatively well targeted, with the great majority of eligible older people receiving benefits (Lloyd-Sherlock, Reference Lloyd-Sherlock2006). The means-testing for the urban pension is somewhat haphazard, and there are anecdotal claims that eligibility criteria may have sometimes been stretched, especially in the poorer parts of the country (Lloyd-Sherlock, Reference Lloyd-Sherlock1999). Since 2001 Brazil has been developing a unified database for its various social assistance programmes, including the social pensions and the Bolsa Escola. It is hoped that this will both improve targeting and reduce the costs of administering these programmes (de la Briere and Lindert, Reference de la Briere and Lindert2005).

Poverty impact

All three of the programmes share the objective of reducing income poverty among their target populations. While it is hardly surprising that giving a household member a regular monthly cash benefit will affect income poverty levels, the degree of impact depends on the precision of targeting, the depth of the poverty gap and the value of the benefits. Obtaining accurate data for the poverty effect is not straightforward, as it is necessary to take into account the opportunity costs of conditionality, especially for Workfare-type programmes such as JJH. The most robust assessment of JJH's poverty impact concluded that, once opportunity costs were considered, the overall effect on the prevalence of poverty was quite small (Galasso and Ravallion, Reference Galasso and Ravallion2003). By 2006, 90 per cent of beneficiary households were still below the poverty line, and it was calculated that the payment represented only 15 per cent of the basic living costs of an average household (Rodríguez Enríquez and Reyes, Reference Rodríguez Enríquez and Reyes2006).

Despite the many evaluations of Oportunidades, hard and fast data on its poverty impact are hard to come by. In 2006 reassessment of beneficiary households identified that only 20,000 no longer qualified for the programme, either because over the previous three years they had moved out of poverty or their children were now too old to be eligible for the benefit. This represents only 0.4 per cent of beneficiary households, suggesting that the programme's impact on overall poverty rates is negligible (Moreno-Brid and Pardinas Carpizo, Reference Moreno-Brid and Pardinas Carpizo2007). Even so, Oportunidades may have reduced the intensity of poverty for those still experiencing it. For example, the programme has been shown to have boosted household food consumption and average calorific intake, which was assessed to be 8 per cent higher than in the controls (Rawlings and Rubio, Reference Rawlings and Rubio2005).

The conditionality effect does not apply to Brazil's social pension, but even here the findings are complex. While all surveys show a poverty reduction effect, it varies geographically, with much larger effects in poorer regions (Delgado and Cardoso, Reference Delgado, Cardoso and Camarano2005; Barrientos, Reference Barrientos2003). Overall, the prevalence of poverty for households containing older people is significantly lower than the national average. The opposite pattern was found in Mexico before the recent extension of social pensions there (Wong and Parker, Reference Wong and Parker1999).

Human capital effects

Promoting human capital is a central goal of schemes such as Oportunidades, and it is often claimed that there is strong and irrefutable evidence that is has succeeded (DFID, 2006). Numerous evaluations of Oportunidades have indicated significant impacts on school enrolment levels, especially for girls and for secondary schools. However, the effects on school attendance were less clear-cut (Rawlings and Rubio, Reference Rawlings and Rubio2005). There is no evidence that Oportunidades has improved learning outcomes, although several evaluations specifically looked for this effect (Handa and Davis, Reference Handa and Davis2006). Although Brazil's social pensions do not set out to promote human capital, one widely cited survey concludes that household access to the rural pension is significantly associated with girls’ school enrolment, particularly when the pensioner is a woman (de Carvalho Filho, Reference de Carvalho Filho2000). To be eligible for JJH, household heads need to provide evidence that their children regularly attend school. However, levels of enrolment were already high, and there has been no attempt to assess any impact.

Given its terms of conditionality, it is not surprising that Oportunidades saw a significant increase in mothers’ attendance at health education workshops. More saliently, the scheme appears to be associated with significant improvements in child health and physical development. For example, one survey found that the incidence of childhood illness was 12 per cent lower than for the control communities (Rawlings and Rubio, Reference Rawlings and Rubio2005). JJH affiliates have to comply with national vaccination plans. However, limited access to vaccination appears to have been more a supply-side issue than a consequence of limited knowledge or willingness on the part of mothers (Stillwaggon, Reference Stillwaggon1998). Several evaluations show that Brazil's social pensions facilitate older people's access to health services and permit the purchase of necessary drugs (Lloyd-Sherlock, Reference Lloyd-Sherlock2006; Schwartzer and Querino, Reference Schwartzer and Querino2002). The extent to which pension benefits are used to invest in the health care of other household members such as children is less clear.

Human capital formation may also entail promoting employment and the development of appropriate work skills. This was the primary human capital strategy of JJH, whose official website begins with a mission statement: ‘To promote a work culture, and develop employability and economic participation’ (Argentina, Ministry of Labour, 2007). However, estimates of the percentage of JJH beneficiaries who comply with the work requirements vary widely, with the lowest at around only 50 per cent. Employment schemes linked to JJH have been almost entirely unskilled and have not included training (CONAEyC, 2004). As with Workfare in the USA, some have criticised the programme as little more than a ruse for generating downgraded, poorly paid workers (Waddan, Reference Waddan2003; Zaiat, Reference Zaiat2003). Surveys show that for the vast majority of those who ‘graduate’ from the programme, work is poorly paid and unstable (Ministry of Labour, 2005).

Neither Oportunidades nor the social pension contains strong Workfare features. Instead, one secondary objective of Oportunidades has been to reduce child labour in order to promote school enrolment, and there is some evidence that this has happened (Skoufias and Parker, Reference Skoufias and Parker2001). Not surprisingly, the social pension is associated with much lower levels of economic participation among older people (Lloyd-Sherlock, Reference Lloyd-Sherlock2006). However, this has created less controversy than claims that the scheme reduces incentives for younger generations to contribute to social insurance pension funds (World Bank, 2001b). Since the majority of social insurance pensions are worth the same as the non-contributory ones, there may be good grounds for this concern.

The general literature on social protection emphasises the importance of creating ‘springboards’ for economic initiative by providing households with a reliable flow of cash, which can be invested or borrowed against (World Bank, 2001a). There is only fragmentary evidence for these effects. Some studies claim that Oportunidades has helped households purchase agricultural inputs (Gertler et al., Reference Gertler, Martínez, Rubio, Hernández and Herández Ávila2005). Similarly, it has been claimed that the social pension has been used to finance micro-enterprises, although this finding has been contested (Delgado and Cardoso, Reference Delgado, Cardoso and Camarano2005; Lloyd-Sherlock, Reference Lloyd-Sherlock2006). Since 2003 JJH has included a component of supporting affiliates in setting up micro-enterprises. However, by 2005 these accounted for only 8 per cent of activities generated by the programme, and there is no evidence they received significant support (Roca, Reference Roca2005).

Overall, the evidence that new social programmes are having significant human capital effects is at best mixed. The problems of Workfare schemes such as JJH are hardly surprising, given the high levels of unemployment and underemployment in the region (ECLAC, 2006a). The one outstanding example of human capital promotion is Oportunidades’ impact on child health. A key factor in this success was a limited extension of basic primary health care services. Efforts to boost school enrolment have not been matched by public investment in education, which undermined any real welfare gain. Moreover, whether increased enrolment will eventually translate into improved welfare is contingent on many other factors, such as returns to education through the labour market. For countries like Mexico, these trends have not been promising in recent decades.Footnote ⁷ As such, even the World Bank recognises that ‘educational expansion and improvement should not be seen as a distributional panacea’ (World Bank, 2003: 17).

Household dynamics and gender relations

Social protection emphasises the primary role of households in responding to economic risks and as agents of welfare (World Bank, 2001a). Consequently, it pays close attention to the interface between social policies and household dynamics. As part of this, interventions are usually premised on sets of assumptions about the forms of these households, their internal dynamics and the roles different individuals play within them. For example, it is assumed that particular household members are primarily engaged in either breadwinning, care-giving or care-receiving, and that specific interventions can be designed for each of these individuals and activities. Most programmes assume a strong element of household solidarity and income pooling, so that targeting payments and incentives on individuals will benefit entire families, especially young children. In some cases, it has been claimed that social programmes can boost household solidarity and improve the status of potentially vulnerable members, such as women and the very old (Schwartzer and Querino, Reference Schwartzer and Querino2002). Similarly, it is argued that conditionalities encourage households to behave more responsibly by, for example, investing more in children's human capital (Feitosa de Britto, Reference Feitosa de Britto, Barrientos and Hulme2007). Thus, social programmes might lead to a harmonious cycle of stronger households and better outcomes.

While these are very attractive arguments, their empirical basis is not as strong as some advocates seem to think. As in other regions, there is an increasingly complex and varied range of household forms in Latin America (Arriagada, Reference Arriagada2002). There is wide evidence that households are becoming increasingly unstable entities due to migration, divorce and other family breakdowns (Sunkel, Reference Sunkel2006). In part, this has been blamed on the growing pressures on households due to economic insecurity and the withdrawal of the state from some areas of welfare. These trends have been particularly prominent for poorer groups. For example, over half of JJH beneficiaries described themselves as single parents, compared to a national average of around 10 per cent (ECLAC, 2006a; Rodríguez Enríquez and Reyes, Reference Rodríguez Enríquez and Reyes2006). Across the region, female participation in salaried work has risen sharply, particularly in poorer households (ECLAC, 2006b). This calls into question the gender division between Workfare programmes and those targeting mothers. Assumptions about pension sharing and inter-generational solidarity are challenged by findings from some socially excluded neighbourhoods, where a wider context of drug abuse, unemployment and delinquency can foster conflictive and abusive relations (Lloyd-Sherlock and Locke, Reference Lloyd-Sherlock and Locke2008). Thus, while there is some evidence that Brazil's social pensions have increased co-residence between older people and younger relatives, it would be dangerous to assume that this has been unambiguously beneficial for all the parties concerned (Camarano, Reference Camarano and Lloyd-Sherlock2004; Lloyd-Sherlock, Reference Lloyd-Sherlock2006). Likewise, the power of mothers to ensure that adolescent sons attend school regularly should not be over-estimated. On a less positive note, there are some anecdotal reports that JJH encouraged ‘children sharing’ among households in order to obtain the benefit, and that Oportunidades may have served as an incentive for early motherhood (Galasso and Ravallion, Reference Galasso and Ravallion2003; Rivera Macias, Reference Rivera Macias2006).

Assumptions usually made about gender dynamics and women's household roles are particularly important. Official evaluations of Oportunidades have stressed its impact on empowering women in poor households (SEDESOL, 2007). There is some evidence that receipt of the cash benefit has indeed increased women's decision-making authority, boosted their self-esteem and facilitated access to credit and labour-saving devices (Molyneux, Reference Molyneux2006; SEDESOL, 2007). However, by largely excluding fathers, Molyneux (Reference Molyneux2006) notes that Oportunidades further embeds traditional gender roles in breadwinning and caring. It may also foster rising numbers of female-headed households. Evaluations of Oportunidades argue that mothers are more likely to make ‘wiser’ and more altruistic use of the cash benefits than men are, and there is some evidence to support this (Davis et al., Reference Davis, Handa, Stampini and Winters2002). Interestingly, when Oportunidades was compared to a separate Mexican programme, which supports investment in productive activities, it was found that men ‘did not spend on alcohol all the money they receive’ (Davis et al., Reference Davis, Handa, Stampini and Winters2002: 12). This behaviour conforms to the traditional views of social policy and gender roles. The dilemma is whether to work with these established roles or to challenge them.Footnote ⁸

The assumptions about gender roles play out rather differently with the social pension and JJH. Since older populations are disproportionately female, and men are more likely than women to receive a contributory benefit, the social pension has done much to reduce gender income inequalities in later life (Camarano, Reference Camarano and Lloyd-Sherlock2004). Claims about the ‘wise’ and altruistic use of social pensions do not distinguish between older men and older women. The line is that all older people, regardless of sex, allocate a large share of their benefit to younger relatives, particularly grandchildren (HelpAge International, 2006; Delgado and Cardoso, Reference Delgado, Cardoso and Camarano2005). This contradicts the assumptions of gendered altruism underpinning Oportunidades. With JJH, the large number of women claiming the benefit was seen as problematic (Galasso and Ravallion, Reference Galasso and Ravallion2003). In this case, any sense that women might allocate the money more altruistically was over-ridden by assumptions about gendered household roles. There is a strong expectation that the two programmes replacing JJH will target working men and caring mothers largely separately.