Comparison of Direct Transfers for Human Capital Development and Environmental Conservation

Over the past 30years, direct transfers to beneficiaries have become an increasingly important tool for addressing society’s need for effective, efficient, and equitable conservation and development, and have been widely used to generate socially desirable outcomes in human capital development (HCD) programs and Payments for Ecosystem Services (PES) programs. Yet, the two types of programs have been examined in distinct bodies of literature without much reference to each other. By systematically reviewing peer-reviewed journal articles, dissertations, and select working papers, we suggest important similarities and differences between HCD cash transfer and PES programs that have been overlooked, particularly in how direct transfers are conceptualized and operationalized and how intended and unintended program outcomes are produced. Rather than considering HCD cash transfers and PES as two distinct tools, a common framework that conceptualizes direct transfers as an umbrella mechanism to produce socially desirable outcomes can contribute to effectively engaging target populations, addressing the needs of beneficiaries in a holistic way, comprehensively evaluating program impacts, and enabling opportunities to build synergies and minimize redundancies and competition across programs. We conclude by offering five insights into future research, program development, and policy innovations. Specifically, PES programs can learn from HCD cash transfer programs to (1) incorporate considerations of economic and gender inequalities to better sustain long-term environmental outcomes; (2) enhance collaboration among PES scholars, program practitioners, and policy makers to improve PES design and implementation and minimize adverse unintended impacts; (3) use randomized control trials to measure the causal impacts of PES; and (4) reconsider the role of conditionality to promote simultaneous production of environmental, economic, and social benefits. HCD cash transfer programs can learn from PES programs to (5) explore collaborative, community-based program design and implementation to facilitate not only adoption of socially desirable behaviors but also long-term human capital gains.