Designing a Results-Based Financing Mechanism for ICBF Child Development Centers in Colombia
In Colombia, the Institutional Model for Child Development Centers (CDIs), managed by the Colombian Institute of Family Welfare (ICBF), provides free, comprehensive early childhood care.
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Abstract
In Colombia, the Institutional Model for Child Development Centers (CDIs), managed by the Colombian Institute of Family Welfare (ICBF), provides free, comprehensive early childhood care. To optimize resources and improve quality, ICBF and UNICEF partnered with Instiglio to design an RBF mechanism that optimizes childhood centers procurement processes. The resulting design tied roughly 20% of contract value to child development and quality outcomes, giving operators the flexibility to innovate while aligning incentives and holding them accountable for children’s well-being results. Over 22 weeks, the team defined a theory of change, payment metrics using validated instruments (EAD-3 and IMCEIC), and established operator selection criteria. Although this mechanism was not implemented at ICBF, the design laid the groundwork for a subsequent pay-for-results pilot in Bogotá’s childcare centers which was successfully carried out.
The Challenge
As part of Colombia’s National Policy for Comprehensive Early Childhood Development, De cero a siempre, ICBF prioritized improving holistic development outcomes for young children and increasing transparency in procurement processes for early childhood services.
Historically, childhood development centers have operated through a network of providers to deliver services. However, the traditional contracting model rewarded administrative compliance over measurable impact.
A prior feasibility study identified structural challenges limiting public spending effectiveness include a lack of common standards for routinely collecting child development data (e.g., IMCEIC, IVDAN), weak incentives for service quality, and limited flexibility for operators to innovate. Addressing these issues became central to ensuring every peso invested translated into tangible benefits for children.
The Solution
ICBF engaged Instiglio, in partnership with UNICEF, to design an RBF mechanism for CDI procurement processes. The project targeted improvements to the quality, efficiency, and impact of public spending by shifting service delivery toward measurable outcomes and aligning financial incentives with child well-being.
The design began with a theory of change, developed through prototyping workshops with ICBF and UNICEF. Priority outcomes focused on improving child development (measured with EAD-3 and IMCEIC instruments), improving structural and process quality, and learning progress. The model was designed for three to five high-capacity operators covering approximately 3,000 enrollment slots (about 1% of national childhood centers supply). Selection criteria included operational capacity (Rank 4–5 in BNOPI), prior performance (minimum IDEAS score of 90), and sufficient scale to operate at least 1,200 slots, generating a demonstration effect for ecosystem-wide scaling.
The proposed payment structure tied approximately 20% of contract value to results: operators would place 10% of their standard contract payment at risk and could earn an additional 13% bonus above the standard rate, both contingent on external verification of results.
The final phase focused on detailing the operational blueprint for the PfR model. This included drafting adapted contract templates, defining observational and census-based verification systems, aligning information systems around EAD-3 and IMCEIC, and analyzing the Logra Outcomes Fund as a financial vehicle. A Technical Annex specified roles and procedures, and a training and communications strategy was designed for ICBF teams and prioritized operators to build shared understanding of the PfR logic.
This design work demonstrates how results-based financing principles can be embedded in public procurement, and it directly informed the subsequent pay-for-results pilot in Bogotá’s kindergartens (SDIS), which moved from design to full implementation.
The Impact
The design process yielded key insights into what it takes to embed results-based financing in Colombia’s early childhood system. These design-stage learnings—which directly shaped the subsequent SDIS kindergarten pilot—include areas for improvement, critical to the project’s sustainability as well as adjustments to technical design and information systems to ensure that financial incentives effectively drive the desired outcomes in child development and service quality.
Data infrastructure as a design prerequisite
The design process reveamproving the collection and reporting of data from the EAD-3 and IMCEIC instruments is critical. The country lacks a common standard for routinely collecting these indicators constrains metric accuracy and underscores the need for robust, independent verification systems before the PfR mechanism can scale nationally.
Designing for long measurement horizons:
The team found that child development indicators require extended timeframes to show significant change. Periodic review of indicator definitions and weightings is needed to ensure rewarded results are directly correlated with pedagogical improvements and not confounded by factors beyond the operators’ control.
Building Operator Readiness into Design:
The design highlighted that service providers need a dedicated training strategy before transitioning to a pay-for-results model. Technical and management teams must understand how flexibility in their intervention model translates into measured outcomes and how meeting milestones directly affects funding.
Calibrating incentive intensity at the design stage:
The design work showed that both the share of the contract tied to results (about 20%) and its distribution between child development outcomes and quality indicators are essential to driving real behavioral change. The team recommended adjusting the bonus percentage based on providers’ risk aversion and prioritizing quality indicators over basic-care proxies to deepen impact.
Navigating legal and budgetary constraints:
The design process surfaced coordination challenges tied to budget timelines and ICBF’s legal ability to commit to future payments under “uncertain outcomes.” Smoother integration with the legal office, clearer supervisory roles in results validation, and the use of financial vehicles such as the Logra Outcomes Fund are necessary to avoid bottlenecks.