Conditional Cash Transfers and Corruption

by Dr. Prospero E. de Vera

Ten years ago, world leaders in New York signed the Millennium Development Goals and promised to build a more prosperous, just and peaceful world.

The promise has clearly not been achieved. The review of the MDG Country Reports, including those of the Philippines, has revealed some successes, and also many problems. As a result, an MDG Acceleration Framework, defined by the UN as a “ systematic way to identifying bottlenecks and possible high impact solutions, leading to a concrete plan of action for government” has now been developed to accelerate the realization of specific MDG Goals.

Two social protection programs – social security and social assistance – are now considered as the most critical interventions that can accelerate the achievement of the MDGs by 2015. Social assistance, through the conditional cash transfers (CCT), has thus become vogue in many developing countries eager to placate their suffering poor and at the same time claim MDG success.

It is in this context that I listened intently to the presentations of UN Special Rapporteur on Extreme Poverty Magdalena Sepulveda and Christian Gruenber of the International Council on Human Rights Policy in the panel “Setting Anti-Corruption Agenda for MDGs: Challenges and Opportunities” in the on-going 14th International Anti-Corruption Conference in Bangkok, Thailand.

Since evaluation of CCT programs in developing countries are either few or none, I was particularly interested in finding out whether former President Arroyo’s much maligned CCT measured up to international standards, and whether President Aquino’s dramatic expansion of CCT beneficiaries from 1M to 2.5M households can actually work.

Sepulveda echoed many of the arguments being used by CCT supporters in the Philippines. That giving cash to parents for keeping their children in school and improving their own health is an effective intervention to achieve universal primary education (MDG Goal 2), reduce child mortality (MDG Goal 4), and improve maternal mortality (MDG Goal 5).

She also agreed with the critics of the program that poorly designed and implemented CCT programs open vast opportunities for corruption, and fighting corruption must go hand-in-hand with CCT and MDG interventions.

Sepulveda also pointed out that CCT’s work only when the education and health infrastructure are available in poor communities. Otherwise, the “conditions” of the cash transfer can’t be met and become an added punishment for poor people.

Third, CCTs work best if access to information and transparency are imbedded in the program. Information must be available and accessible - on who will be implementing the program at the national and local levels, who are the beneficiaries, the criteria for their selection – not only to policymakers and the general public but to local communities.

Information access is important, and difficult, because the poor (particularly marginalized groups like indigenous peoples) often have no access to information. The information has to be adapted to their needs, must be in a language that they understand, and must be gender-aware.

Fourth, a clear complaint mechanism must be established at all levels to address questions of the “included” and “excluded” poor households and to report the behaviour of authorities. Finally, Sepulveda asserted that implementation and monitoring systems must ensure the participation of the beneficiaries.

Gruenber adds that since human rights and human development are the main pillars of the UN Millennium Declaration, a monitoring system where women and the youth are involved in real time is required. This monitoring system, adds Gruenber, should be jointly owned by government and the communities and be technology based so complaints can be received and acted upon in real time.

Were these necessary requirements present in the Arroyo CCT program? I don’t think so. Are these requirements for program success present in President Aquino’s billion-peso CCT program? And if not, can these be put in place in time to improve implementation?

Maybe the CCT supporters can take a cure from Sepulveda who warned that the fixation of many developing countries to copy and expand their CCT programs simply because others are doing must be stopped at all cost.

Or maybe, they should just go slower and do a serious evaluation of the program first before promising the poor that we can bring them out of poverty through CCT.