When bribery pays

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Mar 13th 2008 | NEW YORK
From The Economist print edition

Paying parents to do what is right for their children is all the rage

IT IS not every day that an American city takes lessons in bribery from Latin America. But New York City's Opportunity NYC programme, a privately funded scheme that rewards parents and children with cash for doing such things as getting proper health check ups and passing school exams, owes a debt of gratitude south of the border. Britain and other European countries are looking into similar reforms. In doing so, they raise a big question: should people be paid for doing what it is already in their interest?

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Mexico's Oportunidades scheme (hence the name in New York) is discussed in the Lancet, a British medical journal, by academics at the University of California, Berkeley. It finds that the conditional money improved children's height, reduced their obesity, and improved their motor and cognitive development as well as their language skills.

One reason for the success is that the extra cash helps break down barriers. Very poor parents lack both the free time and the money to take children to the doctor, for example, so a small sum that helps cover the cost of transportation or lost wages is often enough to motivate them. It may not work in all countries, however: offering cash for check-ups to poor rural Africans will not accomplish much if there is no doctor or clinic nearby.

Fine, say sceptics, CCTs may work in poor countries but surely they are not relevant in beacons of prosperity like New York City. After all, such places have social safety nets and laws against child labour, so the poor are less likely to be so desperate that cash payments influence their behaviour. Linda Gibbs, New York's deputy mayor, strongly disagrees. She insists that welfare mothers in her city face the same sorts of crushing shortages of time and money that Latin America's poor face: “Does that mother take her child to the doctor or go to work?” A big enough cash incentive, she argues, can persuade that mother to take time off work to get her child's health check-up.

More: http://www.economist.com/finance/displaystory.cfm?story_id=10854937