RAY SUAREZ: In the state or Morelos in Central Mexico, the small town of Santo Domingo Ocotitlan is rich in tradition. In elaborate costumes, villagers parade through the town square during dance festivals.
But, for all its history, Santo Domingo is very poor. Most residents are subsistence farmers. Homes are modest. Women scrub their wash over rocks at communal basins.
For generations, policy-makers have debated, what makes poor people poor? Is it the simple fact of not having enough money, or is it the choices they make, the way they live? A pioneering program here in Mexico is trying to fight poverty with both approaches by giving the poorest Mexicans cash and by trying to change the way they live.
Started 12 years ago by the Mexican government, the program, called Oportunidades -- or Opportunities -- gives a small subsidy every other month to poor mothers, like Santo Domingo resident Sixta Orcasita.
But there is a catch, one that separates Oportunidades from traditional welfare plans. Orcasita and millions of mothers like her across Mexico must first sign a contract to raise healthier, better-educated children.
Orcasita has six children. Both she and her husband, Eraclio Bello, never made it past grade school. To get their cash, they must keep their youngest children, 15-year-old Karina and 13-year-old Alex, in school. They must also bring them in for regular checkups at the health clinic.
And Sixta Orcasita must participate in monthly nutrition classes, so she can cook healthier meals for the family. Attendance is monitored, and the monthly allotment of cash, about $60 for each child, plus a monthly food stipend, will be quickly pulled if mothers fail to get their children to school or clinic. The goal is to break the cycle of poverty.
Santiago Levy, now with the Inter-American Development Bank, came up with the so-called conditional cash plan.
SANTIAGO LEVY: These families were trapped in a -- in some kind of an intergenerational mechanism, by which parents were poor, children were poor, and the next generation were also poor. The kids were so poor, they had to be picking coffee in the fields, and they couldn't go to school.
And they didn't go to school. And then, when they were adults, they couldn't get a good job. And if they couldn't get a job, they would be poor, and then their children would have to work to help support the family, and on from generation to generation.
RAY SUAREZ: It's a cycle Karina and Alex's father wants to end. Bello's first four children dropped out of school. Now he wants the cash from Oportunidades to keep his youngest children out of the fields.
ERACLIO BELLO: I hope they continue studying and get ahead. I'm prepared to help them any way I can. And I hope they make a better life for themselves than I have for myself and that they are better prepared for life than we were.
RAY SUAREZ: To sweeten the pot, Oportunidades pays the family more money each year Karina and Alex move into a higher grade and increases allowances for school supplies.
SANTIAGO LEVY: The amount of money that the kid brings into the household matters for the household. So, in a way, you are not really providing additional income. You are changing the source of the income. What you are saying is, your kid will be equally valuable to you if he's in the school, as opposed if he is in the street begging for money.
RAY SUAREZ: Of the 185 children in Santo Domingo, 108 of them are enrolled in Oportunidades. Nationally, more than 25 million people, one-quarter of the population of Mexico, are enrolled.
Not surprisingly, most families are from rural areas like Santo Domingo, where living is often hand-to-mouth, and where officials say the conditional cash program has been most effective. School enrollment jumped 85 percent in some rural areas just two years after the cash program was introduced.
Rates of malnutrition and anemia have dropped, as have childhood and adult illnesses. At Santo Domingo's middle school, Asuncion Ortiz, a teacher here for 16 years, says, changes from the cash program are easy to see.
ASUNCION ORTIZ: Little by little, the children start coming with more uniforms, better shoes. Before, their teeth were very bad because of their bad eating habits, but now, in part because of required health clinic appointments, their eating habits are better, and so their teeth are a lot better.
RAY SUAREZ: The conditional cash transfer program centers on women, who, officials say, are the key to long-term health for a family. Better-educated women raise healthier children.
So, the program turns tradition on its head. Young girls, who, for years, were considered a financial drain on the family, are now worth more financial assistance than boys. For example, Sixta Orcasita gets slightly more money for Karina's school attendance then for Alex's.
Mexico's deputy secretary of social development, Dr. Gustavo Merino, explains why.
DR. GUSTAVO MERINO JUAREZ: If you get girls who have now been able to go to school, they are going to be not just able to get a better a job and so on, but they are going to be better at probably raising their kids. They are going to have less kids. They are going to have -- take more care of them in terms of nutrition and health and prevention.
RAY SUAREZ: The program gives cash only to mothers because, supporters say, they're more likely to spend the cash on their children, while fathers, it was feared, might not bring the money back to the family, even use it for alcohol and tobacco.
As a result, officials say women have been empowered.
SANTIAGO LEVY: Resources are given to the mother, not to the father, so there has been a change of the relationship of power within the household.
RAY SUAREZ: But Oportunidades has detractors, too.
Mario Luis Fuentes, an economist in social welfare at the University of Mexico, says the government should be more focused on job creation, because, even for the poor kids who finish their education, Mexico still has few jobs.
MARIO LUIS FUENTES: So, the whole question is, at the end of secondary, at the end of the high school, these young people won't have the opportunities of job, of work, of decent work.
RAY SUAREZ: The World Bank is heavily promoting the program. Last spring, it gave Mexico a $1.5 billion loan.
Helena Ribe manages the Latin American region for the bank.
HELENA RIBE: The evidence is very compelling. And on my many years of experience working in development in all regions of the world with the World Bank, I have never seen one program that receives so much interested and that has been replicated in as many countries as this model of conditional cash transfers.
RAY SUAREZ: In fact, at least 30 countries have now adopted Oportunidades, most of them in Latin America. Cambodia and Thailand have programs. And officials from South Africa and China have contacted Mexico to investigate.
For her part, Sixta Orcasita says the short-term benefits, like putting food on the table, are as important as her hopes for the future.
SIXTA ORCASITA: The money we get from them helps a lot. Right when we run out of money, money comes in, and we can buy the things we need to get by.
RAY SUAREZ: Even with the program's successes, health advocates point out that conditional cash programs are just one piece in the complex equation needed to end poverty.