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The 4Ps program, which started in 2007, aims for social assistance and social development. It is an anti-poverty program which provides conditional cash grants to the poorest of the poor. Keynesian economists believe that to improve the condition of the economy, the government should stimulate the demand for goods which will result to increasing economic output. This can be done by increasing the government spending. Conditional cash transfers, such as 4Ps, increase not only public consumption but also the quality of health and education which can lead to higher labor productivity.
The notion of conditionality means that the beneficiaries have to comply with the conditions set by the program. Children need to have regular class attendance, pregnant women should regularly visit health centers and parents should attend family development sessions. Failure to comply with these disqualifies them of the grant. This is meant to perpetuate the notion of neoliberalism to individuals by promoting micro-entrepreneurship and investing in human capital, such as health and education, to reduce poverty and promote long-term economic growth. During 2009, two years after its implementation, the poverty incidence in the country was rising to 26. 9%. This gradually went down to 25. 2% in 2012 and 21. 6% in 2015. This data shows how this program contributed to poverty reduction in the country. However, CCTs are not the only way of increasing public spending. Investing in public infrastructure can be an alternative. But not all families have access to public infrastructures and services, especially those who are living in distant provinces. Hence, 4Ps, which is targeted to the poor, is more effective than this form of public spending.
Moreover, investing in the human capital of children increases their chance of finishing secondary school and getting to college. An increment increase to educational attainment eventually results to better wages. The program also provides livelihood training programs for the families to work their way out of poverty with the use of their own skills and community efforts. 4Ps also has a major impact on the local economy because of the multiplier effect.
However, one objective of 4Ps which is social development can hardly be attained because of supply-side constraints. Poor healthcare and educational facilities in many communities limit the aim of the program. Inadequate number of social workers, teachers, and healthcare professionals makes 4Ps objective challenging to attain. Consequently, it was in these communities where the program is mostly implemented. This is the opportunity cost of focusing the public spending in CCT instead of public infrastructures and services. Additionally, 4Ps bring the poor to the goods market as consumers and as potential borrowers in financial sector as they use their bank accounts to get their money transfers. This promotes the neoliberal ideology which is privatization of basic goods and services that should have been provided by the government and financial capitalism of social reproduction.
While there is no doubt that 4Ps can help alleviate poverty and inequality, it is does not meet the minimum income security that should be provided by the government. Its initial impact in the economy is due to extremely low level of income of the target group. But as their incomes rise through the growth in the economy, the contribution of 4Ps will be self-limiting.
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