# **1: Introduction and Motivation**

In recent years, the development community and researchers to begun to pay increasing attention to the potential for leveraging cash transfer programs to foster early childhood development, or ECD (World Bank 2018a; World Bank 2018b; Black et al, 2017; Currie and Almond 2011). The rationale for the interest in this nexus is driven by two parallel developments in the literature. Firstly, a growing body of research demonstrates that investing in children’s health, nutrition, cognition and socio-emotional development during the ‘early years’ – typically defined as the period between gestation and a child’s sixth birthday, when there is a high degree of plasticity in children’s neurological development – has important cumulative effects for overall cognitive development, dramatically improving a range of outcomes, including labor outcomes, later in life (World Bank 2018a; Grantham-McGregor et al, 2007; Black et al, 2017; Currie and Almond 2011; WHO 2018; World Bank 2018b; Gertler et al. 2014; Cunha and Heckman 2007. Cunha, Heckman, Lochner, and Masterov 2006). At the same time, the global expansion of cash transfer programs into low-income countries means that such programs – which usually target the poorest families with young children – are among the few public-sector programs in developing countries that directly reach a large number of the very households where deprivations such as chronic malnutrition and other indicators of poor child development are concentrated (World Bank 2018a; 2018b). Taken together, these two developments have led to a renewed focus on the possibilities of using cash transfer programs to impact early childhood development among children growing up in poverty in low- and middle-income countries.

This interest is by no means novel. Pioneering “conditional” cash transfer programs in Latin America had an explicit focus on encouraging families to invest in their children’s human capital, often through requirements to take children to health clinics as well as school attendance and enrollment which arose from the recognition that enhanced availability of cash may be a necessary but not always sufficient condition to ensure that the desired outcomes are achieved (Lagarde et al. 2007; Fiszbein et al., 2009). More recently, research emphasizing the importance of parental behaviors on early childhood outcomes has led to a greater emphasis on incorporating ECD programming (including programs or modules on parenting) into cash transfer programs (Vargas-Baron 2009). Indeed, evaluations of cash transfer programs have revealed that they have important, measurable effects on a variety of early-childhood outcomes beyond the well-established impacts on consumption-based poverty and access to education and health services which were their initial focus (Bastagli et al. 2016; de Walque et al. 2017). These include positive impacts on mitigating the negative impact of early life shocks (Adhvaryu et al. 2016), food consumption (Adato & Bassett, 2009), nutritional diversity (Attanasio, Gomez, Heredia, & Vera-Hernandez, 2005; Fernald, Gertler, & Neufeld 2008), food security (see survey in De Groot et al. 2015), cognitive development (Macours et al. 2012), mixed evidence on nutritional outcomes such as stunting and wasting (De Groot et al. 2015), and some effects on reducing infant mortality (Rasella et al. 2013). Pro-poor cash transfer programs targeted at households with young children can thus help to mitigate the detrimental and long-lasting effects that poverty and its associated risks have on child development, supporting human capital accumulation and reducing inequality from early in life via the provision of periodic exogenous income supplements, enabling behaviors that were not previously financially possible for households (Kabeer and Waddington 2015; Tsur 2016, and many others).

However, early-childhood-focused cash transfers present a specific set of design and programmatic challenges that mean that some tools and techniques employed by more traditional cash transfers as a means of improving impact may not be as useful when applied to such transfers. Consider the role of ‘conditionality’. As discussed above, starting with early cash transfer programs in Latin America, these programs sought to buttress the effect of the cash with direct ‘conditionality’, where the receipt of the cash is conditional on certain actions (e.g., regular health care visits or school attendance) on the part of beneficiaries or their families, fostering the use of supply side services, notably in education and child health (Lagarde et al. 2007; Fiszbein et al., 2009). However, the use of formal or ‘hard’ conditionality is difficult in the case of programs focused on early childhood development, where many critical behaviors (e.g., balanced and nutritious feeding, breastfeeding, or stimulation to promote socio-cognitive growth, etc.) are private, ongoing and hard to measure, and where investments in children’s 2