Civil Conflict and Conditional Cash Transfers: Effects on Demobilization

Cash transfer programs have been successful in helping millions of people afford better livelihoods. While this is well known, little research has yet been conducted to examine the power of such programs to influence outcomes in times of conflict, especially in countries where anti-poverty programs are implemented amidst disputes against illegal armed groups. This paper focuses on the implementation of Familias en Accion, a flagship anti-poverty cash transfer program in Colombia, during the early 2000s when the country was still experiencing its long-lasting internal conflict. Impact evaluations have already shown the important effects of this program on household poverty levels and children's time allocation, including a higher incidence of school attendance and a lower incidence of child labor. Our hypothesis here is that such outcomes imply changes in the dynamics of the civil conflict, since 50% of the demobilised combatants are children mostly eligible for the transfers. We take advantage of a natural experiment that occurred during the first stage of implementation of the program in the period 2001-04 when the transfers were gradually rolled out across eligible municipalities. By setting out a difference-in-differences approach, our results indicate that the program had positive effects on the demobilisation of combatants. These findings are observed for a length of three years since the program started.