Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean - Working Paper 120

Jessica Todd
Marie Gaarder
April 23, 2007

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Poor families in the developing world often lack the resources to take advantage of healthcare. Distance to health facilities, lost wages due to illness, the costs of care-taking and care-seeking, facility fees and other out-of-pocket costs limit access and can threaten to drive poor families deeper into poverty. Conditional Cash Transfer (CCT) programs--which transfer cash to poor mothers for use of health services and education--are one of the strategies to create incentives for the poor to use preventive health care services. Evaluations show that CCT programs work, and their use is spreading rapidly throughout the developing world. Since 1997, seven countries in Latin America and the Caribbean have implemented and evaluated CCT programs with health and nutrition components, and other countries are in the process of developing programs.

This paper analyzes key features of CCT programs and offers practical advice for the design of future CCT programs. Recommendations include:

  • Consider country context: are preventive services under-utilized by the poor the country in which you are working? What is the principal barrier to access?
  • Model the effects of a cash transfer before the program is in place, and set the amount of the transfer based on the effects you want to achieve.
  • CCT programs are most successful where the quality of health clinics is good.
  • Evaluate what happens when compliance is enforced versus when it is not enforced.
  • Target the extreme poor.
  • Learn from other programs: evaluations and experienced staff should be made available to support governments in the development of programs.

This paper is one in a series of four CGD working papers written in conjunction with the Performance-Based Incentives Working Group (Working Paper Nos. 119 – 122).

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