Giving ca$h 
without any strings attached

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After Mexico’s economic crisis in the mid-1990’s, Santiago Levy, a government economist, proposed getting rid of subsidies for milk, tortillas and other staples, and replacing them with a program that just gave money to the very poor, as long as they sent their children to school and took them for regular health checkups. 

Cabinet ministers worried that parents might use the money to buy alcohol and cigarettes rather than milk and tortillas, and that sending cash might lead to a rise in domestic violence as families fought over what to do with the money. 

So Levy commissioned studies that compared spending habits between the towns that received money and similar villages that didn’t. The results were promising; researchers found that children in the cash program called Oportunidades were more likely to stay in school, families were less likely to get sick and people ate a more healthful diet. The payments would almost always go to women who ensured that the money didn’t get spent on booze or cigarettes, many of whom even invested a chunk of what they received. Today, more than six million Mexican families get cash transfers.

Oportunidades has inspired dozens of countries worldwide.
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Posted April 2014

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