conditional cash transfer

A conditional cash transfer pays money directly to poor households, but only while they meet conditions attached to the payment. Those conditions are almost always about children: enrolling them in school and keeping attendance above a set level, or using basic preventive health care such as vaccinations and check-ups. The World Bank describes them as requiring minimum investments in the human capital of children. The design tries to do two things at once, lifting a household's income now and raising the chance that its children are not poor as adults, which is why these programmes are often judged on school and clinic records as well as on income.

The World Bank's 2009 policy research report on the model found that the transfers have generally been well targeted to poor households, have raised consumption levels and have reduced poverty, by a substantial amount in some countries, and that offsetting effects such as recipients working less have been relatively modest. The same report sets out why a government might attach conditions at all rather than simply hand over the money: households may under invest in their children's schooling and health if they hold incorrect beliefs about what those investments return, and taxpayers may be readier to support payments tied to long-term efforts to escape poverty. It also states plainly that even the best designed programme cannot meet all the needs of a full social protection system.