Conditional Cash Transfers and Payments for Environmental Services: A Conceptual Framework for Explaining and Judging Differences in Outcomes

U. Martin Persson and Francisco Alpizar Rodriguez

RFF Working Paper Series from Resources for the Future

Abstract: Despite the recent popularity of conditional cash transfers (CCT) and payments for environmental services (PES) programs, what determines their success is not well understood. We developed a conceptual framework to give insight into some of the main determinants of CCT and PES program efficiency that hope to increase investments in human and environmental capital. We used a simple agent-based model and validated the results with empirical data from existing programs. We show that 1) the share of participants who meet the program’s conditions at baseline is a powerful predictor of program efficiency, (2) and selection bias erodes program efficiency to a large extent. (Selection bias stems from agents who already meet program criteria and who self-select into programs at higher rates than those who do not meet the conditions.) Based on these results, we discuss possibilities for improving efficiency—mainly by targeting applicants or increasing payments—and criteria for evaluating and choosing CCT, PES, or other policy instruments.

Keywords: conditional cash transfer; payment for ecosystem services; program evaluation; additionality (search for similar items in EconPapers)
JEL-codes: D04 H53 I38 Q28 (search for similar items in EconPapers)
Date: 2011-05-27
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Citations: View citations in EconPapers (1)

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Journal Article: Conditional Cash Transfers and Payments for Environmental Services—A Conceptual Framework for Explaining and Judging Differences in Outcomes (2013)
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