Examining the impacts of Progresa-Oportunidades on poverty and inequality: A case study in Las Margaritas, Chiapas, Mexico

In a short period of time, Conditional Cash Transfer programs (CCTs) have expanded throughout Latin America and beyond, becoming one of the main approaches to combat poverty at the global level. Among the pioneers of these types of programs is Progresa-Oportunidades, which was implemented to invest in the human capital of the rural poor with the goal of enhancing their productivity, thereby, helping to insert them into more profitable labour markets. The central argument of this research is that Progresa-Oportunidades is not only limited in its ability to reduce poverty, but is also contributing to increasing regional and intraregional inequality. In addition, the program has become a contributing factor to the worsening of labour conditions in Mexico. I argue that Progresa-Oportunidades has been an integral component of Mexico’s neoliberal development strategy, aiming to relocate subsistence farmers while providing cheap labour to other sectors of the economy. However, the failure of neoliberal policies to produce sustained economic growth and jobs, particularly in those rural areas where the program operates, has resulted in rural out-migration to urban and semi-urban areas. The result of this out-migration is that the human capital and productivity gains, as well as a portion of the cash transfers themselves, are transferred from the country’s poor rural areas to more dynamic urban centers. A case study is provided to illustrate the program’s impact on poverty and inequality in the rural and very poor municipality of Las Margaritas, Chiapas.