The Expansion of Cash Transfers in Chile and its Challenges: Ethical Family Income

Produced by: 
International Policy Center for Inclusive Growth
Available from: 
August 2012
Paper author(s): 
Simone Cecchini
Claudia Robles
Luis Hernán Vargas
Topic: 
Poverty - Inequality - Aid Effectiveness
Fiscal Policy, Public and Welfare Economics
Year: 
2012

In the last decade Chile has attracted renewed interest for its innovative social protection policies and programmes, such as the Chile Solidario system to overcome extreme poverty (launched in 2002), the special plan for Universal Access with Explicit Guarantees (Plan de Acceso Universal con Garantías Explícitas, AUGE) to ensure access to healthcare (2004), the Basic Solidarity Pension (Pensión Básica Solidaria, PBS)—the cornerstone of the 2008 pension reform—and the system of Chile Grows With You (Chile Crece Contigo, 2006) (Robles, 2011). These programmes were driven by the centre-left government Coalition of Parties for Democracy (Concertación de Partidos por la Democracia), which governed the country from its return to democracy in 1990 until 2010.

With Sebastián Piñera’s arrival as President of Chile in March 2010, the new centre-right government of the Coalition for Change pledged to maintain, expand and give transparency to the existing social protection system in Chile, with a view to eradicate extreme poverty by 2014 and poverty by 2018. Among the most significant measures undertaken by the new government include the creation of the Ministry of Social Development (Ministerio de Desarrollo Social) to replace the former Ministry of Planning (Ministerio de Planificación), the review of the Social Protection Form (Ficha de Protección Social) used to select beneficiaries of the social protection programmes, and the launch of the programme Ethical Family Income (Ingreso Ético Familiar, IEF) that will replace Chile Solidario and consists of a wide range of—conditional and unconditional cash transfers for the poorest and certain vulnerable, although not extremely poor, segments of the population. 

This Policy Research Brief intends to describe IEF, drawing particular attention to its innovations with regard to Chile Solidario as well as its scope, limitations and challenges.

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