No impact of rural development policies? No synergies with CCTs? The IFAD-supported Gavião Project in Brazil

Abstract

We estimate the impacts of an IFAD-supported rural development project (Pro-Gavião). Because public policies are frequently implemented simultaneously rather than in isolation, we also estimate the impacts of—and possible synergies with—the Brazilian conditional cash transfer (CCT) program Bolsa Família. Developed jointly by IFAD and the State Government of Bahia, Pro-Gavião was a rural development project in 13 contiguous municipalities between 1997 and 2005. Census tract level data were extracted for the analysis from the 1995-96 and 2006 Agricultural Censuses. The evaluation uses propensity score matching to construct a control group of untreated census tracts, and a difference-in-differences estimation to identify impacts. The outcomes analyzed include land productivity, agricultural income and child labor. Although Pro-Gavião involved significant investments in the region, the results suggest little if any program impact, or synergies between the two programs. The unexpected null findings are robust to alternative approaches to identifying the treated census tracts, matching techniques, and heterogeneity in several dimensions. We show that the lack of impacts is not driven by adverse rainfall in the treated communities, or the influence of other programs in the control communities. Alternative explanations for the null results are explored.