The contribution of the private sector to poverty alleviation programs: exploring business engagement in conditional cash transfers

Gerardo Rivera Ungson (Lam Family College of Business, San Francisco State University, San Francisco, California, USA)
David Hudgens (Sonoco International Business Department, Darla Moore School of Business, University of South Carolina, Columbia, South Carolina, USA)
Maria Alejandra Gonzalez-Perez (Department of Management, School of Business, Universidad EAFIT, Medellin, Colombia)
Yim-Yu Wong (Lam Family College of Business, San Francisco State University, San Francisco, California, USA)
Sara A. Wong (ESPOL Polytechnic University, Escuela Superior Politécnica del Litoral, Guayaquil, Ecuador)
Fabiola Monje-Cueto (Universidad Privada Boliviana, Cochabamba, Bolivia)
Armando Borda (ESAN Graduate School of Business, Lima, Peru)
Sada Soorapanth (Lam Family College of Business, San Francisco State University, San Francisco, California, USA)

Management Research

ISSN: 1536-5433

Article publication date: 31 August 2022

Issue publication date: 6 April 2023

256

Abstract

Purpose

This study aims to propose the roles for business, broadly defined, in government-led programs designed to enhance human capital investment. Through conditional cash transfers (CCTs), businesses have opportunities to alleviate poverty, address the United Nations’ 2030 Agenda (SDGs), enhance CCT viability and explore new market opportunities.

Design/methodology/approach

This multifaceted research approach consists of five case studies of CCTs in Latin America, face-to-face field meetings with CCT administrators, 48 CCT beneficiaries in a pilot study and 31 interviews (verbal and remote) with business managers and companies in five countries.

Findings

Building on an on-site pilot study, an in-depth appraisal of five CCTs in Latin America over a five-year period, the authors examined six stages of CCT activities to assess possible areas of business engagement. The cases, augmented by field interviews with businesses, present fledgling business engagement in CCTs. In light of anticipated growth in CCTs, this study presents six major ways businesses can further participate in selected stages of CCT operations that contribute to their long-term sustainability, as well as future market opportunities.

Originality/value

Conducted over a five-year period with participants from government, businesses and CCT beneficiaries, this study deepens our understanding of how businesses can alleviate poverty through engaging in government-led antipoverty programs.

Resumo

Propósito

Este estudo propõe papéis amplamente definidos para empresas em programas liderados pelo governo projetados para melhorar o investimento em capital humano. Por meio de transferências condicionadas de renda (TCRs), as empresas têm oportunidades de aliviar a pobreza, abordar a Agenda 2030 (ODS) das Nações Unidas, melhorar a viabilidade do transferências condicionadas de renda e explorar novas oportunidades de mercado.

Achados

Com base em um estudo piloto no local, uma avaliação aprofundada de cinco transferências condicionadas de renda na América Latina durante um período de cinco anos, identificamos e analisamos seis etapas das atividades da transferências condicionadas de renda para avaliar possíveis áreas de participação empresarial. Nossos cases, enriquecidos por entrevistas de campo com empresas, apresentam oportunidades de participação empresarial em TCRs. À luz do crescimento antecipado dos TCRs, este estudo apresenta seis principais maneiras pelas quais as empresas podem se engajar ainda mais em etapas selecionadas de operações de TCR que contribuem para sua sustentabilidade de longo prazo, bem como oportunidades futuras de mercado.

Design/metodologia/abordagem

Utilizamos uma abordagem de pesquisa multifacetada composta por 5 estudos de caso de TCR na América Latina, reuniões presenciais de campo com administradores da TCR, 48 beneficiários da TCR em um estudo piloto e 31 entrevistas (presencial e remota) com gerentes de negócios e empresas em 5 países.

Originalidade

Este estudo foi realizado ao longo de um período de 5 anos com participantes de beneficiários do governo, empresas e transferências condicionadas de renda, e aprofunda a compreensão de como as empresas podem contribuir para o alívio da pobreza por meio da participação em programas de combate à pobreza liderados pelo governo.

Resumen

Propósito

Este estudio propone roles para las empresas, ampliamente definidos, en programas dirigidos por el gobierno diseñados para mejorar la inversión en capital humano. A través de las transferencias monetarias condicionadas (TMC), las empresas tienen oportunidades para aliviar la pobreza, abordar la Agenda 2030 (ODS) de las Naciones Unidas, mejorar la viabilidad del TMC y explorar nuevas oportunidades de mercado.

Hallazgos

Sobre la base de un estudio piloto in situ, una evaluación en profundidad de cinco TMC en América Latina durante un período de cinco años, identificamos y analizamos seis etapas de las actividades de TMC para evaluar posibles áreas de participación empresarial. Nuestros casos, enriquecidos por entrevistas de campo con empresas, presentan oportunidades para participación empresarial en los TMC. A la luz del crecimiento anticipado en los TMC, este estudio presenta seis formas principales en que las empresas pueden participar aún más en etapas seleccionadas de las operaciones de TMC que contribuyen a su sostenibilidad a largo plazo, así como a las oportunidades futuras del mercado.

Diseño/metodología/enfoque

Usamos un enfoque de investigación multifacético consiste en 5 estudios de casos de TMC en América Latina, reuniones de campo cara a cara con administradores de TMC, 48 beneficiarios de TMC en un estudio piloto y 31 entrevistas (presenciales y remotas) con gerentes de negocios y empresas en 5 países.

Originalidad

Este estudio fue llevado a cabo en un período de 5 años con participantes del gobierno, las empresas y los beneficiarios de TMC, y profundiza el entendimiento de cómo las empresas pueden contribuir a aliviar la pobreza a través de la participación en programas contra la pobreza liderados por el gobierno.

Keywords

Citation

Ungson, G.R., Hudgens, D., Gonzalez-Perez, M.A., Wong, Y.-Y., Wong, S.A., Monje-Cueto, F., Borda, A. and Soorapanth, S. (2023), "The contribution of the private sector to poverty alleviation programs: exploring business engagement in conditional cash transfers", Management Research, Vol. 21 No. 1, pp. 48-75. https://doi.org/10.1108/MRJIAM-08-2021-1222

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited


Introduction

This paper revisits an enduring question that has gained even more prominence with the introduction of the 2015 United Nations sustainable development goals (SDGs): How can businesses, broadly defined, effectively participate in poverty alleviation? On the surface, there is no shortage of research and case studies depicting business involvement in poverty-related issues. These include social entrepreneurship, sustainable development, microfinancing and the extreme poor (those who earn about US$1.90 per day, colloquially known as the “bottom-of-the-pyramid” (BOP). Nevertheless, trenchant calls for increased business engagement in SDG poverty goals have resonated in business schools, academic institutions such as the Academy of International Business (AIB) and special issues by mainstream business academic publications such as the Journal of International Business Policy, Journal of World Business and Transnational Corporations.

Poverty has been a scourge to humankind throughout history and is regarded as a “universal human problem” (Cosgrove and Curtis, 2018, p. 2). Highly impoverished sectors are closely associated with poor health, nutritional insufficiency, inadequate primary education, poor job skills, gender and income inequality and environmental degradation (Behrman et al., 2011; Fiszbein et al., 2009; Gonzalez-Perez et al., 2021). According to the World Bank Group (2021), 10% of the world’s population (roughly 736 million people) live on less than US$1.90 per day. Over time, poverty leads to an intergenerational cycle of affliction and dependence (Fiszbein et al., 2009). The imperative to end or alleviate global poverty highlights seminal research, commentaries and award-winning publications by renowned authorities (Banerjee and Duflo, 2012; Prahalad, 2006; Sachs, 2005; Sen, 1999).

Nevertheless, business participation in the earlier United Nations millennium development goals (MDGs) was minimal (Besada et al., 2017; Kolk et al., 2017; Kolk and van Tulder, 2010). An extensive review of academic publications delivered a sobering assessment: “a vast majority of academic studies on poverty (over 90%) do not consider the role of multinationals and international business in poverty alleviation” (Kolk et al., 2018, p. 96). Given the imperative for business engagement, the lack of attention is disquieting and impels serious considerations of why this is so. One reason is that businesses focus on “top-down” corporate-directed programs not connected with global institutions such as the United Nations that had long touted the need to address poverty (van Zanten and van Tulder, 2018). Moreover, because poverty programs at the institutional level are typically coupled with national governments (Hendriks, 2017), this might discourage businesses that regard their initiatives to be separate from government.

Another reason for the lack of business involvement, though a well-threaded one, is that businesses are primarily focused on profits and shareholder imperatives and act to meet societal goals only at their discretion (Braithwaite and Drahos, 2000; Waldman, 2004). In an insightful treatise on corporate motivations, Clyde and Karnani (2015) argue that business engagement in poverty alleviation, principally by subsidies, primarily depends on their assumptions and calculations of the cost attendant to social welfare or economic viability. In short, while businesses are widely acknowledged as formidable institutions in economic development (Lodge and Wilson, 2006), their engagement in poverty alleviation is contingent on the attainment of their goals. For example, in a promising development, small-to-medium enterprises (SMEs) have had success in improving organizational efficiency and raising wages in developing countries (Maksimov et al., 2017).

This paper outlines an approach for businesses to contribute to poverty alleviation. It addresses several United Nations SDGs and aligns their strategies through a specific program: conditional cash transfers (CCTs). These government programs provide cash transfers to selected impoverished households, provided that they meet and maintain requirements relating to health and education (Fiszbein et al., 2009). CCTs have been adopted in more than 50 countries since their inception in the late 1990s (Borges, 2019; Kugler and Rojas, 2018; Lamanna, 2014). Fiszbein et al. (2009) and Soliman (2017) have both written about businesses that started in CCTs.

With the surging cases of COVID-19, governments in developing countries have determined that cash transfer programs, such as CCTs, unconditional cash transfers (financial aid without conditions) and other social assistance programs (food and shelter provisions, health care), can function as expedient outlets for income redistribution (Aguinis et al., 2020; Glynn-Broderick, 2020: Gonzalez-Perez et al., 2021; Lopez-Morales et al., 2021; Vera-Cossio et al., 2020). Currently, 1,414 targeted social protection (programs directed at the poor to assist them in crisis and calamities) are reported in 215 countries or territories in response to the pandemic (Gentilini et al., 2020). As we will extensively discuss in this paper, CCTs can provide a significant market opportunity for businesses.

Accordingly, our research question is: can businesses, broadly defined, effectively engage in CCTs? To determine areas of business engagement, we conducted this study over a five-year period in sequenced interrelated phases. This paper is organized as follows:

  • an extensive literature review detailing the current state of affairs of CCTs, including post-pandemic developments;

  • our methodology that entailed literature review, an on-site pilot study, case-studies and field interviews with business managers in six countries;

  • our results that depict stages of CCT program activities based on our cases, supplemented with field interviews to assess business engagement;

  • a discussion of results leading to proposed roles for business engagement in CCTs;

  • implications for public policy, practice and theory; and

  • conclusions.

Literature review

The literature on CCTs is quite extensive. A cursory glance at Web of Science (WOS) or Google Scholar will reveal many academic papers and numerous references. Researchers have used many variables, methods, approaches and samples to assess the overall impact of CCT programs (Fiszbein et al., 2009). Extant studies, notably the 2009 World Bank Report (Fiszbein et al., 2009), along with similarly rigorous examinations by Rawlings and Rubio (2003), Cecchini (2009) and Parker and Vogl (2018), substantiates claims that CCTs indeed yield positive benefits in terms of reducing poverty, improving child health and nutrition, bolstering school enrollment and increasing consumption levels in targeted families and communities. These claims are consistent with Ravallion’s (2003, 2016) appraisal of CCT benefits in his extensive review of the poverty literature.

Previous CCT studies understandably focus on measurable quantitative outcomes against goals as they seek legitimacy for continued government funding (Kidd, 2015). By contrast, very few studies have examined the operations of CCT programs (Garcines, 2019). Adato and Hoddinott (2010: 6) argued that “too little attention is paid to […] important design and implementation issues.” To contextualize this, Ladhani and Sitter (2020) did a systematic assessment of the literature and identified impediments to CCT implementation. These include philosophical hurdles such as paternalism and dependence; procedural impediments such as exclusion and inclusion in erroneous targeting; economic impediments such as labor displacement; and infrastructural impediments such as the absence of intermediaries. Ladhani and Sitter (2020) further stimulated our research on the vulnerabilities arising from CCT operations. In Latin America, we studied five CCTs. These weaknesses provide business opportunities to engage in poverty alleviation initiatives such as CCTs. Specific profiles of these five CCTs are provided in Table 1. Detailed descriptions of each CCT based on our ensuing literature review is also available if so requested.

Methodology

Pilot study. To deepen our understanding of CCT operations with particular attention to implementation, we conducted a pilot study in the Philippines. Despite the vast literature, actual interviews with CCT beneficiaries are rare due to logistical difficulties and language barriers. Even so, we thought that a face-to-face meeting with CCT administrators and beneficiaries would provide deep and granular insights into CCT operations that might not be as accessible from secondary sources. For this reason, two members of the research team visited the Philippines over three different periods.to meet with a CCT program administrator (2016) that was facilitated by Herminio Coloma, former Press Secretary to former President Ninoy Aquino. They interviewed Corazon Soliman, the former Head of Social Services, who oversaw the CCT (Pantawid Pamilya Pilipino Program, or 4Ps). Using other influential contacts, these researchers gained access to actual CCT beneficiaries. Two face-to-face meetings with 48 CCT beneficiaries over two years were conducted in the native dialects. The verbal transcripts were later translated into English. Following these meetings, we extended our case studies to five CCTs in Latin America [1].

Case studies. Piekkari et al. (2007, p. 569) define case study as “a research strategy that examines, through the use of a variety of data sources, a phenomenon in its naturalistic context, with the purpose of ‘confronting’ theory with the empirical world.” Based on a convenience sample, we developed in-depth cases on Mexico’s Progresa/Oportunidades/Prospera, Ecuador’s Bono de Desarrollo, Colombia’s Familias en Acción, Bolivia’s Bono Juancito Pinto and Bono Juana Azurduy and Peru’s JUNTOS. Four members of the research team already reside in countries (Bolivia, Colombia, Ecuador and Peru) that afforded their access to CCTs, interviews (both open-ended and structured) and an analysis of publicly available government documents, official press releases, media coverage and reports by multilateral organizations. The use of this convenient sample was necessary, in that enormous financial resources would have been onerous for even a well-endowed single school. Researchers were tasked with examining CCTs in their respective countries. The one exception – Mexico’s Progresa – was developed by a researcher in the USA who had familiarity with this CCT.

The research team collected primary and country-based secondary data in the original languages and then translated it into English. In using multiple case studies, we did not apply strict replication (Yin, 2018: 58–60), but adopted a common framework of analysis centered on implementation stages, which we explain later in the paper. After developing these cases, we compared and contrasted our results to determine patterns and differences. During the course of our study, three programs were changed, renamed and formulated into law respectively in response to the COVID-19 pandemic. To examine the trend toward program funding amid the pandemic, a contingency unconditional cash transfer program in Colombia – Ingreso Solidario – was then included in the study. Although Ingreso is different as funding is unrestricted, we were interested in how governments had begun to use broader social programs to disburse financial aid to the poor. A summary description of the five studied CCTs is presented in Tables 3 and 4.

Field interviews with businesses. To assess the inclination of businesses to engage in CCTs, we contacted 31 senior managers and two CCT administrators residing in Bolivia, Colombia, Ecuador, Peru and the USA. After that, members of the research team in each geographical area conducted one-to-one structured interviews using questions relating to potential roles and participation, meeting organizational goals and identifying potential obstacles to participation. The interview questions were:

  • What role do you see for business (not necessarily yours) participating in CCTs? Potentially, you can participate at the beginning of the cycle (when funding is provided by government), midway in its implementation (when beneficiaries receive cash and are checked by appropriate officials) or at the tail end (when beneficiaries are lifted from poverty as a result of better education, employment opportunities, better training).

  • Do you see your participation in CCTs as potentially meeting your own social (in addition to profitability) objectives?

  • What do you see as potential obstacles to your (or business) participation?

Each interview was recorded, transcribed and translated into English. We then conducted a process of comparing and contrasting answers to gather an overall picture and identify both patterns and differences.

Results

Pilot studies: 2016, 2017 and extending to 2018 (Philippines). Corazon Soliman, the former Head of Social Services, discussed the progress of CCTs in three time phases. Though the CCT program faced uncertainty across different political administrations, it was funded since its inception. She addressed the challenges related to identifying impoverished families but remained optimistic about the program moving forward. Her participation afforded a unique opportunity for the two members of the research team to meet with CCT beneficiaries on two separate occasions. Local supervisors reported that the beneficiaries were targeted impoverished households that earned anywhere from US$1.00 to US$1.90 per day.

The meetings in 2017 and 2018 adhered to ethnographic requirements of having respondents relay their experiences in their own words as contextualized in their own experiences (Schensul and LeCompte, 2013, pp. 43–45). In the 2017 meeting, beneficiaries related their positive experiences with the program: some were extremely grateful for funding support for their children, another expressed how having a CCT card enabled her hospital visits to obtain health care that would not otherwise have been possible and others reported that they started their own small business that provided much-needed cash and subsistence. When queried about what they needed in the future, beneficiaries indicated that they wished that they had more business training. The majority attributed the successful implementation of the program to the efforts of a volunteer administrator who served as the link between the beneficiaries and government officials. In a follow-up meeting in 2018, a different set of CCT beneficiaries repeated most of what was reported in the first meeting, but some expressed concerns that funding might not be possible in the near future. Details of the pilot study are presented in Table 2.

Case studies. With an ensuing focus centered on program implementation based on our literature review and the pilot study, we identified six generic stages of CCT program activities. These stages are consistent with narratives provided by Fiszbein et al. (2009) and Rawlings and Rubio (2003). These generic stages are: government approval and funding, selection of targeted CCT sectors, field appraisal and interviews, contractual agreements, disbursement and field implementation and impact assessment. Each stage has diverse activities that involve multiple reviews and assessments, approvals by higher levels of administration, operational modes for selecting targeted sectors, variations in contractual arrangements and funding, differences in implementation and field support and impact assessment. A description of each stage follows.

Stage 1: government approval and funding. This is a critical stage as it determines the viability of a CCT program. According to some critics of CCTs, unconditional cash transfers give beneficiaries with more effective ways to spend their money. Furthermore, unconditional aid (food subsidies, cash transfers and the like) attracts good visibility and tends to be popular among constituencies. Supporters of CCTs argue that those beneficiaries tend to be more accountable when held to conditions, even if the program limits their choices. Because these views are polarized, strong administrative support and leadership are needed to get CCT programs passed and approved, but even the approval process by legislative branches can be contentious. Mexico’s Progresa Oportunidades program was initially challenged because it replaced unconditional aid, such as the tortilla program. The success of Colombia’s Familias in Acción is largely attributed to a “big push” from the World Bank. In Ecuador, an income transfer program for households in Ecuador was created in 1998 and was named Bono Solidario, and later, in 2003, the name changed to Bono de Desarrollo Humano (BDH). Bono Solidario was an unconditional transfer, BDH is considered to be a CCT. However, whether in practice the CCT has indeed been a conditional transfer remains a contestable issue (Özler, 2013).

Stage 2: selection of targeted CCT sectors. Due to the fact that conditional transfer programs (CCTs) provide regular cash transfers to low-income households in exchange for participation in welfare programs such as health care, nutritional supplementation and enrollment and attendance of children and adolescents in school, the CCT targeted sectors are critical. This stage is particularly challenging because truly impoverished sectors are difficult to identify, and even when identified, they can be hard to access. As a result, measurement issues are critical. While rigorous poverty assessments are frequently used, they can also conceal those who are truly poor, as quantitative data cannot fully convey the extent to which a household’s access to basic needs is restricted. As such, targeting has expanded to include geographical areas (households meeting demographic and other metrics specified by the CCT program), “means-testing” (typically a survey to assess poverty and related vulnerabilities) and categorical targeting (the provision of granting eligibility to selected population groups without using other methods, such as victims of displacements and poverty relief programs (Ibarrarán et al., 2017). Even so, another problem is leakage, or cash transfers provided to sectors that would not have otherwise qualified for conditional support (Chua, 2017; Ibarrarán et al., 2017).

While not held to a universally agreed common standard, the five CCTs adopted different ways of identifying and targeting impoverished households that incorporate localized conditions. Despite efforts to refine measurement, it is widely acknowledged that the wrong households can be targeted, and that targeting can be uneven in the same or across communities (Chua, 2017). Moreover, the extreme poor living in secluded or difficult to reach places can likewise be excluded simply because they are not able to access schools and/or health centers.

Stage 3: field appraisals and interviews. An important stage of operations is validating that targeted households, in fact, meet the criteria used in the above procedures. It is acknowledged that what might be documented in statistical tests at the macro-level using government data might not conform to actual conditions (Chua, 2017; Fiszbein et al., 2009; Ladhani and Sitter, 2020). Of particular interest would be the number of individuals (children, in particular) who reside in a given household. There is also the need to verify children not enrolled in school and reasons for non-enrollment. In all, observers would verify the actual physical condition of poverty.

Stage 4: contractual agreements with CCT beneficiaries. Once selected, targeted beneficiaries must contractually agree to abide by specific requirements. These can vary, depending on health, school enrollments and dietary conditions imposed by CCT administrators. Moreover, the timing and scope of cash disbursements are also a part of the contract. Based on interviews with CCT beneficiaries, their key challenge is understanding what these contracts stipulate. While the contracts have worked for many, even the majority, some do not understand the agreements and the ramifications of non-compliance because of educational and linguistic limitations.

Stage 5: disbursements and field implementation. For many CCT administrators, this stage can be the most difficult to track and the most challenging to implement. Depending on the resources available to the CCT program, the actual monitoring and control of household accountability can create a host of problems. Schools must monitor attendance and absences; health clinics have to document office visits, health check-ups and inoculations. School absences must be valid for children. CCT administrators must oversee the process of actual cash disbursement, often made through an automated teller machine (ATM) machine using ID cards. In this regard, forgeries and abuses can result. Although studies of CCTs in this context are still limited, additional field studies may be needed to ascertain the effectiveness of cash disbursements.

Stage 6: impact assessment. Academic research has focused on this stage. Understandably, the continued financial support of CCT programs depends in large part on the attainment of predetermined goals and objectives. There is no shortage of studies or of performance measures to determine the efficacy of CCTs in terms of short-term effects. What becomes crucial is “closing the loop,” or changes to identify performance-gaps with the end in view of improving the long-term performance of CCTs. As part of the programs’ continuity, funding will require continued political support. The evaluation of CCT impact by program administrators and government funding agencies is critical for justifying the expenditure of funds.

Every stage is conceivably open for engagement by businesses, but some are more likely than others. Specifically, there are vulnerabilities in all stages of operations, but particularly in Stage 1 (government approval and funding), as continued CCT operations depend on the goodwill of new political administrations, and Stage 6 (impact assessment), as CCT beneficiaries presumably with better education and better job skills need to financially sustain themselves over time. In this context, business participation is essential for training and employment. In terms of market opportunities, businesses can provide products and services to these households, as currently done in Stage 5, or Ecuador’s BDH. However, based on our interviews and fieldwork, business engagement is not likely in the other stages when there is centralized government control (funding, targeting, the selection of program administrators, field interviews). Table 3 provides details of the above discussion.

Business roles for CCTs. To further assess the inclination for business managers to engage in CCTs, as indicated earlier, we asked three questions:

Q1.

Do they see a role for business firms in CCTs?

Q2.

Would their companies participate in CCTs?

Q3.

What would they consider to be obstacles to the participation of business firms in CCTs?

While we selected as cross-sectional sample based on our contacts and recommendations from other colleagues, we noted that few interviewees qualify as “elite informants,” and thus were interviewed at these later stages of the project (Solarino and Aguinis, 2021). Following our analysis and deliberations of the interview transcripts, we developed six themes derived and synthesized from the interviews. Most participants provided us their permission to use their names, though there were a few who requested anonymity. These themes are presented below:

  • (1) Mobilizing the local economy

One of our respondents who had worked extensively with local business firms for close to 40 years suggested that one way for businesses to enhance the viability of CCTs is to “pump the local economy.” Corazon Soliman, former Head of the Philippines Department of Social Welfare, directed the country’s CCT programs (Pantawid Pamilyang Pilipino Program (4Ps)). She noted that several small-to-medium sized businesses had already been setting up shops close to targeted communities in anticipation of higher sales. She also disclosed that some banks and financial services from the Manila Metropolitan Area had already provided ATM services for cash disbursements to 4Ps beneficiaries. Similarly, among the best practices employed in Ecuador’s BDH, banks provide ATMs that are accessed through small convenience stores in the neighborhoods where BDH beneficiaries live (the so-called “Tienda del barrio”). Beneficiaries are also able to cash in their CCT payments using these ATM services.

Some of the beneficiaries we interviewed have become fledgling entrepreneurs. When asked what they needed, a number requested formal training from business firms. In this regard, one respondent opined that local business and social entrepreneurs can broaden their advocacy by focusing on educational strategies. Ted Pong, a computer analyst from the USA, stated that “business can offer jobs or job training.” Gerardo Cabochon, President of Pandayan Bookstores, opined: “A business can get in touch with a CCT’s circle of beneficiaries to provide them with educational or training support” and “provide venues for meetings with beneficiaries and serve as a distribution hub for materials given to a circle of beneficiaries.” These respondents believed that business partnerships with enterprising CCT beneficiaries at a larger scale alleviate poverty through sustained livelihoods for beneficiaries.

  • (2) Building inclusive market/financial strategies

Several interviewees gave specific suggestions to enhance the entrepreneurial activities of beneficiaries through market inclusion. A former corporate finance executive of a multinational global packaging firm said, “I doubt that a business could provide input at the beginning of the [CCT] project […]. But, once the funding is approved, a business can become involved to provide support […] for instance, the program may provide educational funding for students with new teachers and other staff.” Nancy Hayes, a champion of women entrepreneurs and an angel investor, added that “the business opportunity would be largely in providing services to the sponsoring government for use in delivering and managing the program.” In both cases, entrepreneurial activities by CCTs can facilitate their inclusion into the formal market economy.

  • (3) Aligning CCTs with corporate social responsibility (CSR) initiatives

Paloma Lopez, who headed a CSR department in a multinational consumer products firm, stated that “there is an opportunity for the business to see the CCT program as part of its social objectives, as well as the long-term market growth for potential customers or empowered employees.” Kim Wong, a chief financial executive in a multinational electric company based in Hong Kong, said, “It [CCT] is not only meeting a company’s social objective, but it is a part of the business itself.” Herminio Coloma, former press secretary to Philippines ex-president Ninoy Aquino, added: “Potential business participants in CCT tail-end activities would be able to satisfy their humanitarian or social responsibility objectives.”

Building further on CSR activities, a director of sustainability in a multinational soft drink company based in Colombia, said, “Many companies have education issues within their social responsibility programs and [that] can be a path.” Likewise, a senior executive of a US diversified consumer marketing firm stated, “I certainly think improving health, education, and breaking the cycle of poverty would match up with most corporations’ agendas.” Another executive from a global fashion firm added, “Companies today are increasingly putting focus and resources into CSR programs which have a social benefit to them in line with their business in some way.” Finally, an executive in Ecuador said that “all private companies must have a clear social responsibility to the country, to Ecuador.”

  • (4) Building infrastructure

A core challenge facing poverty alleviation initiatives is that the perceived cost of servicing the poor outweighs any benefits. Nevertheless, business firms can capitalize on CCTs by providing distribution outlets to make transactions more efficient. Corazon Soliman indicated that some banks in the Philippines have already established ATM kiosks for beneficiaries to get their money. Gawad Kalinga, a successful Filipino venture patterned after Habitat for Humanity, has initiated a community-based effort to build houses for the homeless, initially with donations but currently with the assistance of businesses. Isabel Wong, a Hong Kong real estate manager, stated that “a business community can play an essential role […] by using its infrastructure, flexible organization and importantly entrepreneurship to help [CCT] projects.”

  • (5) Leveraging partnerships

Building on the theme of partnerships, another strategy for firms is to pursue partnerships with CCT programs with non-governmental organizations (NGOs) as collaborative intermediaries. Sean Ansett, executive director of a global sustainable organization called At Stakes, opined that “companies […] have largely chosen not to work directly with government […]. This is why most foundations and corporate giving programs have focused on partnerships with NGOs.” James Gollub, president of Gollub Enterprises, which specializes in creating regional business incubators for innovations around the world, noted that “both multinational and regional companies, as well as major institutions, will often agree to participate in a well-defined collaborative initiative.” Kim Wong added, “The business community can play essential roles in CCT, including banking and financial services, telecommunications, utilities, energy suppliers, amongst others. The business sector can make use of its massive infrastructure, flexible organization and entrepreneurship in CCT operations stages.”

  • (6) Adopting appropriate market signaling

Because CCTs are government-run programs, several interviewees did not envision business participation at the inception of CCTs, as this entails government funding and the delegation of operational responsibilities. Nevertheless, because the legitimacy of a CCT is crucial to ensure continuous funding, businesses can play a role by signaling their support of such poverty alleviation programs in the first stage (government funding and approval).

In this regard, some interviewees referenced some form of signaling to enhance the viability of CCTs. Paloma Lopez noted that a business “can commit upfront to its role in the long-term growth plan for the community as the CCT program takes off and also when it is over.” Jim Gollub, whose firm specialized in triple bottom lines for performance, suggested that as a part of a collaborative effort, “business can support or carry out a ‘launch event’ that signals the beginning of implementation […] of each […] collaborative action.” A national manager of human resources at a SME bank in Bolivia suggested that signaling might extend to similar projects: “the key is to visualize schemes, where companies can play an interesting role […] some companies offer school supplies, which is important […] the focus of the Juancito Pinto program is to help children stay in school. The other CCT has its purpose, but that is the idea.”

Discussion: proposed roles for business engagement

Taken altogether, CCTs afford opportunities for businesses to meet some SDGs and address three traditional concerns: the lack of control (our stages indicate where businesses have control and discretion), the absence of accountability (businesses can monitor their performance measures in selected CCT activities) and an uncertain reward for investment (the growth of CCTs presages the benefits from increased market opportunities). One question deliberated by the research team was: Are the proposed business roles for CCTs feasible and implementable? In a post hoc analysis, we reviewed business engagement in related poverty alleviation research to determine precedents in support for the above themes that are presented in this section.

Ungson, Gerardo R.; Hudgens, David; Gonzalez-Perez, Maria Alejandra; Wong, Yim-Yu; Wong, Sara A.; Monje-Cueto, Fabiola; Borda, Armando; Soorapanth, Sada [publication year] Opportunities for public–private complementarity in poverty reduction: potential roles for the private sector in CCTs. Supplementary material on the paper The contribution of the private sector to poverty alleviation programs: exploring business engagement in CCTs. Management research: Journal of the Iberoamerican Academy of Management.

Pumping the local economy. “Mobilizing the local economy” might appear bold and audacious. Nevertheless, there are numerous case examples of grassroots applications in poverty-stricken areas worldwide that demonstrate the feasibility of doing so. VisionSpring, founded in India in 2001, trained local female entrepreneurs in the broader community to improve eyesight services for the poor (London, 2016). The Honey Care Africa project in Kenya involved the management of community-kept beehives and honey (Lodge and Wilson, 2006). Both were developed at the local grassroots level and were oriented toward mobilizing local communities.

The empowerment of local economies has been championed by Michael Shuman (2000), an activist and writer on local sustainable development. He argued that local sales and consumption can engender a “multiplier” effect that redounds primarily to community improvement (p. 50). More recently, Shuman (2015) has provided numerous cases and examples of what he calls “pollinators,” which are mostly locally owned businesses that seed and develop products and services for local communities. When communities prosper, they become viable markets for other local and multinational firms to enter these sectors. Strategic orientations of the firm then become embedded in firm strategy at a local level.

Creating inclusive markets. Creating market segments fosters the inclusion of previously excluded households (i.e. the poor) into the market economy, either as consumers (Prahalad, 2006) or producers (Karnani, 2007). Among Prahalad’s examples is Casas Bahia, which created an innovative financial model for the poor to obtain financial services. Lodge and Wilson (2006) discussed Merck in Africa, Hewlett-Packard in India and Nokia in Finland. In terms of offering products for consumption, our interviews suggest that business participation is most likely to occur when beneficiaries receive cash through CCTs. For perspective, employment has led to market-inclusive strategies (Morton, 2019), as well to financial inclusion through channels of investment and savings for impoverished parties (Zimmerman and Moury, 2009).

Aligning CSR. Another theme is that business enterprises can repurpose their CSR efforts through mini-scaled partnerships (Polak and Warwick, 2013; Seelos and Mair, 2017). Because these companies already have a full-fledged commitment through CSR programs, extending their outreach to CCTs presents a compelling, if not a convenient, strategy. For example, in partnership with Amanco, a leading water systems company in Mexico, Ashoka co-created a “hybrid value chain” to link irrigation systems with established social entrepreneurs (Rangan et al., 2007). In Africa, the Black Economic Empowerment Commission (BEECom) comprised 11 black-owned business organizations to improve skills, employability and leadership (Rangan et al., 2007).

These roles align well with the CSR literature on the enhancement of human capital. Lund-Thomsen and Lindgreen (2014, p. 20) stated that “Local factory managers should receive training in human resources management, product quality, and production processes. Instead of seeing workers as a costly input factor, local factory managers need to be trained to understand them as an important company resource […] some recommendations include offering workers training in their basic rights and responsibilities in the workplace” (p. 15). Kang et al. (2020) underscore the importance of government-led programs for market inclusion in CSR and in e-commerce (Li et al., 2019).

Market signaling. Finally, an important role for businesses is signaling their intent to participate. To the extent that businesses signal potential engagement in CCTs, they can solidify a continuation of government funding and help to mollify critics. Given these conditions, signaling of support by the private sector can be crucial and can even determine government funding. Signaling is not new to business operations; it is a corporate method called “market signaling.” Market signaling is a concept based on the theory, mainly attributed to economist Michael Spence (1973), that one party can signal or send credibly verifiable information to another. Examples of signaling include employers sending wage cues to prospective employees, information about second-hand cars’ repair and maintenance records and even anticipated public offerings (Spence, 1973). Signaling is particularly crucial in the initial stage of CCTs because government approval and funding are determined in politicized environments, with both supporters and critics.

Our post hoc analysis provides a precedent for the proposed roles for business engagement in CCTs discussed in the previous section. These roles within the CCT stages of operations are detailed in Table 4. Although specific stages relating to targeting, field appraisals and disbursements fall within governmental direction, business engagement will largely depend on activities for which they have some control. As noted earlier, the sustainability of CCTs over time depends on continued political advocacy and financial support. Businesses can effectively signal their support for CCTs at the early stages when government approval is critical; this raises awareness, reinforces advocacy and strengthens CCTs’ legitimacy. Moreover, by creating job opportunities, even limited partnerships when beneficiaries have presumably employable job skills, such engagement not only sustains CCTs but can also reduce intergenerational poverty. In this regard, each stage not only represents sequential CCT operations, but viable, if not propitious, platforms for meaningful business engagement. To the extent that these are realized, such stages truly represent “idealized” representations of CCT stages and future operations [2].

Because different types of businesses (small entrepreneurial ventures and multinational firms) address poverty alleviation in different ways (Clyde and Karnani, 2015), specific roles for businesses are presented in Table 5.

Implications for policy, practice and theory

Policy. Historically, solutions to ending poverty have traversed three streams of scholarship: modernization, dependency and Marxist theories (Isbister, 2006). Modernization theorists argue that impoverished nations can prosper by emulating the best traditions and practices of developed nations (Rostow, 1971) with aid provided by developed countries (Sachs, 2005). Dependency theorists find fault in the historical exploitation of developing nations by developed nations (Prebisch, 1950). Marxists see the flawed wage system as systemically creating poverty (Marx, 1867). Alternatively, community-based initiatives based on community valuation (Roxas, 2000; Roxas and Ungson, 2011), community enterprises (Paredo and Chrisman, 2006) and local self-reliance (Shuman, 2000) have been advanced but have yet to gain sufficient traction in mainstream theories and policies. The introduction of the 2030 Agenda for SDGs involving all countries and stakeholders offers yet another opportunity for eradicating poverty through meaningful collaborative partnerships.

In terms of public policy, CCTs can enhance the social objectives of businesses in several ways. Because SDGs are closely aligned with the primary goals of CCT programs, businesses can address poverty by participating in them. CCTs aim to reduce poverty (SDG 1) through better health (SDG 3), accessible education (SDG 4), more women’s participation (SDG 5) and less hunger presumably with more significant income (SDG 2). Regarding the connection to SDGs, businesses will engage as long as they perceive that SDG goals and interventions (such as CCTs) are integral parts of their goal-oriented and actionable strategies (Clyde and Karnani, 2015; Polonenko and Besada, 2017; van Zanten and van Tulder, 2018; Witte and Dilyard, 2017). Hence, business engagement in CCTs can facilitate the achievement of some SDGs.

Management practice. In terms of practice, CCTs represent accessible and attractive market segments for business. Overall, the market for CCTs is potentially large, with households making less than US$1.90 per day currently estimated as 10% of the world’s population, or roughly 736 million people (World Bank, 2018). Successful CCTs result in beneficiaries who are less impoverished, better educated, in better health and more job skills and, therefore, more employable. A relevant comparison for examining this issue is the “bottom of the pyramid”, or the highly impoverished households earning about US$1.90 per day (London and Hart, 2011), which has been extensively critically examined by academicians. Much like the BOP sector, CCT beneficiaries offer a propitious market opportunity for business in terms of new sales and corporate social entrepreneurship ventures (London and Hart, 2011; London, 2016). Moreover, beneficiaries are situated in areas that are readily identifiable and relatively accessible. Therefore, accessibility can redress previous challenges arising from geographical fragmentation (Goyal et al., 2016).

Theoretical extensions. This paper offers some implications for further theory development. The potential involvement of businesses in CCTs bridges two diverse theories in the context of global poverty: market inclusion and capability building. Market inclusion, or more generally market-based solutions, is the process of incorporating previously excluded sectors (impoverished individuals and households) into the formal market system (Lodge and Wilson, 2006). An empirical study of government-sponsored microfinancing in China indicated a significant increase in the incomes of both farmers and non-farmers, which can even be enhanced with supportive political institutions (Ding et al., 2018). Market inclusion, specifically the entry and participation of CCT households in the formal market system, is enabled by business participation, particularly at the later stages (disbursement and impact assessment) of CCT operations.

Capability building, advanced by Nobel Laureate Amartya Sen, enhances the ability of the poor to improve their welfare through accessible health, education, freedom and meaningful choices (Sen, 1999). CCTs enhance the capabilities of their beneficiaries: they are better educated, healthier and presumably have stronger employment and rudimentary entrepreneurial skills. By selling their products in entrepreneurial ventures and employment, previously excluded sectors benefit from the market system.

Market inclusion and capacity building are critical in determining the future viability of CCTs. Until CCT beneficiaries are formally included in the market system, they remain vulnerable and can remain poor. Anecdotal accounts from our interviews suggest that the only path forward is for beneficiaries to move into urban areas to find suitable employment. This might benefit the beneficiaries but not the local communities. On the other hand, businesses will not hire CCT beneficiaries unless they have the requisite job skills achieved through capacity building. In this context, business engagement in CCTs integrates market inclusion and capacity building. Moreover, business engagement affords a path for a triadic government–business–community alignment (Barnes and Oloruntoba, 2005; Rajan, 2019). This arrangement provides a revised conception of partnering, surpassing mere transactions and incorporating institution-based logics (van Tulder and Keen, 2018).

Conclusions

Our research question centers on whether businesses, broadly defined, can work with government programs, specifically CCTs. This study proceeded in several phases over a five-year period. First, we addressed the obstacles to business engagement from extant publications. Second, we explored the viability of business engagement in CCTs with an on-site pilot study that included face-to-face meetings with CCT beneficiaries. Third, we developed five in-depth case studies of CCTs in Latin America using primary and secondary data sources. In this phase, we placed particular attention to vulnerabilities in stages of CCT operations in order to identify possible business roles. Fourth, we interviewed business firms, representatives and selected CCT officials to assess their inclination to engage in CCTs.

Taken altogether, businesses are favorably inclined if they can exercise some control and discretion and meet their goals. Our results indicate specific areas for business engagement, including those activities already occurred in CCTs. To the extent that these roles are implemented, businesses can meet SDG primary goals (eradicating poverty, good health and well-being, education, gender equality), strengthen CCTs through training and employment and explore a new market opportunity arising from educated and healthier CCT households. Even so, the study is limited in that our recommendations are propositional, and with a focus on CCTs, we did not cover other extensive research on poverty alleviation.

Acknowledgement

An early version of this paper was presented at the PACIBER (Pacific Asian Consortium for International Business Education and Research) Annual Meeting on July 7-11, 2019, in Malaysia. The authors acknowledge the assistance of Gerardo Cabochan who arranged two meetings with CCT beneficiaries, and to the editor and two anonymous reviewers for their constructive feedback. The authors appreciate the time and expertise of the Latin American specialists were interviewed for this study.

Selected profiles of CCT programs covered in this paper

CCT program Colombia, Familias En Acción (1998) Ecuador, BDH (2003) Peru, Juntos
(2005)
Bolivia,
A. Bono Juancito Pinto (2006)
B. Bono Juana Azurduy (2009)
Mexico Oportunidades (1997; Progresa (2004); Prospera (2014)
Size and scope 2.7 million households (2015)a 1.2 million beneficiaries (2012)b 800,000 households (2015)c A. 2.2 million students – Juancito Pinto (2019)d
B. 127,000 beneficiaries (2013)e
5.8 million households (as of 2013)f
Targeting system Geographic and poverty assessment; also categorical targeting In the beginning, it was not with a proxy-mean test (poverty assessment). However, then the poverty assessment was implemented to become more precise Geographic and community assessment A. Covers all children in public schools, agreement schools (semi-public) and alternative education schools up to the twelfth grade
B. Covers pregnant women and nursing infants without health insurance coverage
Geographic and poverty assessment
Benefit structure US$15* per month conditional on attendance
US$10 per month to the household
US$10 per month depending on completion
US$15 per month per family
Senior and disable persons US$11.50 per month). As of December 2017, US$50 per month plus a variable component that depends on the number and age of children in the household
US$33 per month A. US$28 per year for education requires 80% attendance. B. provides four payments of US$7.18 per medical checkup during pregnancy, one payment of US$17.24 if the birth of a baby is in a public clinic or public hospital and 12 payments of US$17.96 per bimonthly medical checkup for babies until they are two years old. It also requires that the mother not be pregnant before the previous baby is two years old Education: primary school to high school (range from US$9.5 to US$60 per month); nutrition: US$14 per household per month. Maximum monthly benefits: US$80/household with no children in senior high school; US$146/household with one child in high school
Payment frequency Bimonthly Monthly Monthly A. Once per year
B. Four monthly payments during pregnancy, one after a child’s birth in a public hospital, and 12 bimonthly payments once the baby is born
Monthly
Duration As soon as eligible As soon as eligible Approximately 4 years A. Until students finish school (12th grade), as long as they are eligible
B. Since the mother gets pregnant, until the baby is two years old, as long as she is eligible
As long as they are eligible

Sources: Size and scope (Row 2) was constructed by the authors based on the following:

a

Medellin and Prada (2015);

b

Poirier (2020);

c

OECD (2016);

d

Dogherty (2014);

e

Poirier (2020);

f

Parker and Todd (2017); supporting information on targeting system, benefit structure, payment frequency and duration is synthesized from the Celhay et al. (2017), Dogherty (2014), McGuire (2013), Medellin and Prada (2015), OECD (2016), Parker and Todd (2017), Poirier (2020), TeleSUR (2020) and World Bank Report (2009);

*

Values in US$ are estimated based on exchange rates for local currencies as of December 2021

Pilot study findings

2016 interview (chief administrator, CCT) 2017 field meeting with CCT beneficiaries 2018 field meeting with CCT beneficiaries
Key themes Key themes Key themes
  • Provided core activities relating to three phases of CCT operations

  • Provided a case study of one CCT beneficiary who is attending school in the USA

  • Reported business participation in setting up ATMs in CCT neighborhoods

  • Direct benefits

  • Ease of access to hospitals for medical issues and procedures

  • Educational access and funding for children

  • Some developed small business operations (sewing)

  • Reported invaluable assistance of intermediary between beneficiaries and CCT officials

  • Also, households who were not present during pre-selection house visits might not have been eligible for the program

  • Expressed strong desire for basic business training

  • Reaffirmation of direct benefits (funding, education and health)

  • Extra funding has been a critical component of household income

  • Acknowledged the benefits arising from children’s education (did not report conflict with household labor)

  • Some expressed concern that funding might run out or that they would be excluded from the program in the future

Stages of CCT programs, facilitating and potentially obstructive factors

Stages of CCT programs Facilitating factors Challenges and vulnerabilities of specific CCTsa
1. Government approval and funding
  • Initial/current funds provided by a government agency that endorsed and supported CCTs. Sustained support through different administrations has been essential

  • Declining budget (BDH, Familias en Acción, Colombia Mayor, Jóvenes en Acción, Ingreso Solidario and Progresa)

  • Loss of political support (Ingreso Solidario, subsidy for reintegration to incumbents, and Progresa)

  • Changes in personnel (BDH, JUNTOS and Progresa)

  • Uneven economic performance (BDH and Ingreso Solidario)

  • Unanticipated fiscal crises, such as COVID-19 (all programs)

2. Selection of targeted CCT households
  • Appropriate usage of proxy tests

  • Adequate coverage of targeted impoverished sectors

  • Successful pilot tests

  • Equivocal proxy tests, or scope dependent on political patronage (BDH, Bono Juana Azurduy (BJA), Bono Juancito Pinto (BJP) and JUNTOS)

  • Leakage-inadequate coverage of poor (BDH, BJA, BJP, Familias en Acción and Progresa)

  • Proximity to rural population (BDH)

  • Capacity constraints (all programs)

3. Field appraisals and interviews
  • Adequate scope of coverage

  • Correct timing of field interviews

  • Leakage (BDH, Progresa, JUNTOS)

  • Some targeted households were not present during field visits and were excluded from CCT (Familias en Acción, JUNTOS and Philippines 4 P)

  • Capacity constraints (all programs)

4. Contractual agreements with CCT beneficiaries
  • Clarity of agreements

  • Formality of agreements

  • Clear procedures for disbursements

  • Agreements not formal (BJA, BJP, Colombia Mayor, Jóvenes en Acción, Familias en Acción and JUNTOS)

  • Arrangements not clearly understood (BDH)

  • Locational proximity (Familias en Acción and Colombia Mayor, Jóvenes en Acción)

5. Disbursements and field implementation
  • Adequacy of predetermined channels

  • Monitoring procedures

  • Scope of monitoring requirements

  • Adequacy of staff support

  • The assistance of external parties (such as the church, NGOs)

  • Feedback from beneficiaries

  • Lack of channels of disbursements (Colombia Mayor, Jóvenes en Acción and JUNTOS)

  • Limited resources for control and monitoring (BDH)

  • Insufficient ATM and other channels (JUNTOS)

  • Limited infrastructural support (BDH and BJA)

  • Capacity constraints (all programs)

6. Impact assessment
  • Satisfaction with the CCT program

  • Co-alignment with program goals

  • Responsiveness to current challenges to the program

  • The prognosis for future funding

  • Sustained support for the CCT program

  • Misalignment of objectives and results (BJA and Familias en Acción)

  • Serious leakage issues (Familias en Acción)

  • Inconsistent administrative support (Familias en Acción)

  • Decline in funding (BDH, Familias en Acción, Colombia Mayor, Jóvenes en Acción and Ingreso Solidario)

Note:
a

Ingreso Solidario is included as it is the most recent government initiative, but it is an unconditional cash transfer program

Source: Authors

CCT – stages, activities, challenges and the proposed roles for businesses

Description Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6
Sequential stages of CCTGovernment approval and fundingSelection of targeted CCT householdsField appraisals and interviewsContractual agreementsDisbursements and field implementationImpact assessment
Key activities
  • Congressional deliberations; approval; funding; % of social works budget; assignment of a government agency; and selection of oversight agency

  • Proxy and means tests; selection of targeted CCT households; identification of CCT beneficiaries; ad hoc simulations; pilot studies

  • Timing and scope of field visits; interviews; final screening of CCT sectors and beneficiaries

  • Legitimization, finalization and implementation of contractual agreements with CCT beneficiaries regarding health, school enrollments and other activities; and certification of a conditional agreement

  • Finalization of payments via electronic banking outlet (cash machine or ATM); administration of health and school requirements; frequency and scope of inspections; support groups and administration

  • Monitoring of CCT beneficiary – agreements; reduction/expansion of programs; feedback; impact assessment using multiple measures and timeframes; and remediating “gaps”; reports to government

Primary Challenges
  • Decreased funding

  • Changes in political administrations

  • Opposition

  • Inclusion of non-impoverished household (leakages); exclusion of the poor arising from targeting errors

  • Inaccuracy of poverty heat maps

  • Leakages

  • Exclusion of targeted households

  • Resource limitations

  • The inability of beneficiaries to understand contracts

  • Free riders

  • Lack of electronic banking outlets disbursement units

  • Resource limitations

  • Lack of goal attainment

  • Inadequate scaling

Potential role of business
  • Signaling by business that support CCT programs and future engagement for beneficiaries

  • Amid the uncertainty arising from COVID-19, signaling becomes relatively significant

  • Business participation is unlikely at this stage

  • Business participation is unlikely at this stage

  • Business participation is unlikely at this stage

  • Business participation is still limited at this stage, but a few offerings infrastructure assistance, such as strategically located electronic banking outlet (cash machine or ATMs)

  • Employment and formal market/financial inclusion

  • Provision of input on:

--consumption
--support in social entrepreneurship
  • Coordination with CSR and poverty alleviation programs (microfinancing, triple bottom line),

  • Social entrepreneurship

Source: Authors

Defining the roles of businesses (local business, business-related social ventures and multinational companies) in CCTs

Type of enterprise Potential role and function regarding CCTs Extended benefits supporting CCT sustainability
Local business Short term:
  • Leveraging the local economy

  • Financial services

  • Limited infrastructure (ATMs)

Leveraging CCTs inhabiting local communities can create “multiplier effects” that extend positive and extended benefits to non-CCT beneficiaries
Business-related social ventures Short/medium term:
  • Strengthen ties and connections with CCTs, particularly firms with CSR programs

  • Tight coupling partnering with government, NGOs and communities

  • Business training

To forge strong ties and connections to lend legitimacy to CCT beneficiaries and promote self-reliance instead of sheer dependency
Multinationals companies Short term:
  • Market signals acknowledging willingness to support CCTs


Enduring engagement with sustainable CCTs will promote and advance at least 6 SDG goals. For foreign multinationals contributing to the local, sustainable development of the host country might increase social legitimacy, reduce liabilities of foreigners and maximize their license to operate (Gomez-Trujillo et al., 2020; Gonzalez-Perez et al., 2021; Hult et al., 2018)
Long term:
  • Offer goods and services

  • Offer employment

  • Business training

  • Limited partnerships with governments (CCTs) and local communities

Source: Authors

Notes

1.

Although we obtained detailed information from the Philippines pilot study, we decided to exclude this CCT in our five cases as we were focused on CCTs in Latin America.

2.

We acknowledge and appreciate an anonymous reviewer for suggesting this.

Supplementary material

The supplementary material for this article can be found online.

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Further reading

Bono de Desarrollo Humano, available at: https://dds.cepal.org/bpsnc/programme?id=15

London, T. and Hart, S.L. (2004), “Reinventing strategies for emerging markets: beyond the transnational model”, Journal of International Business Studies, Vol. 35 No. 5, pp. 350-370, doi: 10.1057/palgrave.jibs.8400099.

Corresponding author

Maria Alejandra Gonzalez-Perez can be contacted at: mgonza40@eafit.edu.co

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