Confronting Capacity Constraints on Conditional Cash Transfers in Latin America: the cases of El Salvador and Paraguay

This Working Paper offers an institutional overview and comparative analysis of the Conditional Cash Transfer (CCT) experiences of El Salvador (Red Solidaria) and Paraguay (Tekoporã). We focus on the potential contradictions and tensions that arise from the double objectives of these programmes—namely, short-run poverty alleviation and breaking the intergenerational transmission of poverty though human capital accumulation. We also examine how both programmes address these tensions and compare their approaches regarding implementation issues and administrative and institutional factors. We argue that political economy issues play an important role in the decisions taken regarding targeting criteria, monitoring of conditionalities, graduation from the programme, and exit rules. These programme features are not necessarily coherent with one another because they pursue different objectives and are justified by differing rationales. These problems might be exacerbated in a scenario—common in many developing countries—characterized by financial and institutional capacity constraints and, sometimes, weak political support for a CCT programme.