Thanks, Jishnu. Excellent points.
FWIW, welfare theory made my brain turn to noodles in grad school, so I plead both ignorance AND stupidity. And I understand your post to be mostly beef against the way we're evaluating the UCTs, rather than the value of UCTs themselves.
But! My question: aren't unconditional CTs preferable to conditional ones, even in terms of welfare theory? (Isn't this revealed preferences?) Because, if we assume that we (or the government/Social Planner) just don't know what the best welfare enhancing activity is (more days in school, more bednets, bailing the husband out of jail), UCTs give us a quick way to see subjective welfare-enhancers. i.e. People vote with their shillings. Assuming rationality, *any* purchase has got to be welfare enhancing, because people only buy what's good for them? So, by definition, UCTs > CCTs, since people know their own preferences better than Social Planner/professors?
Maybe behavioral economics throws all of this out the window, but, if the Social Planner/professors are subject to the same irrationalities as the beneficiaries, this would still mean that UCTs > CCTs.
Also, from a policy perspective, don't UCTs > CCTs as well? Example: Prof. X's theory clearly shows that the biggest constraint to rural Kenya's growth is low educational attainment. But then everyone goes out and buys a tin roof with the UCTs, suggesting that maybe another few days at a (bad?) school isn't worth investing in. That would certainly be valuable to know for policymakers ("we've got to improve our schools", or, more Machiavellian, "vote for me and everyone gets a new tin roof!").