My forthcoming book, Human Capital vs. Basic Income: Ideology and Models of Cash Transfer Programs in Latin America (University of Michigan Press, 2021), studies how government ideology influences the adoption and design of anti-poverty programs in that region. Combining quantitative analyses covering 18 countries and case studies on Brazil, Argentina, Bolivia, and Costa Rica, based largely on field research, I examine the relationship between the election of left-leaning presidents and the diffusion of conditional cash transfer (CCT) programs. Described as the most important innovation in social policy of the last fifteen years, CCTs relieve poverty by awarding families regular stipends conditional on their children attending school.
Contrary to prior research, which finds no relationship between ideology and CCT adoption, evidence of party attitudes from six countries shows that the left initially opposed these policies for not being ambitious enough. A case study of Brazil then details how center-left President “Lula” da Silva begrudgingly embraced CCTs after the failure of his own, more ambitious, initiatives. However, Lula did not merely continue the CCTs he inherited, he redesigned them, expanding coverage and enacting less punitive enforcement of eligibility criteria. Influenced by Brazil, other previously reluctant left-wing presidents emulated Lula.
Thus, there came to be two distinct models of CCTs. Whereas the right and center pursued programs focused on improving human capital through strict enforcement of school attendance, the left expanded coverage and de-emphasized enforcement, thus transforming CCTs into a basic income guarantee for families with children. A time-series cross-sectional regression analysis of 18 countries finds that CCT coverage is higher under left-wing governments. A subsequent analysis of 10 programs confirms that CCT design – evaluated in terms of scope of target population, strictness of conditionality enforcement, and stipend structure – is heavily influenced by government ideology. These findings are further developed through case studies of the politics of CCTs enacted by left-wing governments in Argentina and Bolivia and a centrist government in Costa Rica.
More broadly, the book explores the relationship between ideology and social policy under globalization, a central question in comparative politics and political economy. It finds that, despite being subject to oversight from international institutions and competing fiercely for foreign investment, governments, even in developing countries, retain significant discretion in designing social policy.
These findings have policy implications beyond Latin America. Through its CCTs, the region’s left redistributed income toward the poor and reduced income inequality at a time when it was increasing in the rest of the world. Latin America’s experience with cash transfers is particularly relevant to today’s industrialized countries. Growing concerns over rising inequality and automation-related job losses have sparked debates on the need for workers to constantly upgrade their human capital as well as the need for a universal basic income to protect permanently redundant workers. Cash transfers have a role to play in tackling these problems.