Stephen Kidd looks at the recent shocking news that Mexico’s Prospera programme has been abolished and explains why it should come as a surprise to no-one.

Stephen Kidd

The big story in the social protection world last week was the news that Mexico’s Prospera programme is to be abolished after 21 years. Formerly known as Progresa and Oportunidades, it had become an iconic programme for advocates of conditional cash transfers (CCTs) and widely disseminated internationally. It would be hard to count the number of articles written about the achievements of Prospera, as well as the many international workshops in which its successes were trumpeted and the numerous study tours to Mexico by governments from across the world to worship at its feet and take its wisdom back home. The World Bank, in particular, has given prominence to Prospera in its messaging – it calls it ‘A model from Mexico for the world’ – and has encouraged other countries to follow its example. It is no exaggeration to say that many of the world’s CCT programmes owe their existence to Prospera. It even served as the model for a short-lived attempt to introduce a CCT to New York City. As with Brazil’s Bolsa Familia, it became a truly mythical programme.

Yet, now it’s gone. The big question is why?

A part of the answer is found in the political economy of targeting. Unfortunately, Prospera is just the type of poverty-targeted social protection programme that, for many years, we have warned is vulnerable to being cut. Poverty-targeted schemes are often unpopular with the majority of the population since, while they finance them with their taxes, they are unable to access them. Indeed, in a World Bank publication on CCTs, Fiszbein and Schady (2009) have argued that many poor relief schemes in middle-income countries were made conditional to overcome their unpopularity: taxpayers could be convinced that their taxes were not being used as free ‘handouts’ to ‘the undeserving poor.’ The same logic was at play during the 19th Century with England’s Poor Laws which shrank dramatically in size as democracy strengthened, with middle class voters complaining that their taxes were being wasted on the poor. The recipients were unable to oppose the shrinking of their programme since, as Amartya Sen (1995) has pointed out, ‘the poor’ are a relatively powerless group.

The same fate has always been likely to befall modern-day CCTs as democracy strengthens, since their design is very similar to 19th Century poor relief. In fact, many were first implemented when democracies were weak or non-existent. Unfortunately, despite the World Bank – in 1990 – highlighting the same risk, it nonetheless travelled the globe preaching the Prospera model to low- and middle-income countries, convincing government after government to take loans for CCTs. (In fact, one of the complaints of the Government of Mexico is that, despite abolishing Prospera, it will still be repaying a World Bank loan for the programme until 2021).

So, when the Government of Mexico decided to abolish Prospera, there wasn’t a powerful constituency in place to oppose the decision. It’s not surprising that the majority of the population were not going to defend the programme since, although they’d been paying for it through their taxes, they had been excluded from its benefits. The fact that the abolition has happened without, apparently, mass protests on the streets probably indicates that it has been a relatively popular move among the majority of the population. It may well be an even more popular move given that Prospera’s funding has been reallocated to two universal schemes which will benefit everyone across the income distribution, including those living in poverty (see below for more details).

A further challenge for the Prospera programme – which further enhanced its vulnerability to closure – is that it probably didn’t even have the support of the majority of those living in poverty. Hidden beneath the good news stories emanating from the programme’s advocates has been the reality of a poor quality scheme for the poor, from which the majority of ‘the poor’ have been excluded: in other words, the truth behind the myth.

A soon-to-be published study on targeting effectiveness by Development Pathways and the Church of Sweden highlights the failure of Prospera’s targeting and how it resulted in the exclusion of the majority of families living in poverty. Figure 1 shows who benefited from Prospera across the welfare distribution, from poorest to richest [1]. Those to the left of the vertical red line were the target population, yet, in 2016, 55 per cent were excluded. Furthermore, the re-targeting for Prospera benefits has taken place only rarely, in some locations every ten years or more, creating massive barriers to access for those living in poverty. In effect, an almost permanent clientele of Prospera recipients was created while the majority of those living in poverty remained on the outside.

Figure 1: Targeting effectiveness of the Prospera programme (2016)

Targeting on Prospera has always been inaccurate, divisive and perceived as arbitrary. Early qualitative studies of the programme described how selection for the scheme created tensions, jealousies and conflicts within communities, undermining social cohesion (Adato 2000). To a large extent, this was due to the programme employing a proxy means test (PMTs) and an anti-social Registry to select recipients. As is now well-known, PMTs generate high targeting errors with selection appearing to be similar to a lottery. As a Mexican community doctor told Adato: ‘‘Frankly, I don’t know how they got the data for Progresa because there are families here in this community who are poor, poor. There are large families that do not have support from Progresa and we have proof. I have been here eight years and know the entire community inside out … and I’ve found that there are many poor people who do not have Progresa and we do not know why they have been left outside the program.’

Prospera has also been well-known for its use of sanctions, punishing families unable to comply with the programme’s conditions by withdrawing the transfer. Throughout the life of the programme, more and more conditions were added to the scheme and it is hard to escape the conclusion that it was often used – probably unintentionally – as a means of controlling and subjugating Mexico’s indigenous population and other marginalised groups. Further, the obligation to comply with the conditions was placed on women, which not only perpetuated negative gender stereotypes but absorbed precious time that they could have spent on other things.

Mexico’s current government is, unsurprisingly, highly critical of Prospera. The national coordinator of the programme – Leticia Animas Vargas – has recently described its many challenges. She characterised the programme as a system of control in which recipients of the scheme were obliged to undertake a range of tasks, such as attending political meetings or voting for the ruling party. She claims that ‘facilitators’ of the programme – around 300,000 in total – were agents of political parties (not an unusual practice within CCTs). She also highlighted widespread corruption, noting that the value of the transfers received by Prospera beneficiaries was 30-40 per cent less than it should have been. She further claimed that women would often go to compulsory sessions at health clinics, where they would have to pay doctors and nurses a bribe to sign their attendance sheet, while not receiving any medical attention. No doubt, some of Vargas’s specific claims will be contested but it is evident that Prospera has experienced significant challenges, many of which are typically found in poor relief schemes.

In summary, therefore, Prospera has been a classic programme of the neoliberal right – a combination of low spending, low taxes, sanctions and the exercise of control over vulnerable families – and it is no surprise that it is a socialist President, Manuel Andres Lopez Obrador, who is killing it off. Yet, what is replacing it?

Recently, there have been two other major social protection policy initiatives in Mexico. The first is a universal scholarship programme, Becas Benito Juarez. It will give grants to all teenagers attending upper secondary education in public schools. Its aim is to tackle the challenge Mexico faces of only 59 per cent of children finishing secondary school, with many leaving at around the age of 15 years due to financial constraints. The other initiative is to replace the benefit-tested 65 y Más social pension – which reaches only 46 per cent of households with older people [2] – with a truly universal old age pension, while also doubling its value.

Both initiatives appear to be laudable and progressive and, given their universal nature, are likely to be popular with the majority of the population and, as a result, much more sustainable than Prospera. Let’s hope that they are implemented as promised. Nonetheless, the disappearance of Prospera leaves a massive gap (one which it only partially filled anyway). What happens now to those children below the age of 15 years who will no longer receive financial support from the state? As in most countries, the majority of Mexico’s children would benefit from access to financial support.

A conference this week in Geneva on universal child benefits – hosted by UNICEF and the ILO – should act as a guide to Mexico. It would cost Mexico only one per cent of GDP to establish a universal child benefit for every child up to the age of 15 years, offering 660 pesos (US$34.50) per month or around 4 per cent of GDP per capita (a good child benefit internationally tends to offer at least 4 per cent of GDP per capita). This would bring about meaningful change in the lives of Mexico’s children, in particular among those living in the greatest poverty, including the former recipients of Prospera. A universal scheme will be the only way of ensuring that all children are reached while it will also treat all children equally, whether they are indigenous, mestizo, white or any other ethnic group. Poverty targeting has failed time and again in middle-income countries: let’s remember that a definition of madness is repeating the same thing over and over, while expecting a different result.

The good news is that President Lopez Obrador appears to have recognised the value of universal schemes. So, hopefully an inclusive child benefit will be his next big – and very popular – initiative (but please don’t forget a comprehensive system of disability benefits, in particular for children!).

Image: Photo by Johnny Miller, founder of Unequal Scenes, used with permission, thank you.

End notes

1. Analysis undertaken of the 2016 Encuesta Nacional de Ingresos y Gastos de los Hogares.

2. Source: analysis by Development Pathways of the Encuesta Nacional de Ingresos y Gastos de los Hogares, 2016