In April 2007, New York City Mayor Michael Bloomberg announced to the city’s poorest that they could earn money simply by sending their children to school. Through his historic program, Opportunity NYC, low-income families in New York City were offered cash rewards in return for actions that would invest in their future, such as keeping their children in school, getting their children regular health checks and completing an educational or vocational training course. This system of (imposed) incentives lasted until 2010, providing immediate relief through moderate, monthly cash transfers complemented by investments in education and health.
Mayor Bloomberg’s scheme, fiercely debated but deemed successful overall, was the first of its kind in the United States. But it was not the first time the world had seen such a program. In fact, Opportunity NYC derived its inspiration from conditional cash-transfer programs in Mexico and Brazil.
These countries had developed CCT programs several years before to combat their historically high levels of inequality. New York City decided it could apply the idea to its own inner-city poverty, thus making a unique yet valid connection between the problems of developing and developed countries and a notable gesture toward the common solutions to poverty that exist throughout the world.
Both Brazil and Mexico have seen incredible results from their CCT programs. Brazil’s Bolsa Familia, or “Family Allowance,” now reaches between 40 and 50 million people after being consolidated in 2003. The conditional cash-transfer programs require that a person meet certain “conditions,” such as attendance at school or continuity of health check-ups and in return bestowing monthly allowances based on the number of children in the family and the family’s income.
For many families who qualify for the Bolsa Familia program, their monthly income more than doubles thanks to the cash transfer. Studies have indicated that most of the money received by Brazil’s poorest families is spent on clothing, food and school supplies. The United Nations Development Program has found that the Bolsa Familia program is responstible for 20 percent of the reduction of the income inequality in Brazil. This statistic is especially significant because until recently, Brazil was ranked as the world’s most unequal country in terms of income.
Mexico’s Oportunidades program works in a similar way, with funds transferred to families based on their investments in their children’s education and health. Founded in 2002, the goal of Oportunidades has been to break the cycle of poverty that keeps children of low-income families from improving their situation in life. The Oportunidades program covers roughly 25 percent of the Mexican population and has survived through multiple administrations.
Both programs tackle many social problems at once, in addition to helping solve income inequality. Bolsa Familia and Oportunidades transfer the cash almost solely to the women of the household, giving them greater bargaining power within their households. As women are usually in charge of the children and food in the household, putting women in possession of money has been shown to improve child nutrition and education. Brazil has also made a list of beneficiaries of the Bolsa Familia program available online, a measure that has increased the transparency of the initiative. In Mexico, newly elected leaders have also been forbidden from signing up new beneficiaries immediately after the election to prevent political rewards.
The CCT model has now been adopted all over the world in countries such as Honduras, Zambia, Turkey, Bangladesh, Egypt and — with Opportunity NYC — the United States. Its widespread applicability demonstrates the potential for the transfer of ideas and social schemes, even from developing to developed countries. When looking for solutions in poverty reduction, the United States can simply turn to one of its neighbors.
Sarah Stodder is a senior in the School of Foreign Service. AN INTERNATIONAL DEVELOPMENT appears every other Friday.
