New York Times Magazine: A Payoff Out of Poverty?
By Tina Rosenberg, Published 2008-12-21 SundayInstead of the welfare state, which does not incentivize the poor to improve their position, Oportunidades, the "de facto welfare system in Mexico", gives the poor money in exchange for a wide variety of good behaviors, including going to a clinic, children's school attendance, and attending educational workshops. They publish all the data they collect, and it is working by nearly every standard: malnutrition is on the decrease, less people are in poverty, illness frequencies have dropped and more children are staying in school. In personal interviews, Tina Rosenberg says that Oportunidades has also changed the culture of alcoholism, victimhood, machismo and thinking only in the present that promotes poverty.
The fancy name for the program is "conditional cash transfers", supported both by the World Bank and the Inter-American development bank.
At least 30 countries have now adopted Oportunidades, most of them in Latin America, but not all: countries now using or experimenting with some form of conditional payments include Turkey, Cambodia and Bangladesh. Last year, officials from Indonesia, South Africa, Ethiopia and China contacted or visited Mexico to investigate. Perhaps the most startling iteration is in New York City. Opportunity NYC, a pilot program begun last year after Mayor Michael Bloomberg visited Mexico, will test whether the Oportunidades model can help the New York neighborhoods where poverty is passed down from parent to child. Britain has been successfully using a form of conditional cash transfers to keep teenagers in school and is now running pilots to broaden the program to other areas.
In addition to the results, some of the ideas here are also interesting in terms of what people think about the causes of poverty and whether it can be solved.
Liberals have largely abandoned entitlements — the so-called nanny state — that took care of people with welfare and other payments while demanding little or nothing on their part. And most conservatives now acknowledge that government must play a role in fighting poverty. But that role is taking a new form. Lawrence M. Mead, a political-science professor at New York University and a former Republican Congressional staff member, calls it “the new paternalism.” The nanny state offered unconditional love; the new paternalism is tough love, directly aimed at smashing the culture of poverty. Paul Starobin, a staff correspondent for The National Journal, has coined the term “daddy state” — government as lifestyle supervisor and enforcer of civic responsibilities...
Conditional-cash-transfer programs, part of the new paternalism, defy the traditional poverty wisdom on both left and right. But intriguingly, they are postideological in another sense too. Do the poor fall into the culture of poverty for structural reasons, or behavioral ones? Oportunidades and Opportunity NYC have a novel answer to that question: maybe it doesn’t matter.
