Extending Oportunidades: A Look into Mexico’s Model Conditional Cash Transfer Program

Posted by Meghan Greene, Manager, CFI

The Center for Financial Inclusion works with teams of volunteers from Credit Suisse, one group of whom investigated programs that have features in common with the Financial Access at Birth concept. In this post, the group explores Mexico’s path-breaking Oportunidades program.

Government leadership in child finance programs can be both a blessing and a curse, as we outlined in another post. While governments can catalyze rapid scaling, they are also under constant pressure to reduce costs, and thereby may cut corners on key components, such as adequate marketing and advertising. Further, programs that receive their funding from the government are subject to the whims of budget decision making, as evidenced by the abrupt end to the UK’s Child Trust Funds.

Is it possible to design a program that can incorporate the advantages of government engagement while also minimizing potential pitfalls? Many turn to the Oportunidades conditional cash transfer program in Mexico for an example of the best-case scenario. In fact, Oportunidades seems to have come up in many CFI blog discussions in the last few months (see here, here, and here!). In this post we briefly explain what the Oportunidades program is and what makes it so successful.

Oportunidades (formerly Progresa) began in 1997. It provides cash payments to families with children in exchange for regular school attendance, health visits, and nutritional support:

  • Educational grants are provided for children in primary through high school, with grant amounts increasing as the child advances to higher grade levels. Starting with secondary school, girls receive larger grants than boys, given their higher drop-out rates.
  • Basic health care is provided for all members of the family by government public health institutions, with a focus on preventive services.
  • Families receive a fixed monetary transfer for improved nutrition, as well as supplements for youth children and new mothers.

Payments are distributed directly to families to reduce corruption and increase efficiency, and are directed to the female head of family.

After its initial launch, Oportunidades was extended to students at higher grade levels and expanded broadly to both rural and urban areas. In 2003, youth savings accounts were added to promote continued education.

At present, the government estimates that Oportunidades reaches 6.5 million households, affecting 30 percent of the population.

Key Success Factors

The Oportunidades program benefited from an effective collaboration between multiple Mexican government ministries, including education, health, finance, and social security. Oportunidades’ comprehensive approach and ties to multiple departments have embedded the program deeply within the bureaucracy, which has helped the program survive through multiple administration changes.

Its longevity is also attributed to the emphasis on data-driven research and evaluation from the outset. Dean Karlan and Jacob Appel outline the importance of the evaluations in their book “More than Good Intentions:”

“(Progresa) came with a hefty price tag, and the government wanted to know just how much good it was doing with all that money. So they partnered with economists and designed an RCT to measure impacts on education and integrated it seamlessly with the phase-in of the program. In fact, the design turned a budget constraint into an advantage: At the outset there wasn’t enough money to launch Progresa in all 495 targeted communities, so they randomly selected two-thirds of communities to receive the program right away, and monitored the rest as a control group for a two-year period. At the end of that time, when funds were available, Progresa was implemented in the control communities.” (p. 201)

Launching evaluations at an early stage allowed the program to make needed programmatic adjustments before it reached a full rollout.

The International Food Policy Research Institute (IFPRI), along with academic economists, conducted the initial evaluation of Progresa. They found positive impacts on school enrollment, health clinic attendance, and nutrition.

Oportunidades’ model has been replicated worldwide, and according to the Mexican government, is now being applied in more than 30 countries.

Interested in learning more? There are a wealth of resources about Oportunidades online, and PBS produced a short special on the program in 2009 that can be viewed here.

Thanks again to the dedicated Credit Suisse team of volunteers who helped compile this report.

Image Credit: UNESCO

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