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Conditionality can exclude poor households from receiving transfers. Reanalyzing
five randomized evaluations of conditional cash transfers (CCTs), we find that 9–37 percent
of eligible recipients fail to meet conditions, and they typically have lower baseline
consumption. We assess the welfare implications of budget-neutral shifts from CCTs
to unconditional cash transfers. Conditionality exacerbating inequality among eligible
recipients can be quantitatively important for welfare impacts. We quantify how
large conditionality-induced human capital gains must be for the welfare benefits of
CCTs to outweigh the inequality costs generated by conditionality.
