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ABSTRACT: This paper addresses three questions commonly raised about conditional cash transfer (CCT) programs for child human capital development: (1) When to use the CCT approach? (2) How to increase the efficiency of the approach? (3) How to learn more from implementation of the approach to improve its use in alternative contexts? We use lessons derived from the Oportunidades experience in Mexico and the Bolsa Escola program in Brazil to propose answers to these questions. Answers suggest that the approach is highly efficient in inducing a change in behavior among parents toward child human capital development when the objective is not extreme poverty reduction. They also show that considerable efficiency gains can be achieved through better targeting and calibration of transfers toward children at risk of not going to school without a CCT, better understanding of heterogeneity of responses to design complementary supply-side interventions in particular according to parents’ educational levels and distance to school, use of the approach as a safety net to reduce vulnerability of child human capital to shocks, and introduction of more effective social accountability mechanisms between providers and stakeholders. There exists, however, a huge deficit in learning from past experiences and in experimenting with alternative ways of implementing CCT programs while the approach is being extended to new country contexts quite different from the ones where experience has been derived.
*The Massachusetts Avenue Development Seminar (MADS) series is an effort by the Center for Global Development and The Paul H Nitze School of Advanced International Studies to take advantage of the incredible concentration of great international development scholars in the Metro Washington, DC area. The series seeks to bring together members of this community and improve communication between them.