Have cash transfers succeeded in reaching the poor in Latin America and the Caribbean?

We present original estimates of the quality of targeting of conditional cash transfer (CCT) and non-contributory pension (NCP) programmes in Latin America and the Caribbean. Our contribution is novel because we use both national and international poverty lines; provide differentiated estimates for urban and rural areas; and compare the CCT and NCP programmes. We show that leakage to the non-poor coexists with pervasive under-coverage of all poor, including the extreme poor. On average, the CCTs cover only 50.5% of the extreme poor in households with children under 18 years of age. Similarly, the NCPs cover only 50.9% of the extreme poor in households with elderly members who do not receive a contributory pension. At the same time, 40.4% of CCT beneficiaries and 50.1% of NCP beneficiaries are not poor, highlighting the potential need for re-targeting and re-certification. In most countries, re-targeting could produce a substantial double benefit in terms of poverty reduction and fiscal savings.