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Unconditional Cash Transfers: Will Redistribution in Bolivia Work?

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https://ir.library.oregonstate.edu/concern/graduate_projects/nz806126s

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  • The Bolivian government is using a portion of the rent generated from its fossil fuel reserves to fund unconditional cash transfers as a means of redistributing resources. Although some countries have enacted conditional cash transfers in the past, these unconditional transfers are unique since they only have been implemented in a few countries. This study examines the impact of these policies through the results of interviews conducted in El Alto, a poor city outside of La Paz. Qualitative evidence shows that the cash transfers provide a significant positive impact on beneficiaries. The transfers help create human capital by elevating the quality of recipients' diets, providing educational supplies to children, helping recipients obtain medicines and medical care, and allowing them to save for the future. Problems regarding the handout of cash transfers include lack of standardized requirements for receiving them, misspending and abuse among the beneficiaries and their family members, and corruption of local officials. There are also some problems with targeting the eligible population. In a country with high levels of corruption, less formal institutions in relation to other developing countries, the effectiveness of these policies are subject to debate. The discourse used to promote the program is very particular. The government no longer allows international corporations to exploit the natural resources; instead, they tax foreign extractors in order to fund these social programs. The government launched the cash transfer program in way that could be interpreted as self-interested (clientelistic), since the president and the government are strongly associated with the program. This paternalistic approach has been used selectively in presidential campaigns. The social construction framework provides a lens through which we can analyze the cash transfer beneficiaries as dependents who are slowly being empowered by the government through economic incentives and moving to a more positive place in the spectrum of Bolivian society. It also helps us understand how the government targets this population because of their electoral potential. In order to understand the real effect of these policies at the national level, more qualitative and quantitative analysis is needed throughout the country.
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