Safety net programs can protect people from destitution in the short term; they can also offer long-term routes out of poverty, particularly when combined with investments in health, education, and nutrition.

To determine the impact of Nicaragua's safety net program, Red de Protección Social (RPS), IFPRI researchers evaluated its first two years. Begun in 2000 and designed to help children living in extreme poverty in rural Nicaragua, the RPS provides a cash transfer to families, conditional on their children attending school and visiting health clinics.

The evaluation involved quantitative research in which 1,500 households were surveyed three times between 2000 and 2002. In addition, fieldworkers completed a qualitative study using ethnographic techniques during a three-month stay in selected villages.

The study found that RPS improved the nutrition and education of approximately 10,000 of the country's poorest families.

• substantial increases in family purchasing power—up to 40 percent for the extremely poor--with most of the spending going toward more and better food
• a one-third reduction in the extreme poverty rate
• a reduction of five percentage points in the incidence of children under five who are stunted. Few programs in the world have seen this level of improvement in only two years
• a nearly 20 percentage point rise in enrolment rates for primary school children
• the child labor rate cut in half in program areas.

The poorest benefited the most under the program--showing that targeting was effective.

Nearly half of those asked said that family relations--particularly between husbands and wives--had also improved thanks to theresources provided by the program. In addition, they mentioned increased recognition for women's work.

On the negative side, the targeting mechanisms were not well understood at the local level, and people developed local myths to explain inclusion and exclusion. The evaluators' recommendations include strengthening program communications to improve transparency of the selection process.

IFPRI's evaluation played an important role in the decision by the Government of Nicaragua and the Inter-American Development Bank to continue the program and expand it nationwide.