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2019 (2)

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Book
Using Referenda to Improve Targeting and Decrease Costs of Conditional Cash Transfers
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Year: 2019 Publisher: Washington, D.C. : The World Bank,

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Abstract

Cost-effective allocation of conditional cash transfers (CCT) requires identifying recipients with low opportunity costs who might change behavior. This paper develops a low-cost approach for improving program implementation by using a stated preference, referendum-style survey question to calculate willingness to accept (WTA) for CCT contracts. This is illustrated in the context of Mexico's Payments for Ecosystem Services Program, with the paper finding that the estimated social cost based on WTA is substantially lower than actual payments. Simulation of three geographic targeting approaches shows that joint selection using deforestation risk and WTA could increase program impact under the same budget. The paper also simulates modified payment schedules based on predicted WTA and demonstrates that these could reduce program cost.


Book
Can Environmental Cash Transfers Reduce Deforestation and Improve Social Outcomes? : A Regression Discontinuity Analysis of Mexico's National Program (2011-2014)

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Environmental conditional cash transfers, or "payments for ecosystem services" are a centerpiece of global efforts to protect biodiversity, safeguard watersheds, and mitigate climate change by reducing forest loss. This paper evaluates the impacts of Mexico's national payments for ecosystem services program, which provides five years of payments to landowners in exchange for maintaining and managing natural land cover. Using a regression discontinuity design, the paper studies impacts on environmental, socioeconomic, and social capital outcomes for the 2011-14 program cohorts. The analysis finds that treated communities increased management activities to protect land cover, such as patrolling for illegal conversion or combatting soil erosion (by 48 percent compared to controls). The program reduced the loss of tree cover in areas at high risk of deforestation (by 29 percent compared to controls), with effects being larger for those that have been in the program the longest (38 percent compared to controls). These results are similar to estimates of impact for earlier program cohorts and continue to highlight the importance of targeting the program to areas of high risk of land cover loss to increase environmental effectiveness. The program continued to reach poor communities and households, but estimated impacts on household wealth indicators are small in magnitude and not statistically significant. These results indicate that community-level conditional payments did not harm household-level socioeconomic indicators, a key safeguard requirement of conservation policies of the United Nations Programme on Reducing Emissions from Deforestation and Forest Degradation. The data also show that payments for ecosystem services significantly increased community social capital-the institutions, attitudes, and values that govern human interactions-(by 9 percent compared to controls), and these externally provided incentives did not crowd out household contributions to other community work.

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