The uses and abuses of social programmes: the case of conditional cash transfers

Abstract

Social programmes have been increasingly used by developing countries to fight poverty and have attracted growing budgets. However, it has been empirically shown that there is a weak correlation between social spending and outcomes, even if we account for national incomes (World Bank 2008). Many factors have been identified as possible causes of this situation, including market failures, composition of spending, corruption and effectiveness of social service delivery. A body of research on public expenditure in democratic regimes argues that one of the reasons for such underperformance is manipulation by political leaders of the timing and allocation of expenditures with the aim of re-election. Increases in public expenditures have been timed to coincide with elections and expenditures have been directed toward areas in which their political impact was likely to be largest, discriminating against other areas on the basis of political calculus rather than social or poverty-based criteria.