When New York City Mayor Bloomberg’s anti-poverty commission recommended this week that the city pay poor people to send their kids to school and keep up-to-date on immunizations, the idea had an oddly familiar ring to it. [Correction: The idea of introducing conditional cash transfers in NYC was articulated by Mayor Bloomberg as he accepted the Commission's report, not by the Commissioners themselves.] This is just the type of "conditional cash transfer" that's been implemented at large scale in Mexico, Brazil and elsewhere, often with strikingly positive results. There's little doubt that the commissioners were inspired by those experiences, whose impact has been convincingly demonstrated through careful evaluations, and documented in a veritable library of research papers and policy reports (for a start, see: From Social Assistance to Social Development: Targeted Education Subsidies in Developing Countries, by Sam Morley and David Coady, a short write-up in Millions Saved, and a new Brookings publication by Santiago Levy, one of the principal architects of Mexico's PROGRESA program, Progress Against Poverty). The south-to-north migration of this policy innovation represents a fascinating case study in the diffusion of ideas when they are backed by strong evidence.
Wisely, the commission also stated that the impact of this and other anti-poverty programs should be assessed systematically:
Evidence-based practice is the hallmark of any accountability structure. Developing an evaluation strategy must be an integral part of the design process itself, as it also aids in clarifying underlying assumptions. When evaluating initiatives New York City must strive for the highest standards and most rigorous methods feasible.
Such evaluation will be tremendously valuable to New York City policymakers, but also to those beyond the city's - and the country's - borders. As each new experience is evaluated, a body of evidence is built about what works, what doesn't work, when and why. In other words, multiple studies of similar programs contribute to the global public good of knowledge for policymaking.
It’s certainly likely that the impact of conditional cash transfers in New York will differ significantly from the effects in the very different environments of Mexico, Brazil, Nicaragua or Honduras. Some hints about how results may differ are emerging from work we are doing under the auspices of the working group on performance-based incentives in health. The working group is looking at supply-side “pay for performance” schemes and demand-side approaches in both developed and developing countries, and drawing lessons about both the programs’ impacts on health-related behaviors and the factors that should be considered in designing them. The early stage of our review suggests that targeted cash incentives can be powerful in changing behaviors in many settings, but may be somewhat less potent (particularly in affecting provider practices) in the U.S., where a broad range of other financial and non-financial incentives are at play. We’ll have a full set of findings and recommendations in a book coming out in 2007 - perhaps just in time to get on the reading list of those who are charged with designing and implementing New York City’s anti-poverty initiative.