CCT and Rural Long-Term Poverty Reduction: International Experiences and China’s Practice

Zheng Xiaodong (郑晓冬) *, Shangguan Shuangyue (上官霜月), Chen Dian (陈典) and Fang

Xiangming (方向明)

School of Economics, Zhejiang Gongshang University, Hangzhou, China

Abstract: China’s anti-poverty strategy in the post-2020 era will focus on reducingchronic poverty and alleviating relative poverty. As a common international approachfor long-term multidimensional poverty reduction, conditional cash transfer (CCT)payments reduce current poverty, prevent future poverty, and improve income distributionby providing poor households with cash allowances and promoting children’s humancapital accumulation. For such reasons, CCT serves as an anti-poverty policy instrumentworth referencing for China. This paper systematically reviewed the theoretical basis anddevelopment journey of CCT, the short-term and long-term implementation effects, aswell as the decision-making basis, design and potential limitations. In this paper, we havefurther analyzed the poverty-reducing effects and problems of China’s rural public transferpayment policies in the current stage and discussed the achievements and inadequaciesof China’s ongoing CCT pilot programs. Results indicate that the further development ofCCT in China calls for a combination top-down and bottom-up policy-making approachesin project design and implementation, as well as an evolving poverty governance systemcomplementary with other relevant policies.

Keywords: Conditional cash transfer (CCT), chronic poverty, multidimensional poverty,relative poverty, human capital

JEL Classification Codes: H51, H52, I38, O15

DOI: 10.19602/j.chinaeconomist.2022.01.08