Some governments in Latin America adopted conditional cash transfer programs with operational rules that include strict eligibility criteria, well-defined operation rules, and rigorous implementation strategies; other governments adopted less robust CCTs; and yet other governments did not adopt a CCT at all. Why did some governments and not others pursue poverty relief programs insulated from politics? This chapter explains the political processes that led some governments to tie their own hands in crafting and adopting CCT programs.

The chapter is organized as follows: The next section introduces the players in the political game. Then, I describe in detail the actions available to each player and outline their preferences. Then, I discuss optimal policy choices. The chapter concludes with a discussion of the implications of the argument for policy outcomes.

Players

The executive government, president hereafter, is directly responsible for the design, adoption, and implementation of CCTs. Yet the president cannot act unilaterally, because CCTs are not entitlements. Program funds are reviewed and approved on a yearly basis by legislators, who are in charge of approving the federal budget. Thus, although legislators have less fiscal responsibility and are not directly responsible for decisions related to public policies (Murillo 2009), they can use their budgetary powers to influence public policies (Ting 2001).

In principle, most political constitutions in Latin America grant powers of initiative to the president in budgetary matters, but grant legislators the power to approve or reject the president's budget. In practice, legislators throughout the region use their budgetary powers routinely, even in countries where restrictions on amendments exist, and even in those cases when appropriations are approved through presidential decree powers (Shugart and Carey 1992). The institutional budgetary arrangement is an avenue through which executive and legislative powers “keep each from exceeding its legitimate authority” (McCarty 2004, 413).

Elections produce a president (P) and one of three types of median legislators.