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In 2003, officials in Mexico's Ministry of Social Development were debating whether to eliminate a long-standing program that provided subsidized milk to poor families. In its place, they would expand a new program that gave poor families educational and nutritional cash grants provided that they kept their children in school and made regular visits to health clinics. The milk program, operated by an agency called Liconsa, had been spared so far because it did not require direct budgetary resources due to its preferential access to imported powdered milk. Nevertheless, advocates of expanding the cash grant program argued that the milk program was redundant and less effective.

Learning Objective:
This case can be used to discuss the choices in designing assistance to the poor in economics and social policy courses or to discuss the theory of the consumer in economics courses.

Other Details

Teaching Plan:
Available with Educator Access
Case Author:
Edgar Raymundo Mladosich
Faculty Lead:
Jose Gomez-Ibanez
Pages (incl. exhibits):