Demand for well-designed safety net and cash transfer programs to assist poor families is growing across the world, as 2009 develops into a year of tough economic challenges - especially for households already hit by the recent food and fuel crises, and for governments concerned that the financial crisis could turn into a humanitarian one, according to a new World Bank report.

The report, Conditional Cash Transfers: Reducing Present and Future Poverty, evaluates CCT programs that offer qualifying families cash in exchange for commitments such as taking babies to health clinics regularly or keeping children in school. It finds that these programs - where the responsibility for breaking out of poverty is shared by the state and poor households - can reduce poverty both in the short and long term, particularly when supported by better public services.

In response to the food and financial crisis, the World Bank expects to lend about $2.4 billion this year to start or expand CCT operations in Bangladesh, Colombia, Kenya, Macedonia, Pakistan, and the Philippines. Total World Bank lending support for CCT operations now covers 13 countries, with technical support to both national governments and donors.

After early successes in South Asia and Latin America, CCT programs are now found on every continent. They operate in more than two dozen developing countries, as well as in several developed countries, including the United States. In countries such as Mexico and Brazil, CCT programs were introduced as part of larger efforts to make safety nets more effective, replace badly targeted subsidies, or integrate smaller programs. Colombia's nationwide Familias program has generated important and positive evaluation results and has received sustained support from the World Bank.

CCTs have also grown tremendously within countries. Mexico's Progresa began in 1997 with 300,000 households; its successor Oportunidades now reaches 5 million households. Positive evaluations by researchers encouraged this scaling up. In economic terms, the program's transfers account for about one-fifth of the consumption of the median recipient household.

"With their focus on mothers and young people and their ability to deliver critical health and education services, conditional cash transfers are a vital safety net for countries seeking to help those hardest hit by the financial crisis," said Justin Lin, World Bank Chief Economist and Senior Vice-President, Development Economics.

The report's analysis of more than 20 impact evaluation studies of these programs shows that CCTs have led to many positive results: higher household consumption; increased use of preventive health services; a reduction in child labor; and higher school enrolment.

"CCT programs have also helped modernize social sector management since they require coordination across many agencies," said Ariel Fiszbein, report co-author and Chief Economist for Human Development at the World Bank. "Many have built in careful monitoring and evaluation that is invaluable in assessing results objectively and helping design better programs going forward."