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The political economy underlying principle
for cash transfer programs:

As the basic economic problem of scarcity, government
have limited resources that requires government to make decision about how to
allocate these resources efficiently and whether the cash transfer programs
increase the use of services or not, they compete for funds with other projects
such as providing direct services like buying school equipment or improving
teacher training so as to raise the quality of the education or upgrading hospitals
and healthcare. Justification of giving money to poor – whether conditional or
unconditional – people instead of providing direct services has to do with the
political economy of redistribution.

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As stated in literature review cash
transfer programs usually have a significant effect on economic point of view
such as the evidence stated that cash transfer programs are effective and
succeeds in decreasing the child labor on average through improving school
enrollment and it also succeed in increasing the consumption and investment. (Kabeer and
Waddington ,2015), and most studies proved that cash transfer programs have a significant
effect in reducing poverty, increasing school’s enrollment and enhancing the
economic growth and social development.

In addition of the economic reasons behind
using cash transfer programs, there are deeper political drives behind them
that serve agendas other than the poverty alleviation and economic and social
development. In latin America, some cash transfer programs are purely political
for example: peru’s relatively modest cash transfer program was inspired by
anti-poverty concerns alongside counterinsurgency goals (UNDP,2006).  Anti-poverty programs such as cash transfer programs
may play a role in affecting individual political participation. For
instance, by partly changing the economic position of poor households, transfer
receipts could persuade participant households to exercise their right to vote
(Gleason,2001). Politicians could allocate benefits to certain groups of people
to increase the political support as Candidate who invests in cash transfer
programs improve their electoral performance through strengthen the political position
and the image of those leader.  In conclusion,
these transfers can foster support for incumbents, thus making the case for
designing political and legislative mechanisms that avoid successful
anti-poverty schemes from being captured by political patronage.