The Politics of Cash Transfers in Chile and Ecuador – Preliminary Findings

Dr Romina MiorelliUniversity of WestminsterSLAS Conference University of Manchester April 2013

AbstractThe paper is based on fieldwork done in the context of a research focused on observing how institutions, socio-political configurations (actors and their ideas), and discourses affect the design, implementation and reformulations of Conditional Cash Transfer programmes (CCTs)The case studies selected are Chile and Ecuador – Chile Solidario-Ingreso Etico Familiar and Bono de Desarrollo Humano (BDH).This presentation proposes general comments and preliminary analyses drawing on initial and exploratory interviews done between 18th of March and 5th of April 2013.

Paper StructureContribution to existing literature, theoretical perspective and selection of country cases.

Provisional core findings

Methodological aspects

General comments and tentative analysesby country in chronological orderby salient debates/issues

This Research and Existing Literature on

CCTsThe research seeks to bring in the political dimension into the analysis of CCTsDifferent from impact evaluation analyses of CCTs Research seeks to contribute to recent development in the analysis of politics of CCTs done from different perspectives:

Analysis of clientelism (eg. Ponce on Ecuador)Political Econonmy based anaysis (eg. Lindert and Vincensini on Brazil)Policy diffusion and Epistemic Communities based analyses (Osorio Gonnet, 2012a, 2012b and Borges Sugiyama 2012 on Ecuador and Chile) with a focus on institutions (Martínez Franzoni and Voorend 2012 on Chile)

But with a different ontological starting point…

Theoretical ApproachThe research seeks to bring in the political dimension into the analysis of CCTs

bargaining and interests-based processes as well as institutional constraints and incentives underpin decision-making…but politics seen centrally in terms of how these processes are embedded in discourses

that are articulated and rearticulated (in rhetoric and praxis) to struggle to prevail over other discourses in different contexts or moments in which policy design or reformulation take place.

From a ontological view point discourses are central, but from an empirical viewpoint the research seeks to remain open to what the fieldwork findings point out to in terms of how and which of these factors – institutions, actors, ideas – mattered.

In other words, the way in which these factors matter in the process of policy formation are to be found in the particular case studies, so this cannot be regarded as “scientific law” and needs to be deconstructed and discovered inductively case by case.

Selection of Country CasesTwo small South American countries, but two very different cases…

Wealth1998-2011: Chile GDP pc us$9231, Ecuador us$3167but similar income income inequality: GINI around 0.53 for 1998-2011 in both countries.

Povertyin 2000, when the CCTs under analysis here were starting to take shape… Ecuador: 38% of the population were poor (less than us$2/day) and 21% were extremely poor (less than us$1.25/day); Chile: 5.6% poor, 2.3 in extremely poor.

Development StrategiesChile; welfare state developments mid-20th Century; shift to neoliberalism under Pinochet (1973-1989)Ecuador: no significant welfare state institutions mid 20th Century, military dictatorships more progresist and developmentalist, 1980s-1990s: hybird and weak political will and support for neoliberal reform.

PoliticallyCurrently: Chile, centre-right coalition governemnt; Ecuador: government associated with radical left, or 21st Century SocialismAt the time of CCTs emergence: the opposite, Chile: centre-left coalition in government, Ecuador: neoliberal-associated governments.Also: Chile, rule of law and institutionalism whereas Ecuador fragmented political parties since democratization

Sources: WDI, World Bank, data avaiable online at:http://databank.worldbank.org/data/views/variableselection/selectvariables.aspx?source=world-development-indicators#s_g

Why Different Cases?Differences in the design are related to “objective” differences? Or do they rather respond to different ways of interpreting these characteristics in particular historical contexts?Interest in checking whether - notwithstanding different country characteristics - politics, and therefore discourse (as rhetoric but also as praxis), could have had a crucial role in the design and transformations of these CCTs programmes. Politics could explain, beyond technocratic design linked to countries’ specific structural characteristics, how a wave of CCTs diffusion acquired the specific features they acquired in these different countries and within countries with changing governments’ orientations.

Fieldwork: Methodological AspectsInterviews done between the 18th of March and the 5th of April 2013 in Quito, Ecuador, and Santiago de Chile.

21 interviews to policy designers, implementers and social actors related in different ways to design and implementation of BDH and Chile Solidario-IEF and at different moments between 1998 to the present. Interviewees included actors such as social areas (or similar) National Ministries, programme directors, academics and NGOs/think tanks people.

In Ecuador, 9 interviews in total:3 to policy designers, 3 to policy implementers,3 to non-governmental sector people (2 academics, 1 NGOs/int’l org)

In Chile, 12 interviews in total3 to ex-Ministries 3 to policy designers,4 to policy implementers2 to non-governmental sector people

Interviews format: highly un-structured, tailor-made to each interviewee, recorded and notes taken, most lasted between 60 and 90 minutes.Identification of interviewees: key informants (2 to 3 in each country) and snow-ball technique.

Provisional Core FindingsRegarding previous analyses about the politics of CCTs in these countries, the research so

far has found that:Int’l orgs articulat and diffuse CCTs, BUT national, local and every day politics made CCTs different. Policy-making closed Chile exception BUT, in Ecuador, this is a feature that traverses most policy-making.

More specifically regarding this research’s focus:FIRST, both in Chile and Ecuador there have been important elements of continuity, change and attempts of “rupture” throughout a period of more than a decade of continued implementation of these CCT programmes in contexts of governments orientation changesHow elements of continuity, change and attempts of rupture were incorporated to the programmes and were articulated discursively differed significantly in these countries,

but this was not necessarily related to “objective”, socio-structural or technocratic decisions but rather appeared more related to political circumstances (macro, micro and state capacitities) in both country cases.

SECOND, in both cases there was an important element of path dependency at the moment of design (esp. Chile) and at different attempts of rupture during the life of CCTs in both countries. But because the politico-discursive conditions of emergence (including more crystallized ones such as institutional factors) of these programmes were significantly different in Ecuador and Chile, the possibilities of “rupture” and change for these programmes were different in each country. However, and THIRD,

While within and across countries different actors held different views at moments of change, what appeared in all the actors and in both countries in different ways was a lack of indentification of CCTs with post-neoliberalism. Also, in both countries the changes attempted remained mostly at the level of implementation, in rather informal formulations, or at the level of coordination or creation of additional programmes, but rarely formal changes.

FOURTH, regarding the role of institutions, actors and ideas, the analyses is still premature to reach general conclusions about their configurations and weigh in processes of politic-discursive articulation beyond specific moments during the lives of these CCTs, as the section on findings will show.

Fieldwork Findings: general comments and preliminary analyseso Coincidences in both country cases, BUTs…

o A. Path dependencyo B. The end is nearo C. No post-neoliberalism

o By country:o Chronological summary of moments of formation

and transformations of CCTs and related debates and actors involved in them

o Analyses by key issues under debate

Coincidences, BUT…A. Key element of path dependency in each countryo Ecuador: Bono Solidario and neoliberal adjustment/compensation

o Association of the BDH with its antecessor the Bono Solidario. o Bono Solidario: launched in 1998 as a compensatory cash transfer to the poorest sectors

after elimination of a subsidy to oil, context of neoliberal adjustment, President Mahuad. o BDH emerges in 2003: reform of Bono Solidario was reformulated as a conditional cash

transfer. Government of Gutiérrez, shifting orientation to seek support of dominant sectors. o The government of Correa, (2006-2013; 2013-) attempted reforms of the BDH but

continued to perceive it as a neoliberal programme, and this perception cut across many debates around reforms of the BDH.

o Chile: Puente and Chile Solidario: 1990s neoliberal approach to poverty and Concertacióno Chile Solidario inherited elements of the 1990s approach to poverty reduction (social funds:

social participation and decentralization). This appeared first in the pilot projects of Puente, which later led to Chile Solidario, and started operating on the structure of FOSIS, the Chilean Social Fund.

o The centre-right government of Piñera regards Chile Solidario as a programme strongly associated to the centre-left governments of the Concertación (Lago, 2000-2006; Bachelet, 2006-2010). This perception has underpinned their efforts to reform this CCT (interview to policy designer of IEF, Santiago)

o Yet, Chile Solidario’s origins in association with the 1990s predominantly neoliberal approach to poverty (where minimal state prevailed) present and re-emphaised in new Chilean CCT pgm, Ingreso Etico Familiar.

Coincidences, BUT… (cont’d)

B. The end is near… yet, each country conceives differently the end of their CCTs

Ecuador: complementary system of social insurance,

based on the elimination of conditions re-affirmation of the state’s role in the social sphere.

Chile: Ingreso Etico Familiar: opposite direction

re-affirming the importance of complying with conditions focused on the immediate incorporation of the poor to the market and its rationality,

employment or entrepreneurshipfostering competition, success and merit.

Coincidences, BUT… (cont’d)C. Full coincidence: lack of perception of CCTs as post-neoliberal poverty

reduction programmesNo perception of CCTs as an operationalisation of a trend to achieve growth with equity nor as the social correlate of post-Washington consensus emphasis on the the role of the state in development.Redistribution aspects of CCTs? (could denoted a shift towards growth with equity and may underpin studies of the effects of CCTs on income inequality (eg Lustig and … eds 2010))

did not appear as an immediate perception of the actors involved in the design and implementation of these programmes.At most, “desarrollismo neoliberal” (interview Ecuador) was acknowledged, But most cases, especially in Chile, referred to the small amount of the transfer to explain that there are no redistributive effects.

Rather than redistribution, addressing inequalities and state strengthening, the risks approach to poverty that traversed the World Bank WDR on poverty of 2000-2001 seemed to emerge more as a conceptual framework behind the programmes, although this was not the only one. Therefore, the programmes are mostly associated to neoliberal interventions for poverty reduction in both countries cases but, at the same time, current governments in both countries regard CCTs as “asistencialistas”

That is, palliative interventions, a feature of social policy that neoliberal interventions had sought to combat as ineffective to reduce poverty and associated to the previous state-centred model of development in the neoliberal interpretations. Yet, the question of “asistencialismo” and CCTs is interpreted differently in each country…

Summary of key policy changes in chronological order: Ecuador

Summary of key policy changes… : Chile

Key debates on policy changes approached differently by each country

Targeting and the “exit” approach“graduation” of the program or how to decide about people that could “get out of poverty”, according to some of the interviewees’ definitions.

Relationship between the income (transfer) and the human capital (conditions) components

how and why one was preferred over the other, in different moments, by different actors. case of random monitoring mechanisms for compliance and current positions

Rights/citizenship or opportunities vs ‘assistencialismo’ how these questions related to the broader political projects of the governments. case of articulating with more programmes or creating new ones for rights approach, but different views of ‘asistencialismo’: neoliberal compensation, Ecuador; neoliberal critique to traditional social policy, centre-right in Chile

Profiles and skills of different groups or actors involved in these processes less to do with possible contents and framing of the policy debates but with different actors’ considerations about others’ capacity and legitimacy to influence and/or implement policy issue related to both questions of closed/technocratic vs participatory policy making and matters of education and background of policy makers themselves.

Example of processes underpinning policy changesTargeting and “graduation”Ecuador:

When in 2003, as part of a general loan of the WB the Bono Solidario becomes the BDH, targeting and conditions, emerged, but the size of the programme, its coverage, was not modified. This became a problem for the governments that followed.

“who is going to take the political risk of cancelling the BDH, a programme the covers 40% of the population?”.Attempts to “filter” and reassign the transfers since 2006 and currently.

Despite the closed character of the design in Ecuador, some of the reasons to redefine the targetting mechanisms came and still seem to come from social sectors (media criticisms, complaints: “why is she getting the transfer and I am not if she is not poored that me?”) Also redefinitions were related to the need to show results, and that is related to the “graduation” question. According to the intrerviewees, the BDH has not done much to take people out of poverty, the same people that started with it, are still eligible. The ‘graduation’ criteria and processes to implement it is involving debates between the newly cteated Ministry for Social Insurance, the agency in charge of undertaking the surveys, the Budget Directorate, and some non-governmental experts

Discrepancies evident, for instance, in the fact that the survey was announced in the newspapers without acknowledgment to the BDH implementing Ministry.

In recent debates, around the campaign and re-election of Correa (February 2013), political decisions and questions about budget assignment priorities seemed to count too. In addition to the well-know decision to increase the transfer during the campaign, interviewees stressed Correa’s priority to invest in social services/supply , rather than in subsidies, showing a desire to reduce the BDH (coverage, budget and political centrality).

Chile: not such a central debateLow coverage and original programme design, as well as use of well established mechanism to register characteristics of the poor and a “legalist” or ru;le of law tradition may explain low level of problematisation along this policy debate. However, reformulations in the tool to identify the poor (CAS to social protection card) could be reflecting new approaches… or new needs/problems perceived? Or rather the will of certain politiciand or polic makers to put their own imprint in the policy, like social protection Bachelet or another ministry attempt to introduce geographical targeting? This needs further resarch.

ConclusionPoints of continuity, innovation and attempts to “break” with the past in the more than ten years of existence of CCTs in Chile and Ecuador have been identified with the interviews. But the conditions of emergence of both programmes have shaped the possibilities of these processes. In terms of institutions, actors and discursive articulations, no single conclusion can be reached at this point of the research. Rather, the findings point out the specificity of each particular moment in terms of whether instititions, actors or ideas were the most defining factor in shaping a policy outcome. Yet, since the emphasis has been on trying to trace the different politico-discursive elements,, what emerges is that despite variations in the two country cases analysed here, once the policy was designed the constraints, needs and opportunites that led to continuities and changes were

mostly reflected in discursive articulations at the level of practices, either at the implementation level in an informal manner or at the level of creation of additional and complementary programmes or components rather than leading to concrete reformulations of the CCTs themselves. This, as a tentative general conclusion, reflects that,

while at the national and local levels there have been numerous adaptations and practical attempts to reform or even abolish CCTs, these are still not powerful enough as to generate a hegemonic view about how to deal with poverty that can overcome the CCTs view, which remains highly articulated and disseminated by international organizations such as the World Bank and the IDB in Latin America. Yet, resistance to that homogenization, perhaps similar to what Hay has referred to national variations despite globalization (Hay, 2000), persists in more or less veiled or articulated manners at the country and implementation level

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