The conditions for conditionality in cash transfers

Conditional cash transfers
Financial Economics

While conditional cash transfers (CCTs) belong to a relatively new and expanding generation of social protection programmes, unconditional benefits (generally defined as unconditional cash transfer programmes—UCTs) have long occupied the social protection scene. Evidence shows that both transfers have a positive impact on fundamental dimensions of human capital accumulation such as nutrition, cognitive development and education.

If CCTs have been successful in achieving some of their desired objectives, have the conditionalities played a central role? Moreover, if CCTs do offer advantages, can we expect them to work in any context? What pre-conditions are necessary to guarantee effective CCTs, and in which situations should other policy options be pursued?

The blurred line between conditionality and un-conditionality

To answer these questions, it is important to distinguish between four means of conditioning the use of social (cash) transfers that are available to policymakers and are widely used:

Conditioning on access: eligibility criteria tend to target a set of beneficiaries who have particular needs and, therefore, display similar patterns in the use of their transfers.

Implicit conditioning: intrinsic characteristics of the subsidy design (e.g. the nature of the transfer, delivery mechanisms, name etc.) may act as a conditioning mechanism to influence the use of resources.

Indirect conditioning: the use of cash transfers can be further conditioned by complementary policy actions that are implemented in conjunction with the transfer (e.g. training/education sessions or case management).

Explicit conditionality: the payment of the cash subsidy is contingent upon the adoption of certain ‘desirable’ behaviours, which are explicitly monitored. What defines the nature of CCTs is the presence of ‘explicit conditionalities’ within the ‘contract’ between provider and recipient. 

When trying to understand under what conditions CCTs are effective it is important to base the comparison with UCTs on the relative benefits—but also costs—of introducing, monitoring and enforcing this ‘explicit contract’. For example:

  • the direct, indirect and opportunity costs of adopting ‘desirable’/ enforced behaviours such as sending children to school (with potential negative impacts in terms of equity and inclusiveness); and
  • the costs and administrative burden of monitoring and verifying compliance for the programme, recipients and other actors within the community.

What are the conditions for (explicit) conditionality? 

Countries wishing to adopt CCTs should carefully consider their feasibility based on overall priorities for policy design and institutional contexts. The success of CCTs in Latin America was precisely linked to an assessment of this type (i.e. a clear policy objective to address problems of low human capital and a thorough understanding of supply and demand for key services such as education), and was also grounded on a specific political economic environment where the co-responsibility argument had a receptive audience. If countries in sub-Saharan Africa and elsewhere want to reap the benefits of CCTs, they should first understand whether similar conditions apply. Table 1 summarises a framework for assessing the feasibility of explicit conditionalities.


Pellerano, L., and V. Barca. 2014. “Does one size fit all? The Conditions for Conditionality in Cash Transfers.” OPM Working Paper 2014-1. Oxford: Oxford Policy Management.

This One Pager was initially published in the One Pager Nr. 317, andis a partnership between the IPC-IG and Oxford Policy Management.

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