This report focuses on the evaluation of the operational performance of PROGRESA. Essentially well conceived and designed programs, in the sense of having a good understanding of the outputs, can fail due to poor implementation resulting in poor delivery of inputs. In order enhance the ability of programs to achieve their objectives it is therefore essential to undertake an “operations’ evaluation” with the objective of identifying elements of the program which are experiencing operational problems....The returns to such an evaluation, in terms of improved performance, are potentially very high, especially in the context of a program as large and as complex as PROGRESA .... In this report we are concerned with this dimension of PROGRESA, i.e., with evaluating the process that delivers inputs to beneficiaries. The purpose of such an “operations’ evaluation” is to identify, early in the life of the program, any shortcomings in this process with the intention of informing corrective action.Therefore, the objective of our evaluation is solely to determine how the program is operating and why, but we purposefully refrain from prescribing solutions. We essentially identify crucial areas of program operations where corrective action needs to be taken and where further attention needs to be devoted. What corrective action is taken, and where in the policy hierarchy it takes place, is left to policy makers themselves. But we hope that the insights provided by our evaluation will contribute to this end.