Discuss the merits and potential problems of the two policy options you have been allowed to suggest

Discuss the merits and potential problems of the two policy options you have been allowed to suggest

In 2009, the government of Nicaragua decided to discontinue its largest conditional cash transfer program, and the country has not had such a program in place since then.

You have been hired as a policy advisor to the Nicaraguan President, who has recently become interested in exploring the feasibility of re-introducing transfer programs in one of two fashions:

1) Conditional Cash Transfer Program (CCT) – A CCT program is one in which the government will provide periodic cash transfer programs to low-income households as long as the recipients meet certain requirements, which often involve school enrollment for young children in the household, repeated doctor visits for pregnant

women and periodic health check-ups for household members.

2) Unconditional Cash Transfer Program (UCT) – A UCT is a program that simply provides low-income households with cash transfers, with the underlying ideology being that these households know how to best spend these transfers.

While CCTs became largely popular at the beginning of the century, there has been a recent policy push to consider the merits of UCTs, which may allow household to spend their transfers as they best see fit. Poor families in Nicara

Write a 3 page memo to the President which includes the following:

– A discussion of the country’s current economic context, focusing particularly on the problems most directly relating to cash transfer programs: poverty, education and health.

o 2 paragraphs. – Discuss the country’s’ experience with a conditional cash transfer program, which includes your overall assessment of the program’s success. o 2 paragraphs.

– Discuss the merits and potential problems of the two policy options you have been allowed to suggest – o What is the evidence from other countries on the merits of UCTs? o Discuss (briefly) the extensive evidence on the impacts of CCTs. o 3 paragraphs.

– Include a policy recommendation as to whether Nicaragua should implement a CCT, UCT or neither.

You have been hired as a policy advisor

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