Conditional Cash Transfer a mechanism for social inclusion in

Transcription

Conditional Cash Transfer a
mechanism for social inclusion
in Ecuador: An Assessment of
Bono de Desarrollo Humano.
A dissertation submitted to the University of Manchester for the degree of MSc
International Development: Public Policy and Management in the Faculty of
Humanities
2014
Virgilio Junior Briones Garcia
School of Environment, Education and
Development
Table of Contents
ABSTRACT ............................................................................................................................................ 3
ACKNOWLEDGEMENTS .................................................................................................................... 4
INTELECTUAL PROPERTY STATEMENT........................................................................................ 5
DECLARATION .................................................................................................................................... 6
CHAPTER 1 –INTRODUCTION........................................................................................................... 7
1.1 Background ................................................................................................................................... 7
1.2 Research Questions ....................................................................................................................... 8
1.3 Methodology ............................................................................................................................... 10
1.4 Limitations and Challenges ......................................................................................................... 10
1.5 Structure of the Study .................................................................................................................. 11
CHAPTER 2-CONCEPTUAL FRAMEWORK ................................................................................... 12
INTRODUCTION ............................................................................................................................. 12
2.1 Social Protection in Ecuador and National Development Plan Buen Vivir ................................. 12
2.2 Social Inclusion ........................................................................................................................... 15
2.3 Social Protection.......................................................................................................................... 16
2.4 Conditional Cash Transfers ......................................................................................................... 18
CONCLUSION ................................................................................................................................. 20
CHAPTER 3- BONO DE DESARROLLO HUMANO (HUMAN DEVELOPMENT GRANT IN
ENGLISH) ............................................................................................................................................ 21
INTRODUCTION ............................................................................................................................. 21
3.1 History of Social Protection and BDH in Ecuador ...................................................................... 21
3.2 History of the BDH ..................................................................................................................... 22
3.2.1 Objectives ............................................................................................................................. 23
3.2.2 Origins .................................................................................................................................. 23
3.2.3 Targeting .............................................................................................................................. 24
3.3 Expansion of Social Protection in Ecuador ................................................................................. 27
3.4 BDH Institutionalization ............................................................................................................. 28
3.5 Link between BDH and Social Policy of Plan Buen Vivir 2013-2017 ........................................ 30
CONCLUSION ................................................................................................................................. 33
CHAPTER 4-EFFECTIVENESS OF THE BDH ................................................................................. 33
INTRODUCTION ............................................................................................................................. 33
4.1 Evaluating the impact of the BDH .............................................................................................. 33
4.2 Analysis of Changes in the BDH................................................................................................. 35
4.3 Summary of Critical Assessment on Evaluations ....................................................................... 38
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CHAPTER 5-FINDINGS AND CONCLUSIONS ............................................................................... 39
BIBLIOGRAPHY ................................................................................................................................. 44
LIST OF ILLUSTRATION
Figure 1 Framework of Social policy articulation in Ecuador .............................................................. 14
Figure 2 Number of beneficiaries of the BDH per history stage period................................................ 25
Figure 3 Composition of BDH's beneficiaries in 2012 ......................................................................... 26
Figure 4 National Poverty Index-Percentage per year........................................................................... 28
Figure 5 National Plan Buen Vivir 2013-2017 promoting social inclusion .......................................... 32
Table 1 Historic evolution of the BDH ................................................. ¡Error! Marcador no definido.
Table 2 Non-Contributory Social Programmes in Ecuador................... ¡Error! Marcador no definido.
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ABSTRACT
Developing countries’ interest in Conditional Cash Transfers (CCTs) has emerged in the last
decades. This dissertation examines a conditional cash transfer programme in Ecuador called
Bono de Desarrollo Humano (BDH). The thesis examines the impacts of the CCT programme
as mechanism for social inclusion in Ecuador. Responses to poverty mitigation via
conditional cash transfers could follow different pathways. The social policy framework of a
country could shape the design and objectives of a conditional cash program. This mainly
depends on the government’s plan and objective in its policy framework. Therefore, the
objective of this dissertation is to explore a relationship between The BDH and the National
Development Plan Buen Vivir, to investigate how this relationship can complement the work
that the BDH has done for many years. This paper contributed to the body of work on the
impact of cash transfer program in social inclusion and the linkage with planning and
development. By examining this important case in the social policy of Ecuador, I clarify the
process by which this conditional cash transfer could become a mechanism for social
inclusion. This paper identifies the variations and recent trends in the BDH. This thesis was
accomplished through qualitative method of data collection and analysis. Data have been
collected from previews impact evaluations, studies, and published reports. This dissertation
challenge if the BDH represent a door to develop an integrated set of social policies in
Ecuador. The results obtained from this BDH assessment can prove that the BDH has a
significant impact in promoting social inclusion.
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ACKNOWLEDGEMENTS
I take this opportunity to express my profound gratitude and deepest regards to my
dissertation supervisor, Professor Armando Barrientos, for his exemplary guidance,
monitoring and constant encouragement throughout the course of this thesis. The inspiration
and help given by Professor Barrientos will be embraced in the journey of life on which I am
about to embark. I also, take this opportunity to express my sincere gratitude to Juan Villa,
Luciana Kaross and Sam Ling, whom took time from their busy schedules to share their
valuable information and guidance, which help me in completing this task. I am also obligated
to staff members and professors of the International Development: Public Policy and
Management programme, for their cordial support, valuable information and during the
period of this study.
I thank almighty to all members of my family and friends for their constant encouragement
without which this assignment would not be possible. My deepest gratitude goes to my
parents, brother and son, Virgilio R Briones, Olga Garcia, Shamir Briones and Joshua
Briones. Lastly, my special gratitude is to my dearest and beloved Mariana Chang for her
endless motivation and support given every day throughout the course of this thesis.
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INTELECTUAL PROPERTY STATEMENT
i. The author of this dissertation (including any appendices and/or schedules to this
dissertation) owns certain copyright or related rights in it (the “Copyright”) and s/he has given
The University of Manchester certain rights to use such Copyright, including for
administrative purposes.
ii. Copies of this dissertation, either in full or in extracts and whether in hard or electronic
copy, may be made only in accordance with the Copyright, Designs and Patents Act 1988 (as
amended) and regulations issued under it or, where appropriate, in accordance with licensing
agreements which the University has entered into. This page must form part of any such
copies made.
iii. The ownership of certain Copyright, patents, designs, trademarks and other intellectual
property (the “Intellectual Property”) and any reproductions of copyright works in the
dissertation, for example graphs and tables (“Reproductions”), which may be described in this
dissertation, may not be owned by the author and may be owned by third parties. Such
Intellectual Property and Reproductions cannot and must not be made available for use
without the prior written permission of the owner(s) of the relevant Intellectual Property
and/or Reproductions.
iv. Further information on the conditions under which disclosure, publication and
commercialisation of this dissertation, the Copyright and any Intellectual Property and/or
Reproductions described in it may take place is available in the University IP Policy (see
http://documents.manchester.ac.uk/display.aspx?DocID=487), in any relevant Dissertation
restriction declarations deposited in the University Library, The University Library’s
regulations (see http://www.manchester.ac.uk/library/aboutus/regulations) and in The
University’s Guidance for the Presentation of Dissertations.
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DECLARATION
I declare that the work in this dissertation was carried out in accordance with the requirements
of The University of Manchester’s Regulations and Code of Practice for Taught Programmes
and that it has not been submitted for any other academic award. Except where indicated by
specific reference in the text, this work is my own work. Work done in collaboration with, or
with the assistance of others, is indicated as such. I have identified all material in this
dissertation
which
is
not
my
own
work
through
appropriate
referencing
and
acknowledgement. Where I have quoted or otherwise incorporated material which is the work
of others, I have included the source in the references. Any views expressed in the
dissertation, other than referenced material, are those of the author.
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CHAPTER 1 –INTRODUCTION
1.1 Background
Nowadays developing-country governments are trying to reform the social policy framework
to addresses poverty, and promote social inclusion. The new premise is that social protection
is a legitimate function of governments and public providers (Kirkpatrick et al., 2002). In the
last decades, the financial crisis had showed that appropriate income protection measures and
safety nets programs are necessary to combat vulnerability (Barrientos and Hulme, 2009;
Holzmann and Jørgensen, 2001). This new social assistance framework has evolved in
response to this rising economic crisis and vulnerability (Barrientos and Lloyds-Sherlock,
2002). It has changed from the old view of short-term alleviation (food aid, and subsidies)
into a wide range of comprehensive programmes. More than just supporting people’s
consumption levels, this modern view of social protection is looking to protect people’s rights
to a basic standard of living (Kirkpatrick et al., 2002) with diverse objectives, designs and
targeting. This new perspective aims to break the poverty cycle and intergenerational poverty
through varying forms of social assistance. It usually includes investments in human capital,
understood as children’s education and health wellbeing.
In this dissertation, I will look into Ecuador’s Conditional Cash Transfer (CCT) programme,
Bono de Desarrollo Humano (BDH, Human Development Grant in English), and its social
policy framework surroundings. This study explores the programme’s objectives. My
hypothesis is that whether the programme’s objective is not only reducing poverty, but
constructing societies with greater social inclusion and cohesion. This study aims to cover an
in-depth analysis of the socio-economic inclusion outcomes achieved by the conditional cash
transfer programme in Ecuador.
In more details, this study looks to spark the debate of whether BDH is achieving its objective
in social inclusion, and to what extent the programme goes hand-in-hand with the national
objectives of social inclusion, embedded in the National Development Plan 2013-2017. Note
that in the context of this dissertation, the term Social Inclusion is frequently used in its
broadest sense to refer to: the extent to which various practices/activities/mechanisms
promote or limit cultural and economic integration and the meaningful participatory access of
social groups and individuals into mainstream society (Raffo and Gunter, 2008).
In the new form of social assistance, conditional cash transfers are seen as a developmental
intervention rather than a safety net (Barrientos and Hulme, 2009). Conditional Cash
Transfers (CCT) programmes play an important role in the new social protection policy
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framework of many developing countries. Conditional cash transfer is a non-contributory
assistance programme, which provides money to poor families contingent on certain
behaviour (Rawlings and Rubio 2005). These programmes have three components in
common: a cash transfer, a targeting mechanism and conditionality (Bastagli 2009).
Consequently, the adoption and implementation of conditional cash transfers programmes is
rapidly spreading around the world. This rapid spreading could be a demonstration that
conditional cash transfers are cost-effective social protection programmes. According to
Molyneux and Thomson (2011), Conditional Cash Transfer is an innovative and effective
mechanism that can reach the most vulnerable groups in society. Moreover, conditional cash
transfers are well recognized for their contribution to interrupt long-term and intergenerational poverty by promoting investment in human capital.
In order to build more inclusive societies, developing countries are being pushed to innovate
and create programmes with the intention to integrate a variety of measures (Cecchini and
Robles, 2011). Many argue that conditional cash transfers are in the centre of this variety of
measures to promote inclusion. However, it is explained that conditional cash transfers need
to have a better coordination with other social programmes in order to strengthen synergies in
poverty alleviation and inclusion (Briere and Rawlings, 2006; Stampini and Tornarolli, 2012;
Bastagli, 2009). Despite conditional cash transfer success, supporters of conditional cash
transfers acknowledge that these programmes are only one component of the new social
protection policy framework. Therefore, for an effective response to poverty and
vulnerability, it is imperative to fortify Conditional cash transfer programmes synergies with
other programmes and institutions.
1.2 Research Questions
Social protection is generally defined as a public measures to provide income security for
individuals (Holzmann and Jørgensen 2001). In the social protection sector around the world,
it is inevitable the propagation of conditional cash transfers. Latin America is not the
exception, and in fact, this region is becoming increasingly unique in social protection
perspective. The region is offering not only programs of public assistance but establishing
rights-based social policies that look for an integrated and integral programmes that support
social inclusion. However, the design of a conditional cash transfer depends on the goals and
priorities set by policy makers (Hulme et al., 2012).
Furthermore, responses to poverty mitigation via conditional cash transfers could follow
different pathways. The social policy framework of a country could shape the design and
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objectives of a conditional cash program. This mainly depends on the government’s plan and
objective in its policy framework. Also, we need to keep in mind that designs of CCT vary
according to the nature of existing institutions, and level of economic development
(Barrientos and Hulme, 2009). Consequently, the success or failure of any programme will
depend on the national objective, institutional capacities, and institutional constraints (Handa
and Davis, 2006). As a response to above arguments, this study will explore the Bono de
Desarrollo Humano’s origin and objective, parameter and targeting. It will also review the
results of previous evaluations to see whether this cash transfer scheme is in accordance with
the national social development policy framework in Ecuador. In this study, I will attempt to
answer the following questions:
-
To what extent is the BDH successful in including families into a wider range of
social protection programmes?
-
And how effective is the social protection system in ending the exclusion, and
fostering social inclusion in Ecuador?
BDH has become the subject of interest to many experts in the field of development and cash
transfers. This cash transfer programme is particular in its nature because of emerging
development and improvements across many years. As Unda (2013, p. 03) points out, this
program has evolved from a social pension to mitigate poverty, in the midst of a national
economic crisis, to the right of all citizens embedded in the newest (2008) constitution of
Ecuador. To the extension of the programme to all citizens, Ecuadorian national social policy
is aiming to promote social inclusion through integrated and integral programmes. These
integrated programmes demand in-depth analysis of the effectiveness of policy
implementation and subsequent effects on social inclusion.
The importance of evaluating the social inclusion outcomes of the BDH lies in the fact that I
need to determine to what extent the national political objective affects the outcomes of the
BDH in social inclusion. At the same time, it will help to find out whether or not the BDH is
working with complementary institutions on related goals to promote inclusive growth.
The information collected from this evaluation will enrich the debate on the success of
conditional cash transfers to foster social inclusion. Also, it will reveal whether or not national
objectives and comprehensive countrywide strategies are promoting social inclusion. These
results will raise important implications not only for Ecuador, but also for the growing body
of research on conditional cash transfers. This collation of evidence could confirm the
proposition that conditional cash transfers have to fit within broader institutional reforms of
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social and economic policies in order to provoke effective inclusion and poverty reduction to
take place.
1.3 Methodology
In order to answer these questions, the method that I will use in this research is based on
qualitative research. I will collect and critically assess secondary data through desk research
and policy evaluation framework. My data collection and review will focus on the
explanatory analysis based on the framework approach developed by Jane Ritchie and Liz
Spencer in the 1980s (Ritchie et al., 2013). The following conceptual framework will
introduce the National Development Plan (Buen Vivir), its connection with BDH, and a
broader content of social protection and cash transfers. The secondary data I will review and
evaluate are technical reports and empirical studies on conditional cash transfers, and the
BDH carried out by the government of Ecuador, international organizations and private
consultants. In parallel, an in-depth review of the social inclusion objective in the New
National Development Plan is required. This review qualifies and explains the process of
interventions that have yielded these outcomes. Also, an analysis of BDH’s history in
Ecuador is crucial to assess the impact and limitation of the programme in more than 15
years.
The literature review mentioned above will introduce a broader analysis of conditional cash
transfers. In relation to the BDH, the literature review will provide evidence of the current
debates on social protection and conditional cash transfers. Later on, the study will present a
broader analysis of the BDH’s beginning and how it has evolved. Additionally, I will present
a brief overview of Ecuador’s social protection framework and its related institutions, so the
audience can get a better understanding of the most recent situation of the BDH and its
aligned insertion on the newest (2013-2017) National Development Plan (Buen Vivir).
1.4 Limitations and Challenges
Due to time and logistics, several limitations and challenges are outlined. The main limitation
of this research will be time, which could make an impact on the depth and extensiveness of
the study. The permitted length and timeframe of the study does not allow extending more
into deeper research of the main actors and beneficiaries of the BDH. For instance, the
inability to have direct access and interviews with BDH’s beneficiaries in Ecuador could limit
the assessment of the past successes and limitations of the scheme. Another limitation could
be biasing due to the information provided by the Ecuadorian government official websites
and reports. The power relations and expectations of others could influence the information
provided by officials. Ecuadorian officials might be reluctant to provide sensitive information
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about the planned future of the BDH. Also, the officials might attempt to influence the
research providing only positive information about the program due to the bragging about
their jobs. This could limit the critical data analysis.
The findings on this research could help establish a framework on what the BDH has done for
social inclusion, and whether it has been an essential mechanism to generate a minimum
standard of inclusion in Ecuador. At the same time, it could provide a new framework for
future reforms and policies intending to improve BDH. Most importantly, the research will
help to understand if BDH has been a strategy to upgrade the most vulnerable groups, and to
set them on a platform that will move them forward in the inclusive growth process of the
country.
1.5 Structure of the Study
This dissertation is divided into the following steps. The next chapter will set the scene and
framework for this study. It also will provide a brief introduction of the National
Development Buen VIvir and Social protection in Ecuador. Also, it will present the
emergence, the current debate and arguments for social protection, social inclusion and
conditional cash transfers, as well as the framework used throughout the study.
Chapter three will present the history, and evolution of the BDH. This chapter will explore in
detail the origins, objectives and targeting of the BDH and how it is linked to a broader social
protection programmes in Ecuador. Also, I will review the institutionalization of the BDH and
its connection with the Buen Vivir Plan. This section also provides a discussion on social
protection strategies and policies in Ecuador. This exploration might help to determine
whether or not the BDH is enhancing synergies in poverty alleviation and social inclusion
programmes in Ecuador.
Chapter four turns to an assessment of the performance of the BDH in terms of social
inclusion. Chapter four will review and analyse what is known about the impact of the BDH
in Ecuador. Our approach is to compare characteristics of the programme with the latest
reports, conducted by different development actors, on poverty reduction, education, health
and nutrition or consumption. This analysis provides relevant information to assess what is
known about the effectiveness of BDH. This systematic analysis will lead to findings in
conclusion in chapter five. Finally, chapter five will present conclusions of the entire study
and will answer the question of whether the BDH is fostering social inclusion through the
insertion of its beneficiaries into a wider range of social protection.
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CHAPTER 2-CONCEPTUAL FRAMEWORK
INTRODUCTION
This study is based on a qualitative analysis. In order to understand the issue, it is important to
review its relevant literature and concepts. The literature will provide the study with the
pathway to investigate how the BDH in Ecuador is promoting social inclusion. Also, it is
necessary to review the current social policy in Ecuador for understanding how the BDH
currently operates. This review will support the study to evaluate if the scheme is promoting
social inclusion. This section will review the literature on National Development Plans (Buen
Vivir), social protection, inclusion, and conditional cash transfers; their definitions, objective,
and components. Also, it will look at the connection of social inclusion programmes with
National Development Plans.
2.1 Social Protection in Ecuador and National Development Plan Buen Vivir
In September 2008, Ecuadorian voters approved a new constitution. This new constitution
granted new rights(Including social and economic rights) to all citizens, and committed the
Ecuadorian Government to establish an economic, social and political system oriented
towards the realization of Buen Vivir (Good living translated in English) (Deneulin, 2012). In
order to control this commitment, the constitution has created a planning system and has
made the National Development Plan (Buen Vivir) mandatory.
Theoretical underpinning of the Buen Vivir Plan establishes a new vision of economic and
social inclusion. The Buen Vivir plan sees social protection as an essential component of
economic and social development strategies (Barrientos and Hulme, 2009). According to the
International Policy Centre for Inclusive Growth (2012), this plan not only provides a detailed
roadmap of national development but offers a vision of Ecuadorian society with a rights-andopportunities based approach.
The Buen Vivir Plan has twelve objectives to obtain a sustainable development and good
living. This plan is revised and re-established in phases lasting four years. The first plan was
implemented from 2009 to 2013. The plan is in its second phase, running from 2013 to 2017.
These revisions and phases allow redefining courses of action and setting new goals and
objectives for the consecutive phase.
The plan 2013-2017 proposes twelve national objectives for Buen Vivir (Good living). These
twelve objectives are the core of the National Plan (SENPLADES, 2013). Consequently,
these objectives are the heart of the Buen Vivir and social protection. In terms of social
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inclusion, one of those objectives is to eradicate poverty and equitable redistribute resources
and wealth in order to achieve good living. This social inclusion objective of Buen Vivir plan
demands public policies for eradicating poverty and promoting equal distribution of wealth.
Therefore, ministries and secretariats are provided with numerous tools by this rights-based
approach established in the new 2008 constitution. According to this constitution, tools such
as, legal authority to carry out policies and planning are pivotal to fulfil the outlined
objectives. For example, low human and social capital could be a serious concern on the new
plan. Having a general concern in the plan will encourage all different ministries to
collaborate and push their individual legal authority to achieve a common goal of enhancing
human and social capital.
For the purpose of this study, and in order to structure our evaluation of the BDH and its
social inclusion objectives, I will focus only on the dimension of social inclusion. This
dimension gives the framework to plan in the national level, but it may create challenges for
the government in bringing the objectives together through sectorial cooperation (Bermeo,
2013). Nevertheless, the plan states that this plan requires a combination of progressive
institutional reforms and radical decisions that make it possible to unravel political blockades
(SENPLADES, 2013). Also, it gives a lot of independence to the sectorial level. This new
regulatory framework has granted enormous veto power to certain institutions that will
support the public agenda for the common good.
This right and opportunity based constitution has created an extensive public agenda. This
agenda has different central vectors and overall direction for the achievement of the “Good
Living”. One of those Vectors is the distributive policies encompassing the direct transfer and
subsidies policies. As the Plan Buen Vivir states, redistribution policies create a new social
inclusion structure that is based on the imperative of reducing poverty and striving for greater
equality (SENPLADES, 2013). At the same time, this might create a new public institutional
structure for the implementation of social protection policies. This is important to understand
if we would like to assess the effectiveness of the BDH in fostering social inclusion through
the insertion of its beneficiaries into a wider range of social protection.
Following the rationale that national development plan sets the objectives for other plans in
the country, the Plan del Buen Vivir is the highest level of the planning hierarchy in Ecuador.
This Plan is elaborated by the supra-ministerial SENPLADES (Secretaria National de la
Planificación y Desarrollo). The rest of the policy is articulated as follow:
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Figure 1 Framework of Social policy articulation in Ecuador
SENPLADES (The National Secretariat for Development Planning) organises Buen Vivir’s
goals and constitutional rights into policy and development planning.
MIES (Ministry of Economic and Social Inclusion) develops policies,
programmes (BDH), complementary programmes to oversee the
implementation of specific policies in line with Buen Vivir
MCDS (Ministry of Social Development Coordination) Oversees monitoring of
social policies, coordinate different social policies, coordinates different social
institutions within the government and serves as the liaison between those
ministries and the president. All this coordination is in line with the objectives of
Buen Vivir
As we see in figure 1, Ecuador has numerous institutions responsible for various stages of
policy. According to Manta and Conroy (2000, p. 12) Development Plans reflect substantive
(or technical) policy outcomes of planning, but do not fully account for procedural
dimensions. Therefore, this study will focus more in the procedural dynamic that the BDH has
created in order to follow the substantive principle of the National Plan Buen Vivir.
According to Bastagli (2009), conditional cash transfer implementation typically involves a
variety of actors from different government sectors and levels. The involvement of different
actors could present an opportunity for the administration of conditional cash transfers.
However, at the same time, it could create many challenges. The procedural dynamic of
Social Protection in Ecuador could be very efficient for the effectiveness in check and balance
of the main specific objectives, and for the coordination of cross-sectorial complementation.
However, it also could create a bureaucratic barrier to efficient implementation. Such a
complex institutional framework could present obvious difficulties in coordination and
integration of the BDH with other programs, but we will see this later in our analyses.
Bear in mind that this is a broad introduction the Plan del Buen Vivir and its influence in
Social Protection in Ecuador. Theoretically, the initiative of the Buen Vivir plan is very
promising, but it could be too early to assess its success or failure. Also, there is little or non14 | P a g e
evaluation of its efficiency and effectiveness. But for the purpose and limitation of this study
we only focus in the review of main objectives in social inclusion and the procedural
dynamics that affect the implementation and institutions related to the BDH.
2.2 Social Inclusion
Social inclusion concept raises considerable debate in terms of issues related to the
multidimensionality of poverty, relationship of the individual with society, and the state effort
to promote inclusion. Therefore, it is necessary here to clarify exactly what we mean by social
inclusion. Throughout this thesis, the term Social Inclusion is frequently used in its broadest
sense to refer to: the extent to which various practices/activities/mechanisms promote or limit
cultural and economic integration and the meaningful participatory access of social groups
and individuals into mainstream society (Raffo and Gunter, 2008).
According to Berger-Schmitt (2000), the term social exclusion has been used in the sense of
a multidimensional notion of poverty. The different causes and consequences of poverty
create debate about the policies that need to be created in the battle against poverty and
exclusion. However, it is this multidimensionality that forms the notion of social inclusion
and has suggested defining social exclusion as the insufficient of one or more of the following
four systems:
-
The lack of a legal system to promote civic integration
-
The labour market which promotes economic integration
-
The welfare state system promoting what may be called social integration
-
The family and community system which promotes interpersonal integration
(Berghman 1998, p. 258-259)
For the purpose of this study, the concept of social exclusion will be more related to the state
effort to create policies and mechanisms to combat social exclusion, which relates more to
Raffo and Gunter (2008) conceptualization. This study is a public policy and program
evaluation. Therefore, it is important to evaluate the various practices, activities and
mechanisms that promote the living conditions or create disadvantageous situations on the
citizens of a country.
The concept of social inclusion outlined above is essential because this study is assessing the
power of instruments, such as conditional cash transfers, in reducing poverty and fostering
social inclusion. For consequence, it will analyse whether or not the main objectives of a CCT
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in a country could create a better pathway for access to goods, services, and resources to
improve living conditions.
According to the World Bank (2006), conditional cash transfers hold promise for addressing
the inter-generational transmission of poverty and fostering social inclusion. The international
Institution explained that these effects are generated by explicitly targeting the poor and
coordinating social assistance synergies. However, one of the limitations of this argument is
that there is not much evaluation of national policy’s impact in the literature. Furthermore,
many authors argue that despite efforts at program coordination, CCTs have not been
adequately inserted within a broader institutional reform of social and economic programs
that would bring effective inclusion (De la Brière and Rawlings 2006).
In other words, an attempt to evaluate conditional cash transfers programmes in relation to
national social-political objectives is lacking. Therefore, one question that needs to be
addresses in this study is whether the BDH programme goes hand in hand with the national
objective of social inclusion. In this dissertation, the evaluation of the BDH’s level of
inclusion will be assessed in two main perspectives: 1) implementation of national policy with
efforts to target the poor and coordinate social assistance synergies, and 2) a design that
reaches typically excluded groups. These perspectives are based on the examination of
conditional cash transfer made by De la Brière and Rawlings (2006) for the World Bank,
which was mentioned above.
2.3 Social Protection
A considerable amount of literature on social protection in developing countries is a testament
of the interest that this subject has created in the past decades. The positive impacts of social
protection in the middle of global economic crises, structural adjustment and globalization
have caught the attention of many actors in development.
In many developing countries, social protection plays an important role in the battle against
poverty and inequality (Hulme et al., 2012). Nevertheless, a major debate has gone
throughout the years. This debate is on the often high and rising public expenditure levels.
Especially, in developing countries where the public resources are narrow, but the levels of
poverty and inequality are very high. For instance, Holzmann and Jorgensen (2001) point out
that poorly designed and/or implemented social protection systems, and exaggerated
generosity and budgetary cost could lead to significant welfare cost for the individual and
society at large.
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Despite the fact that the debate about high public expenditure levels in social protection is a
valuable literature, it will be minimized in this paper. The reason is that this dissertation
focuses instead on highlighting the new view of social protection. A modern social protection
that is seen as a right-based investment to avoid the vicious circle of poverty and income
support that includes measures to promote social cohesion and inclusion (De la Brière and
Rawlings, 2006;
Barrientos and Hulme, 2009; Cecchini and Robles, 2011). The recent
literature focuses on the new approach to protection that explicitly addresses several
criticisms often levied at more traditional social protection such as high costs (Rawlings and
Rubio, 2005). Therefore, it is necessary here to clarify exactly what is meant by the social
protection and the emergence of its new forms of assistances.
Increasing poverty and vulnerability arising from globalization and economic transformation
around the world are key drivers for social protection (Barrientos and Hulme 2009).
According to the literature, the modern conceptual underpinning of social protection has been
influenced by global crises and the practical actions emphasized by international development
actors. The international community has acknowledged the importance of social protection
and has established it as a basic human right. Therefore, in many countries social protection
is grounded in the premise of inclusion and universal rights. The inclusion and universal right
premise has been pronounced in many International legal instruments, such as (ECLAC,
2010; ILO, 2001a, p.39; UN 2000, p.4). These documents state that social protection has the
objective of not only reduce poverty, but also to construct societies with greater social
inclusion and cohesion (Arnold et al. 2011; Devereux and Sabates-Wheeler, 2004). These
legal instruments ground social protection in implementing a rights-based approach to human
development (Barrientos and Hulme 2009).These instruments also infer that the responsibility
of such right is in the hands of the state. Social protection is seen as a cornerstone for
improved management of social policy and public expenditure (Vakis, 2005) for the common
good.
As we continuously see throughout the literature, social protection is considered an important
factor and investment for development and poverty reduction.
The generally accepted
concept of social protection encompasses a set of publicly mandated actions, carried out by
the state or privately, that address risk, vulnerability and chronic poverty (ODI, 2007).
However, this study focuses on capabilities and a key concept below that seeks to integrate a
variety of measures for building more inclusive society (Cecchini and Robles, 2011). As
Barrientos (2011) states, social protection in developing countries is not restricted to
17 | P a g e
compensating those in poverty for their income shortfall, but rather aspires to have broader
developmental role.
Over the years, social protection has become more complex because it has linked to the idea
of integrating a variety of measures for building more inclusive society. From this broader
context, in the present study, the concept that will be used to describe social protection is the
following:
Social Protection is a policy framework describing public actions taken in response to
levels of vulnerability, risk, and deprivation which are deemed socially unacceptable
within a given society and politic (Conway, De Haan, and Norton, 2000, p. 2).
This definition emphasises the generally accepted premise that social protection is a
legitimate function of governments (Kirkpatrick et al., 2002). Also, it supports that social
protection is largely directed and financed by the governments. Complementary, it manifests
that social protection is an essential strategy to reduce the incidence and severity of poverty
(Barrientos and Hulme, 2008), and fosters social inclusion.
The literature indicates that different forms of social protection have emerged over the last
decades. Barrientos and Santibáñez (2009) point out that the new social protection has three
main components: social insurance, social assistance and labour market regulation. In this
study, we will focus on the social assistance component, which includes programmes such as
cash transfers and other programmes supporting those in poverty (Barrientos and Santibáñez ,
2009).
2.4 Conditional Cash Transfers
Conditional Cash Transfers (CCT) programs are a critical part of the public social policy in
many developing countries (Fitszbein et al., 2009; Ponce and Bedi, 2010; Schady and Araujo,
2008). The main idea behind these programmes is to provide cash to poor families,
conditional on enrolment and regular attendance of their children in school and regular visits
to health centres (Ponce and Bedi, 2010). With an emphasis on long-term human capital
accumulation, conditional cash transfers are a clear manifestation of a new view in social
assistance programmes. Conditional cash transfers could be one of the main components of
modern social protection measures to redress vulnerability, and poverty, in the developing
world.
However, cash transfer is only one part of an extensive range of programmes in social
protection policy. According to De la Brière and Rawlings (2006), CCT programs belong to
the family of social assistance programmes that go beyond the traditional social protection.
18 | P a g e
Cash Transfer is one of the programmes within social assistance and consequently social
protection. It focuses on long-term assistance by directing the investment on human capital of
the poor. Therefore, it has created an important transformation on the policy framework that
addresses poverty and vulnerability through new forms of social assistance.
Developing countries’ interest in Conditional Cash Transfers has emerged in the last decades.
Therefore, the literature in CCT is quite new. Especially in Latin America, these programs
have been adopted in the last two decades. CCTs have been labelled by many experts and
international organizations as successful programmes for social development and poverty
reduction (United Nations, 2000; World Bank, 2001; Inter-American Development Bank,
2007). CCTs have been promoted by the International community as the most cost-efficient,
innovative, and effective tool that can reach the most vulnerable groups in society (Molyneux
and Thomson, 2011). A CCT program could approximately comprise an average cost
projection of 1 to 2 percent of the country’s GDP (Barrientos and Hulme, 2008), and could
reach the poorest households in approximately more than 10% of the total population.
The monitoring and evaluation are key features of this social assistance programs. The
evaluations and monitoring provides essential information about the effective design of
programmes that it is useful to assess their impact and operational performance (Rawlings and
Rubio 2005). In Latin American for instance, most of the CCTs have been evaluated. The
literature generally shows positive results on education, health and consumption. However,
others argue, that it is too early to determine CCT’s effects on long-term development, and
further research is needed (Valencia Lomelí 2008). At the same time, it could be argued that
the popularity of the conditional cash transfers is merely due to the positive impacts that the
evaluations have showed. Such schemes in Latin America have proven to be an effective tool
to improve human capital and to reduce the intergenerational persistence of poverty. Robust
empirical evidence supports the success of the programmes. Barrientos and Hulme (2009)
show that CCT programmes in Latin American have created regional and global interest in
social protection because they have reached a scale capable of making a significant impact on
poverty and vulnerability. The studies usually indicate strong positive impacts on school
enrolment, better child health, household consumption levels, woman’s empowerment, among
other ranges indicators.
Nonetheless, despite the positive results of conditional cash transfers, the evaluations also
have contributed to the debate of the role that conditional cash transfers could play to promote
socio-economic inclusion. There is a wide debate on the literature with respect of social
19 | P a g e
inclusion and the importance of conditional cash transfer within a wider social protection
system. The literature often questions about how well integrated are the policies and
institutions that deliver social assistance with those that support productive sector (ODI,
2007). For instance, In some countries, the design and implementation of CCT components
reflect a concern for the development of an integrated and inclusive set of interventions
(Bastagli 2009). The literature lacks a demonstration of empirical results of effectively
designed and implemented CCTs that are part of an effective and integrated inclusive social
policy. Therefore, complementarity and exit strategies are issues attracting the attention of
researchers.
Furthermore, there is a volume of literature that suggests the need of other complementary
social programs to support CCTs in promoting graduation of beneficiaries from poverty.
Although the focus of the literature remains on the success as social policy to reduce poverty,
there is still an open door to debate about the designs and sustainability of CCT as an
instrument for long-run development. CCTs are not alone the magic bullet to eliminate
poverty and social exclusion. Overall, CCTs do not work alone to eliminate poverty.
According to Arnold, Conway and Greenslade (2011), CCTs are unlikely to achieve
graduation without complementary intervention, such as training, financing, and other social
programmes that must be considered in the design and implementation.
Therefore, CCTs
have to be set in broader framework of social welfare and economic development (De la
Brière and Rawlings 2006). A more effective inclusion and poverty reduction could take
place in developing countries whereas conditional cash transfers are part of a broader
integrated national social policy.
CONCLUSION
This literature is important because it will provide us with a setting to respond if the BDH is a
programme that provides income transfer plus policy interventions aimed to enhance human
capital, financial and physical assets (integrated poverty reduction programme). For many
authors, conditional cash transfer programmes have the need to become more sophisticated
and integrated with the main purpose of addressing long-term challenges of poverty and
inclusion.
For simplicity, we will assume that social exclusion could be a process created by the
malfunction of societal institutions. Consequently, this malfunction could result in a deprived
living situation of the individual. In terms of social inclusion, we have to ask what the BDH
has done to combat this malfunction of societal institutions. Note that based on the literature,
20 | P a g e
the BDH is not the magic bullet of the national strategy to reduce exclusion. However,
according to Cecchini and Martinez (2011), CCTs must be considered as part of a series of
actions aimed at laying the foundations for an inclusive and comprehensive social protection
system. Consequently, it is important to keep in mind that each program is quantitatively
different. In each case, it depends on whether the main objective is to assure poor families a
basic level of consumption, strengthen human development, facilitate social inclusion through
their access to various government social benefits, or integrate an inclusive set of
interventions (Cecchini and Martinez, 2011). Therefore, we need to observe what is the main
objective and rationale behind the BDH programme and its national social policy guideline.
CHAPTER 3- BONO DE DESARROLLO HUMANO (HUMAN
DEVELOPMENT GRANT IN ENGLISH)
INTRODUCTION
It is imperative to review the history and the importance of the Bono de Desarrollo Humano
(BDH) to understand the actual conditions of the social protection policy in Ecuador. This
chapter will present a brief history of the orientations that have created the evolution of the
BDH and the social protection policy in Ecuador. This chapter will be divided into two parts:
The first part will show the assembling of relevant policy steps and studies that will build
upon the answer of our research question:
-
To what extent is the BDH successful in including families into a wider range of
social protection programmes?
-
And how effective is the social protection system in ending the exclusion, and
fostering social inclusion in Ecuador?
The second part will show the aim and objectives of our study, trying to explain what we want
to achieve with this investigation. This method can help us to obtain the objectives through
the review of the institutionalization of the BDH and the linkage between the BDH and Plan
Buen Vivir.
3.1 History of Social Protection and BDH in Ecuador
According to Cecchini and Martinez (2011), the social protection policy has always been
nationally owned in Latin America. Being part of the public policy agenda, the social
protection policies in Latin American has changed and evolved hand in hand to the sociopolitical and economic movements that have dominated their implementation. For instance,
until the 1990s, social protection in the region was organized around contributory pension or
21 | P a g e
work related insurance (Stampini and Tornarolli, 2012). It was framed under the services that
the state offered in the form of social security and subsidies for private insurance services. As
for Ecuador, over the last two decades, social protection has evolved dramatically. This social
protection evolution has shaped the design and implementation of the BDH and the overall
social policy in the country, creating an innovative poverty and vulnerability reduction
programme (Barrientos and Hulme, 2009).
3.2 History of the BDH
The Bono de Desarrollo Humano (Human Development Grant in English) is a conditional
income transfer programme adopted in Ecuador. This program was adopted as a central
element of poverty reduction strategy. It started as an incentive to compensate poor families
for the reduction in their incomes, resulting from the 1990’s period of macroeconomic and
fiscal adjustments (Bastagli, 2009). Afterwards, its objectives took a shift towards
encouraging poor households to invest in their family’s education and health. The
beneficiaries of this programme are conditioned to send their children to school and to take
them to regular medical check-ups (Arnold et al. 2011).
The transfer also guarantees a minimum consumption level to poor families, while it supports
the two main components of human capital accumulation; health and education. The
education component targets the children of the ages 5 to 16 years old to attend school for at
least 85% of the classes. The health component encourages the mothers of children under five
years old to take them into regular medical check-ups. It is pivotal to note that the programme
also targets poor families whose head of households are 65 years older, or had physical
disabilities, but these types of households are not conditioned.
Many authors suggest that this programme was originally modelled on Progresa, today called
Oportunidades, implemented in Mexico, in 1997(Schady and Araujo, 2006; Samaniego and
Tejerina, 2010). After the Oportunidades programme had been evaluated, its results were
successful in education and health impact. The Ecuadorian government saw the success of
Oportunidades programme and tried to replicate its strategy in order to continue the
successful path in poverty reduction and human capital accumulation. Quoting Handa and
Davis (2006), I need to express that the success of any programme will depend on national
objectives and institutional capacity. Therefore, here I will report the BDH’s origins,
objectives, and targeting.
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3.2.1 Objectives
The main objectives of the BDH are: 1) to extend the human capital accumulation of the
vulnerable population, and 2) To avoid the persistence of transitory and structural poverty.
The BDH was implemented in 1998 as simple cash transfer. Since its origins, the BDH has
been gone through many changes in context and modifications in targeting. As Unda (2013,
p. 03) mentions, this program has evolved from a social pension to mitigate poverty, in the
midst of a national economic and political crisis, to the right of all citizens embedded in the
newest constitution of Ecuador. Therefore, in this study we have divided the history of the
BDH in four stages, which are illustrated and the below table 1.
3.2.2 Origins
In the last decades of the twentieth century, the non-contributory social protection in Latin
America was limited to food aid and subsidies. Ecuador, being part of the movement of
subsidies and food aid, created the Bono Solidario (Solidary Grant in English). The Bono
Solidario was a simple cash transfer. At the time, it was considered a measure to compensate
for the elimination of subsidies in gas and electricity. In contrast to the new BDH, the Bono
Solidario was not conceived as a tool that could contribute to human development nor social
protection. Poor households with children under 18 and those citizens over 65 years old
(Without social pension and with disabilities) were eligible to receive around $15 USD and
$7.50 USD per month transfer, accordingly. However, some experts suggested that Bono
Solidario lacked efficient targeting of the correct poor. Vos et al. (2001) stated that this
selection process had problems with coverage; approximately 42% of the transfers were
channelled to middle-income households instead of the poor.
In 2003, the Bono Solidario was reformulated and renamed. It was transformed into the Bono
de Desarrollo Humano. The new Bono de Desarrollo Humano was created as Conditional
Cash Transfer by merging the Bono Solidario with another school grant for poor children
called the Beca Escolar (School grant in English) (Samaniego and Terinja, 2010). However,
many argue that the enforcement of conditions remained mild or were not enforced at all. By
consolidating these two income transfer programmes, the Ecuadorian government tried to
strengthen targeting measures, and improve the effectiveness of delivering benefits.
According to the World Bank (2009), The Bono Solidario and Beca Escolar were good
programmes in theory but they did not have proper targeting or clarity of purpose.
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Table 1 Historic evolution of the BDH
Period
19982002
20032006
20072012
20132014
Name
type and
registration
Target
Population
/Depurations
Amount of
Transfer
Coverage
Annual
cost and %
of GDP
Bono
Solidario
Anti-poverty
income transfer.
The beneficiaries
registered through
local parishes
Mother with
under 18 years
old children,
Adults over 65,
and persons with
disabilities
$15 USD for
mothers and
$7.50 for
adults over 65
and people w/
disabilities
1,500,000
190 USD
millions.
1% GDP
Beca
Escolar
Pure income
Transfer
School assisting
poor children
$5 USD per
child
145,000
Bono de
Desarrolo
Humano
Conditional Cash
Transfer
Mother with
under 18 years
old children,
Adults over 65,
and persons with
disabilities
$15 USD
1,200,000
0.86%
Bono de
Desarrollo
Humano
Conditional Cash
Transfer.
Beneficiaries
were selected
through SELBEN
survey. Roster
update
Mother with
under 18 years
old children,
Adults over 65,
and persons with
disabilities
$35 USD
1,909,912
760 USD
millions.
1.17%GDP
Bono de
Desarrollo
Humano
Conditional Cash
Transfer.
Depuration and
graduation of
beneficiaries
Mother with
under 18 years
old children,
Adults over 65,
and persons with
disabilities
$50 USD
1,527,486
Author: Virgilio Briones
3.2.3 Targeting
The 2003 transformation aimed to substitute both previously unconditional grants. The new
combination of both programmes used a new method of eligibility called SELBEN (Sistema
de Seleccion de Beneficiarios in Spanish). This new method is used to improve targeting
system. SELBEN is a household proxy means survey. It systematically divides the population
into quintiles and selects beneficiaries based on household composition, education levels,
characteristics of dwellings and access to basic services. The lower score determines the
24 | P a g e
eligibility with the main objective to target the poorest and most-affected Ecuadorians.
Around 90 percent of rural household and 90 percent of households in the most impoverished
urban areas were covered by the survey (Schady and Araujo, 2006).
The transition identified the new grant as conditional cash transfer with a well targeting and
structural design, relying on the idea that the main aim of conditional cash transfer is to
support household’s human development (MIES, 2012). The new Bono de Desarrollo
Humano (BDH) was supposed to have a more direct impact in the human capital of the
population, as well as an impact in transitory and structural poverty. This new BDH was
created to reach the families excluded from access to basic services in education and health. It
targeted families in two poorest quintiles according to the SELBEN index. Also, it targeted
the families in two lower quintiles whose head of households were plus 65 years old or had
physical disabilities. As shown in table 1 above, the BDH has gone through stages of
depuration and expansion of coverage in different periods, creating different numbers of
beneficiaries, which can be seen in the figure 2.
Figure 2 Number of beneficiaries of the BDH per history stage period
2.500.000
2.000.000
Stage 4
1.500.000
Stage 3
Satage 2
1.000.000
Stage 1
500.000
0
1998-2002
25 | P a g e
2003-2006
2007-2012
2013-2014
Source: MIES (2014)
Ecuador’s scheme is renowned because it has managed to integrate the elderly people and the
physical disables into one programme. Many argue that focusing in the composition of the
families is one downside of some conditional cash transfers. There is a wide-spread debate on
the literature with respect of social inclusion on CCTs. For instance, Cecchini and Madariaga
(2011) argue that the exclusion of poor indigent families without dependent children is one of
the major criticisms of these programmes. Furthermore, De la Brière and Rawlings (2006)
states that many CCTs programmes have been criticized for not serving the needs of other
excluded groups such as the elderly or disabled. However, the BDH in Ecuador is one of the
few programmes that include benefits for families with older adults and disabled persons. The
BDH consists of one cash transfers targeting numerous subgroups (Bastagli, 2009). Whereas
other countries have to manage different programmes to cover the elderly and people with
disabilities separately.
According to the MIES 2012 report, the composition of the BDH is divided as shown on
figure 3. This composition pie could be a good sign of the presence of other excluded groups
that are normally not include in conditional cash transfers. In 2012 the distribution was 65
percent of mothers with children under 18 years old, 29 percent of the elderly over 65 years
old without social security and 6 percent of people with disabilities.
Figure 3 Composition of BDH's beneficiaries in 2012
Composition of BDH according to Group of
Beneficiaries
65 % Mothers w/ children
under 18
29% Elderly over 65 years old
6% People w/ disabilities
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Source: MIES (2014)
On the other hand, the BDH does not have a duration time or graduation strategy. The reports
inform that, typically, the programme has a reassessment process whereby the beneficiary
information is verified to re-determine the eligibility. This reassessment process is also called
a depuration process. If the conditions of the beneficiaries have improved and they have
overcome the poverty line determined by MIES (Ministry of Social and Economic Inclusion),
the beneficiary will be no longer eligible for the grant. That is why in the figure 2, it shows a
decline in the coverage from almost two million beneficiaries to about 1.5 million
beneficiaries. According to MIES, 2013 report, this reduction in beneficiaries is due to the
process of depuration that has started at the beginning of this year.
3.3 Expansion of Social Protection in Ecuador
Ecuador’s government claims that Ecuador has sought to make changes to its social assistance
and social inclusion policies. The country is more directly addressing the large problem of
income inequality. The Ecuadorian government claims that the BDH can represent a step
toward setting up a broad social protection system founded on concepts of inclusion and
universal rights (Cecchini and Madariaga, 2011). This argument shows that the BDH is
embedded in appropriate policy and institutions.
Many argue that the expansion of social protection in Ecuador begun in 2007, when president
Rafael Correa took office in January of the same year (Bermeo, 2013; Ray and Kozameh,
2012; Mantilla, 2012). With Rafael Correa in power, social protection became a priority
within government spending (Ray and Kozameh, 2012). Between 2007 and 2012, social
spending increased to more than double as a percent of GDP, from 5.2 percent in 2007 to
more than 12 percent in 2012 (MIES, 2013). The BDH expenditure increased to more than
double, from 0.7 percent of the GDP in 2008 to 1.8 percent in 2012. In the same years, the
BDH was doubled from $15 USD to $30 USD. In 2013 the same administration has increased
the grant from $35 USD to $50 USD. Before 2007, Ecuador was politically unstable. Ten
different governments took power over within a period of ten years. According to Bermeo
(2010), the political instability did not contribute to the continuity and sustainability of social
policies in Ecuador.
According to the World Bank (2014), Ecuadorian economic growth reached 7.8 percent in
2011(the third highest rate in the region). As a consequence, many believe that public
expenditure in social programs has risen significantly. In addition, the role of the new
constitution has empowered the national government to direct its income toward public
investment in infrastructure, health, education and security. The public investment increased
27 | P a g e
from 21 percent in 2006 to nearly 41 percent in 2012 (World Bank, 2014). As figure 4
indicates, between 2003 and 2013, income poverty fell from 37.6 percent to 25.5 percent.
Clearly, the Ecuadorian government continues to make progresses in carrying out inclusive
social policies to fight poverty and inequality.
Figure 4 National Poverty Index-Percentage per year
Income Poverty
Unsatisfied basic needs poverty
60
51,62
46,96
50
40
37,62
36,74
35,09
44,91
41,81
39,42
36,03
36,77
32,76
28,64
30
27,3
25,5
20
10
0
2006
2007
2008
2009
2010
2011
2012
2013
Source: SIISA 2014
3.4 BDH Institutionalization
According to the International Policy Centre for Inclusive Growth (2012), Ecuador has
initiated a new strategy in social protection that redresses its objectives as outlined by the
constitution and the Buen Vivir Plan. In 2007, Rafael Correa’s administration created the
Programme of Social Protection under the Ministry of Economic and Social Inclusion
(Ministerio de Inclusion Economica y Social, MIES). This programme is under the MIES’
umbrella, and it is in charge of the implementation of all non-contributory social assistance
schemes, including the flagship BDH, and others that are shown and explained in table
number 2 below.
This system consolidated all social protection programmes in Ecuador. This re-structuration is
a coordinated institutional and political framework created to enforce the guaranteed rights
established in the 2008 Constitution (Art. 340) (Bermeo, 2012). This structural adjustment
28 | P a g e
becomes a protection mechanism not only against poverty, but also against other shocks that
affect and impoverish families (PPS, 2012). In fostering integral protection, the new-national
system has undertaken several activities to aid other vulnerable and excluded groups.
Cecchini and Madariaga (2011) argue that the exclusion of poor indigent families without
dependent children is one of the major criticisms of Conditional Cash Transfers programmes.
Therefore, this new system intends to integrate all non-contributory social protection
programmes that support those exclude indigent families under one umbrella. A lot of those
non-contributory social programmes are directed to not only families with children but to
other vulnerable and discriminated groups. In the table below, I have summarised all the
programmes under MIES and the Program of Social Protection.
Table 2 Non-Contributory Social Programmes in Ecuador
Programme
Objective
Social Policy Agenda
Strategy
Monthly transfer of US$50
conditional on children’s school
attendance and health check‐ups.
Also includes Monthly pension
for disabled and
elderly people
Bono de
Desarrollo
Humano
Social en
Economic
inclusion
Implement strategies and actions
that
reduce poverty, protect household
consumption and support capacity‐
building and productive inclusion
Credito
Social de
Produccion
Economic
inclusion
Develop and strengthen the
solidarity economy
Social en
Economic
inclusion
Cover necessary private medical
costs for specialised treatments for
patients without private health
insurance
Works with the Ministry of
Health
and local hospitals to ensure
proper coverage of specialised
treatment and transparency in
diagnosis
Coberatura
Social en
de Protección Economic
Familiar
inclusion
Provide a one‐time transfer to
families that lose a member of the
household and cover conditional
funeral costs for a proper burial
One transfer of $500 USD and
funeral expenses
Social en
Economic
inclusion
Support the vulnerable population
during emergencies of natural
disasters
Two emergency transfers
of $45 USD each
Red de
Proteccion
Social
Bono de
Emergencia
Productive credits
Source: IPCIG 2012
We see that the BDH is part of a broader social protection Programme (PPS), through which
BDH users can access other programmes, including productive credit programme and
29 | P a g e
transfers for emergencies caused by natural disasters. The Ministry of Economic and Social
Inclusion indicates that the BDH is a reference that helps for the eligibility and targeting of
other social programmes. The literature supports this by expressing that Conditional Cash
Transfers represent an opportunity for countries to develop an integrated and inclusive set of
social policies (Bastagli 2009). Keeping in mind that the components of social protection are
many, the allocation of the BDH within the social policy in Ecuador is important. It is
important because indicates how successful the BDH could be in including families into a
wider range of social protection.
The BDH was introduced as a short-term intervention, but it has later expanded and extended
in time and scale. As a result, the BDH institutional base is strong. BDH is the star
programme in the county’s social protection policy. Bastagli (2009) points out that the
institution allocation is an important indicator of the positioning of such tools within a
country’s social protection system. BDH is dominating the social protection agenda in
Ecuador, and we can see that the transfer is delivered as the ground of citizenship rights in the
newest constitution, which could help to integrate its beneficiaries to a wider range of social
protection programmes.
3.5 Link between BDH and Social Policy of Plan Buen Vivir 2013-2017
With the new 2008 constitution and Plan Buen Vivir, the coordination of BDH became part of
the Ministry of Social Inclusion. The BDH responsibility lies on the executive power that
vertically goes down the ministry line. This reorganization has become crucial to fortify social
programmes synergies in poverty alleviation. Also, the reorganization has demanded an effort
to improve data collection and administration systems.
According to Atkinson et al. (2003), promoting social inclusion needs explicit and specific
targets and indicators to measure the effectiveness of the policy. The BDH and the Plan of
Buen Vivir have set specific targets, at least in terms of eradicating extreme poverty. The
indicators of poverty reduction could have a great value in pointing out the significant social
inclusion progress in Ecuador. However, we cannot expect them to be a unique result of the
BDH implementation and design. Many argue that this poverty indicator could have to do
with the rise of the oil prices, which is Ecuador’s main income source. Supporting this
argument Handa and Davis (2006) state that while it is relatively easy to find increases in
beneficiaries welfare, actually linking changes in the national incidence of poverty with
expenditure on CCT is difficult. It is difficult because many other factors – particularly
economic growth- play a determinant role. Furthermore, (Valencia Lomelí 2008) points out
30 | P a g e
that the effects of CCT programmes are greater in reducing the intensity than the incidence of
poverty. He means that transfers succeed in lowering the gap between a household’s income
and the poverty threshold but generally do not lift households above line.
BDH and Buen Vivir Plan have a direct executive and ministry line coordination. This line
coordination means that the coordination of the BDH falls to the ministry in charge of the
programme with the approval and suggestions of the presidency. Executive and ministry line
coordination runs vertically from the president (top) towards ministerial and secretarial
entities such as the Planning and Development Secretarial and Ministry of Economic and
Social Inclusion. This line coordination, looking for “good living,” is reflected in the overall
plan. It also inspires efforts to improve the quality of education and health services which are
important for human capital accumulation. This line coordination also ensures that many
excluded groups can have access to alternative programmes, such as university scholarships
and productive credits. This dimension gives the framework to plan in a national level, but it
may create challenges for the government to bring the plan together through sectorial
cooperation.
The new constitution reinforced the capacity of public services. Nonetheless, many argue that
the weakness in capacity and coordination persist (Nehring, 2012). As we know from the
literature, conditional cash transfers’ implementation involves a variety of actors from
different government sectors. The integration of different actors within the public sector is
complicated. Therefore, we can recognize that the collaboration between different actors
could present challenges that need to be addressed in the BDH. At the same time, this creates
a new public institutional structure for the design and implementation of social protection
policies. The issue of collaboration between different actors is central to understand if we
want to assess the effectiveness of the BDH in fostering social inclusion.
The overall goal of the Buen Vivir Plan has given to the BDH a good direction. According to
Waldmuller (2014), the goals of the social policies in Ecuador are defined in the Buen Vivir
and are fully state-led. In some countries where the capacity of public providers is week,
governments have looked for collaboration with private organizations. This is not the case of
Ecuador. The new constitution empowers the State to create a strong public service. The Buen
Vivir plan and the BDH could be characterized as centralized, hierarchic and technocratic.
As I showed in chapter 2, this new constitution created an extensive public agenda, an agenda
with different central vectors and overall direction for the achievement of the good living.
One of those vectors is the distributive policies encompassing the direct transfer and subsidies
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policies. According to Vasconez and Viera (2012), all social assistance programmes take root
in Plan del Buen Vivir. The Buen Vivir Plan is a reflection of the right-based 2008
constitution. Therefore, it is important to highlight this link to understand the public and
institutional structure, which is shown in figure 5 below.
Figure 5 National Plan Buen Vivir 2013-2017 promoting social inclusion
12 National Objectives
111 National Politics
National Strategy
to increase
productivity
Social and
Economic
Inclusion
National Strategy
to achieve social
equality and
poverty
eradication
Lack of integration of disparate projects with multiplicity of overlapping unrelated goals has
been one of the main mistakes of the old social assistance. The BDH is beginning to
encompass objectives for longer-term economic growth and human capital development
through the Buen Vivir guideline. According to MIES report, they are making sure that the
BDH is further developing to promote a shift from fragmented systems of social protection to
an inclusive social policy.
As Plan Buen Vivir (2012) reads, redistribution policies create a new-social inclusion
structure that is based on the imperative of reducing poverty and striving for greater equality
(SENPLADES, 2013). As a consequence, the Ecuadorian National Government is always
defining and implementing policies to establish a sustainable and inclusive process for
development, following the guideline of Buen Vivir Plan. This interaction can be seeing in the
32 | P a g e
figure 5 below that shows how Buen Vivir plan is a guideline for the national strategies to
increase productivity plus social equality and poverty eradication. Consequently, this will
result in social and economic inclusion.
CONCLUSION
This chapter has shown how the BDH programme is particular in its nature because of
emergence, development and management across many years. It is worth noting that the BDH
has progressively improved its actual design and objectives throughout the years. Also, it has
been accompanied by a considerable reorganization of Ecuador’s social policy and
institutions. Nowadays, we see a stronger BDH aligned to government’s policies of
overcoming poverty, generating capacities and fostering integral protection. From a social
protection perspective, Ecuador is becoming increasingly unique by offering not only
programmes of public assistance but establishing rights-based social policies that look for an
integrated and integral programmes that support vulnerable groups. These social policies are
embedded in the 2008 Constitution. Perhaps, new impact evaluations are necessary for
assessing the relationship between the BDH and the new 2008 constitution and its positive
effects on poverty reduction and inclusion.
CHAPTER 4-EFFECTIVENESS OF THE BDH
INTRODUCTION
As the literature indicates, the monitoring and evaluation are key features of CCT social
assistance programmes. Therefore, the implementation of the BDH has been accompanied by
a systematic effort to measure its effectiveness and to understand the broader impact on poor
households. In this study, evaluation results are analysed to draw conclusions about the social
and economic inclusion impact of this programme.
4.1 Evaluating the impact of the BDH
The BDH have used randomized control design as the primary impact evaluation
methodology. Positive impacts have been observed in education, health and consumption
levels. According to the Inter-American Development Bank (2007), the evaluations of this
programme have been experimental. The selections of the beneficiaries into the programme’s
evaluation have been random, solving the biases that could complicate impact evaluations and
thus improving credibility of results.
The results of evaluations are useful to assess their impact and operational performance
(Rawlings and Rubio 2005). Also, the evaluations can make a difference in ensuring
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programme sustainability (Handa and Davis, 2006). Consequently, a series of evaluations on
the impact of the BDH on human development have been carried out by the government of
Ecuador and international institutions. In this study, we have chosen three of the main impact
evaluations of the BDH in order to assess its effectiveness in social inclusion. The impact
evaluations outcomes will help to predict the BDH harmonisation with the Buen Vivir Plan,
and prove empirically about the beneficiaries’ access to more social services. The outcomes
related to these two predictions will help to answer our research questions.
According to the impact evaluation done by Schady and Araujo, in 2006, children from the
age of 6 to 17 had 10 percent higher class enrolment as beneficiaries of BDH. They found that
the school enrolment is higher in the treatment group (BDH beneficiaries) rather than the
control group. It is important to note that results were only observed in children from the first
quintile of the poverty index. There were no observed impacts for those children in the second
quintile. They also found in the same study that child labour decreased by approximately 17
percentage points. The evaluation revealed a great impact of the BDH on child labour
reduction. The probability of children in the treatment group working after intervention of the
BDH was 5.4 to 6.2 percentage points lower than children in the control group (Mantilla,
2012).
As regards consumption levels, Ponce (2008) found out that 25 percent more money was
being spent on food expenditures by beneficiaries of the programme. The intended objective
of using cash transfers to alleviate consumption barriers was confirmed by this evaluation.
Additionally, it got confirmed that more money would be spent on food, and less child labour
would be needed. In contrast, Ponce and Bedi (2008) found that children’s test scores did not
improve in a statistically significant manner as a result of more time spent on schooling.
Therefore, while class enrolment improved, this did not translate into better learning skills
simply as a result of being in school as opposed to somewhere else.
On health assessment, mothers who were part of the treatment group showed better and
improved haemoglobin levels than mothers in the control group who did not receive the BDH
assistance. These results were obtained from the World Bank’s evaluation carried out by
Paxon and Schady. With respect to children, there was significant effect observed in children
of the treatment group. The treatment group showed better physical and cognitive effects,
improvements in haemoglobin levels than children in the control group (Paxson and Schady,
2007).
From these evaluations, it could be implied that:
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First, one main objective of the BDH is succeeding, especially in the short-run. Reducing
consumption poverty is a priority of the BDH. With a short-term minimal consumption relief,
the BDH is acting as an insurance to eliminate the risk in consumption and to guarantee better
nutrition for children. It is confirming that it contributes in making economic growth more
inclusive (Stampini and Tornarolli, 2012) by providing a large and reliable source of income.
The main reason is that the BDH accounts for 44% of the total income in a beneficiary family.
Even though the money usage is in the discretion of the beneficiaries, the BDH is a cash
transfer to be spent on food consumption. It is worth noting that the actual value of the cash
transfer is $50 USD per family.
Second, the BDH objective in the long-run is to promote long-term human capital
accumulation. In terms of long-run capital accumulation, the BDH is acting as a long-term
investment for poor families. On the one hand, we noted relevant reduction in child labour,
which is an important step in fostering social inclusion. On the other hand, contradictory to its
main objective, we note that the enrolment in school itself does not mean learning or long
term human capital accumulation. As Morley and Coad (2003) indicates, it is not enough to
raise enrolment if the quality of education is poor. In other words, increased enrolment may
not lead to social inclusion if there is not actual learning (Handa and Davis, 2006).
Positive impacts have been observed in education, health and nutrition. In the educational
component, the BDH is supposed to cover both direct costs (school fees, school supplies,
transportation cost) and the opportunity cost in loss of income from sending children to school
rather than devoting his or her time to economic activities (Rawlings and Rubio, 2005). In
health and nutrition, the BDH targets children up to the age of 0-5 years old and provides
consumption improvement to the beneficiaries to purchase better food.
Consequently, I can state that these evaluations present important information with key
implications that enriches the debate of what precisely social inclusion and long-term human
capital accumulation means. As final words, the BDH helps to alleviate short-term burdens
and increase demand for services, but do not break longer patterns of poverty related to
services supply.
4.2 Analysis of Changes in the BDH
The Ministry of Economic and Social Inclusion (MIES) states that evaluations of the BDH are
technical and rigorous mechanisms that can influence the cycle of public policy. Furthermore,
the conceptual framework above indicates that the evaluations and monitoring provide
essential information about CCT programmes' effective design. The Ministry of Economic
35 | P a g e
and Social Inclusion indicates that all BDH’s evaluations have been used to strengthen
aspects of the programme that were not working properly and to make the necessary changes
to improve results.
In these evaluations, the BDH has showed significant results. Evidently, it shows that the
BDH can improve and smooth consumption and income, which translates into better
household wellbeing. Also, the BDH can strength human capital in terms of education and
health through conditionality. However, there is no strong evidence about its role in
supporting productive activities to move people out of poverty. The Ecuadorian Government
has made use of the evaluations to modify or eliminate what has not worked in the BDH
(MIES, 2012). For instance, the issue in lacking support for productive activities has led to the
creation of the Credito de Desarrollo Humano (Human Development Credit in English).
Recently, the BDH has been combined and associated with credit for the development. This
credit provides an annual loan of up to $420 USD. This loan offers the beneficiaries of the
BDH access to convenient and affordable capital. Such schemes are claimed to be special
tools that can provide cumulative positive effects on households, such as helping to acquire
assets, and get access to credit facilities in the future.
On one side of the coin, many believe that this credit is only an anticipated cash transfer
(Ponce 2012). Ponce argues that the human development credit could generate results in
opposition to the main characteristic of the BDH, which is to condition families into sending
children to school and regular medical checks up. He indicates that the family will
discontinue the conditionality by receiving the credits because they have received a chunk of
the grant in advance. Consequently, destroying the main objective in breaking the
intergenerational poverty cycle could be an implementation distortion. On the other side of
the coin, we have the success stories reported by the Ministry of Economic and Social
Inclusion of Ecuador. These stories indicate how beneficiaries of the BDH have graduated
with the help of the micro-credit assistance.
Traditional social assistance strategies have focused on short-term poverty alleviation (Hulme
et al. 2012). In contrast, many argue that households facing chronic poverty are more likely to
require a longer time window of support to tackle accumulated deficits in productive capacity
and basic capability (Barrientos and Lloyd-Sherlock, 2003). In support of this argument, the
literatures claims that the limited duration of conditional cash transfers reflects that this tool
only acts as a short-term poverty alleviation. For instance, some conditional cash transfers in
Latin America have duration of two or five years, such as a Red de Protección Social program
36 | P a g e
in Nicaragua. This programme in Nicaragua only last about five years because it failed to
acquired more funding for the continuation phase of the programme (Pena, 2014). It is clear
that programmes, like the one in Nicaragua, limit the possibility to promote human capital and
provide long-term social inclusion. The main reason is that these tools have such short time
duration. However, the research literature on BDH shows that the program has been
implemented for more than 15 years, which could be a perfect indicator that the programme is
functioning as an inclusive part of the country’s social assistance policy.
Another analysis is in terms of supporting demand for schooling and health services. The
BDH has increased demand for schooling and health services. It has recognized the
importance of overcoming demand-side barriers and has become the basis for the organization
of social services’ networks (Bastagli 2009). The BDH has invested in human capital by
providing an income that can cover the direct costs of access to health and education services
such as uniforms and transportation to service sites. The BDH income could complement
traditional supply-side mechanisms, such as general investments on schools, scholarship,
health services and other providers of social services. This complementation ensures the
promotion of social and economic inclusion.
Some critics believe that the government should allocate more available resources to
maximize the impact of the BDH by providing better health and education services (the
supply-side). Critics to the BDH have been reported that the beneficiaries do not receive
complementary training intervention such as nutritional workshops, informative supplements,
and other complementariness that could help to positively influence the beneficiaries’ mindset and behaviour. Many believe that to create a long-lasting impact there is also a need to
improve poor’s behaviour groundwork. Therefore, training and workshops are essential.
Family guidance and psychosocial work are necessary. This component is oriented towards
overcoming psychosocial and cultural barriers to achieve full social inclusion of programme
users (Cecchini and Madariaga, 2011).
Nonetheless, there could be an issue with extra services provision in CCTs such as training,
credits, workshop, etc. In fact the issue could arise when there are too many services
embedded into a CCT without specific objectives and functions. If CCTs programmes and
complementary services do not have specific functions and objectives, the successful
cooperation between social assistance and the suppliers of health, education and other
services are hard (Bastagli, 2009). The integration of different actors within the public sector
is complicated. The integration of many services provided by a conditional cash transfer could
37 | P a g e
become an issue called the Christmas Tree Syndrome (Cecchini and Martinez, 2011). This
Christmas Tree Syndrome refers to the provision of too many direct and indirect services
embedded in the conditional cash transfer programmes. Cecchini and Martinez (2011)
mention that involving too many services in CCTs could diverge or contradict the main
objectives of the CCT. The excess of service without specific objective could be harmful for
the whole purpose of the programmes, like too many ornaments in a Christmas tree that can
cause its fall.
The indirect services are the complementarities or services that are not provided by the
programme itself. The direct service provision is when the service is provided by the same
program. One of the examples of service provision is the labour-market insertion and income
generation; links have been established with programmes run by sector ministries, mainly
education and employment. Ecuador’s Human Development Credit programme is an
example. In this credit programme, the main users are recipients of the BDH (Cecchini and
Madariaga, 2011).
In contrast to above argument, according to Bouillon and Tejerina (2007), comprehensive
programmes that complement supply-side interventions with demand side-components (and
vice-versa) and take a multi-sectorial approach seem to have a greater impact and contribute
to the sustainability of benefits after the programme has been completed. This is the case that
appears in this evaluation of the BDH. The relevance of complementary policies is also
highlighted by the results in poverty alleviation. According to the Ecuadorian Government,
Ecuador’s social program budgeting has increased while supporting productive employment
opportunities. Valencia Lomelí (2008) highlights the importance of actions in favour of
building capabilities for poor households to obtain better jobs, and consequently better
incomes. In this sense, the public policy is important in supporting productive employment
opportunities and BDH’s beneficiaries training. The effectiveness of the BDH could see
limitations in the absence of significant productive job creation. While there is evidence that
microcredit increases the income flows of borrowers, there is also evidence that
complementary components, such as training, can translate into better Socioeconomic
indicators as well.
4.3 Summary of Critical Assessment on Evaluations
The evaluations have proved its effectiveness, confirming the capability of the BDH to raise
income, and have immediate positive multiplier effects on poor families. According to
Barrientos and Niño (2011), social assistance programmes succeed in reaching out to the
38 | P a g e
poorest and facilitate investment in their productive capacity. Supporters of the BDH argue
that the BDH is a special tool that can provide cumulative positive effects on households,
such as helping to acquire assets, and get access to credit facilities in the future. In this case,
the evaluations of the BDH have not proved acquisition of productive assets. Similarly, in
terms of human capital dividends, the effects of the BDH programme nor the Human
Development Credit cannot yet be measured. The main reason is that children from the first
households to receive transfers in 2003 are only now beginning to graduate from secondary
school. As the literature mentioned, it is too early to answer about impacts of CCTs in longterm human capital accumulation.
Nutritional and Health interventions in early life are significant determinants of improving
people’s productive capacity in adulthood. The BDH is an incentive for poor households to
use available health, education services, and credits for productivity. The study suggests that
the BDH strengthens the link between service providers and the poor. This stronger link helps
to exploit complementary social programmes that the government of Ecuador is running, such
as those listed in table 2. However, it is important to note that CCT are not a substitute for the
provision of high-quality supply-side investment (Rawlings and Rubio 2005). Rather, the
BDH only complements those services by addressing the problem of insufficient demand for
health and education services from the poor. Therefore, it is more important to have highquality services in the supply-side, rather than a condition in poor-quality services inputs.
CHAPTER 5-FINDINGS AND CONCLUSIONS
How effective is the social protection system in ending the exclusion, and fostering social
inclusion in Ecuador? The results obtained from this BDH assessment can prove that the BDH
has a significant impact in promoting social inclusion. First, the BDH have acquired
important roles in poverty alleviation and efforts to reform social protection throughout its
history. The BDH was introduced as part of a major reform of social assistance that replaced
shorter-term less well-targeted programs such as Bono Solidario and Beca Escolar. However,
it is relevant to underline that the BDH has coincided with a decade of economic growth that
could have been a possible cause of poverty reduction and expansion of social protection in
Ecuador.
Second, 2007 is a remarkable year in the social protection history of Ecuador. Programme of
Social Protection was created as a mechanism not only against poverty but against other risks
that affect poverty. The Program of Social Protection system has undertaken several activities
to aid social groups that are found in vulnerable situations. These efforts have been very
39 | P a g e
influential in the operation of the BDH. The BDH was accompanied by the adoption of a new
constitution that provides control through planning and public management. With the aim for
sustainable long-term achievements, this new constitution adopted rights-based approach to
social protection (Cecchini and Madariaga, 2011) and created significant changes in power
structures and institutional reorganizations. The plan Del Buen Vivir and the BDH have taken
ownership on the role and responsibilities in long-term investment in human capital. Clearly,
this study has shown that the government in Ecuador continues to make strides in the
implementation of inclusive social policies to combat poverty and inequality. In Ecuador a
social policy has been accompanied by significant efforts of reorganization and institutional
redesign. However, it is still too early to call for victory.
To what extent is the BDH successful in including families into a wider range of social
protection programmes? The BDH is the flagship programme of social protection policy in
Ecuador. This importance shows its transition from a minimal safety net to an entrance gate
that allows poor households to entry into a long-term broader inclusive social policy. In the
80’s and 90’s, social protection in Ecuador focused more on contributory social protection
programmes. With time, we see more transfer mechanism to vulnerable groups, helping them
to overcome short-term poverty shocks but intending to foster human capital accumulation
among the younger population.
This study also revealed that conditional cash transfers have to fit within broader institutional
reforms of social and economic policies that will allow effective inclusion and poverty
reduction to take place. Despite the efforts at Inter-institutional coordination, the BDH is
inserting families into wider safety net by linking the beneficiaries with other programmes
such as micro credits and business development. In this study, I found a stronger social
institution that at least tries to include the most vulnerable under the umbrella of public
insurance and social protection. From a policy perspective, it is important to remark that the
BDH plays an important role in social policy of Ecuador. BDH forms part of a broader social
protection programmes network, through which BDH beneficiaries can access other
programmes, including the solidary productive credit programme, housing credits and more.
The Ecuadorian Government’s main instrument for public policy is the National Plan Buen
Vivir. It guides the governmental actions. The social protection in Ecuador is following
objectives as outlined by the Buen Vivir Plan. As a consequence, the social protection is
making an effort to protect people from vulnerability risks and to prevent them from falling
into the trap of inter-generational poverty. Supporters of conditional cash transfers have given
40 | P a g e
great importance to the role that public policy can play in achieving both economic and social
goals. Therefore, I can assert that policy is a powerful instrument that can be used to enhance
economic growth and combat poverty at the same time.
Nevertheless, the quality of services that accompany the BDH and other social programmes
need improvement and close follow-up. The maximization of impact on poverty and social
inclusion will depend on the improvement in quality of attached complementary services and
training programmes. Therefore, this assessment is suggesting following up closely the
development planning process in alignment with the BDH in Ecuador.
In general terms, we note that Ecuador has learnt a lot of lessons in terms of social protection
throughout the years. In particular, this study demonstrates that the BDH had to apply big
reforms to eliminate distortions in the design and implementation in order to avoid the misstargeting and confusing conditionality. It had to apply conditionality and restructured the
objectives of the programme. However, up-to-date, the BDH programme is still developing
the application of policies that promote productive production from family entrepreneurship,
and generation of more sustainable jobs and incomes.
It could be recognized from this study that social inclusion requires both long-term and shortterm actions. Also, rather than focusing only on the demand-side, the BDH complement
traditional supply-side mechanisms, such as general investments on schools, scholarship,
health services and other providers of social services. This mechanism ensures the promotion
of social and economic inclusion. Nowadays, we see a human capital accumulation
investment and long-term social assistance investment. Also, we see an increment in public
investment and reduction in poverty. The public investment increased from 21 percent in
2006 to nearly 41 percent in 2012. Between 2003 and 2013, income poverty fell from 37.6
percent to 25.5 percent.
The new form of social assistance has arrived in Ecuador. The UNDP (2014) states that Latin
America is a testing ground for innovative and sustainable development. Therefore, Ecuador
might be a pioneer in the innovation of sustainable development. The BDH is following
rights-based approach via the guidelines of the Buen Vivir Plan. This right-based social policy
approach has created a broader and wider social agenda and network, which has to be more
integrated. However, the integration of different actors within the public sector is
complicated. The BDH in terms of its objective, design and target population does not need a
large scale reform to fit in with the Plan Buen Vivir. In the area of long-term inclusion and
41 | P a g e
poverty alleviation objectives, the BDH needs more evaluation and monitoring. It might need
reform to maximize coverage in targeting and coordinating social assistance policy.
Historically vulnerable groups have been excluded from public social programmes. To some
extent, the BDH has been the key instruments to redress this exclusion. However, more
coverage is needed. In this study, I have determined that the BDH’s coverage targets many of
the poor, but it is not yet universal. The programme focuses on poor households with children,
elderly over 65 without social security, and people with disability. The BDH might only cover
about 70 percent of the poor population, which is far less from universal coverage.
The analysis presented in this dissertation suggests that the BDH needs to create an overall
harmonization of social assistance policies. BDH needs better coordination with other social
programmes in order to strengthen synergies in social inclusion. Yes, the BDH is inserting
families into the wider safety net by linking the beneficiaries with other programmes such as
micro credit and housing programmes. Nevertheless, the Ecuadorian government action to
maximize economic production must continue to be accountable to social equity. In the
literature, there is an increased recognition among policy-makers that this type of
emancipation is not contingent solely upon access to CCT programmes but depends on the
insertion into the wider economy and social system. The BDH might need a stronger link with
programmes that support labour market insertion and employment in order to provide
incentives for graduation and opportunities for moving out of poverty.
Additionally, the BDH needs a graduation policy. In this study, it is clear there is an absence
of an exit strategy that supports the beneficiaries that are no longer poor. As Bastagli (2009)
states, the graduation in the BDH would naturally happen with graduation of their children
from secondary school. This exit rule could be dangerous because it will leave the families in
more vulnerable situations than how they started. Therefore,
In conclusion, this paper contributed to the body of work on the impact of cash transfer
program in social inclusion and the linkage with planning and development. There is not a
general agreement on how the concept of national development should be translated into
practice. The Ecuadorian experience provides crucial implications for the world. There is a
parallel link between the BDH and the National Development Plan Buen Vivir in terms of
eradicating poverty and social exclusion. There is indeed a close connection. This study
highlights the strength of the linkage between the National Development Plan and the BDH,
but this might present potential limitations in terms of multi-sectorial collaboration. Clearly,
Ecuador has adopted a strategy for combating poverty and social exclusion. Theoretically, the
42 | P a g e
initiative of the Buen Vivir plan is very promising, but it could be too early to assess its
success or failure. Social indexes are the only one that will pronounce its success in the future.
Both poverty and social exclusion are multidimensional issues; therefore, multidimensional
approaches to combat both of them need to continue.
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