This paper examines Mexico's Program for Education, Health and Nutrition (Progresa), as an example of neo-liberal trends influencing poverty alleviation initiatives. The stated goal of the program was to break the intergenerational cycles of poverty. This end was to be achieved by investing in the basic capacities of the poor, particularly poor women and their children. Basic capacities were to be developed through cash transfers for improved nutrition, scholarships for children, and preventative health measures. The key concern of this paper, how- ever, is to examine how cash transfers for human capital development are more than instruments of poverty reduction. Rather, cash transfers are also techniques that effect a new way of governing individual con- duct. The intended effect of Progresa was a change in the subjectivity of poor women from the passive recipients of aid to empowered market subjects who were now given the freedom to make choices, albeit limited choices. However, subjects could now also be regulated through the choices they make. The Progresa program can be said to represent a government through freedom, which in turn signals a shift from governing through the direct administration of state institutions [read "passive"I to that of governing through the "active" and responsible choices of individuals and their families. [ABSTRACT FROM AUTHOR]