When funding followed the headcount
A payment for each child in an institution can look like a straightforward way to cover the cost of care. But it also changes what administrators are rewarded for: each additional child brings in money, whether or not the institution provides that child with adequate food or attention.
That creates a per-child incentive. Taking in another child increases the subsidy; restricting food can reduce the cost of keeping that child. If the payment does not rise or fall with the quality of care, an administrator can improve the institution’s finances while children’s well-being deteriorates.
Who bore the cost
The financial benefit went to the institution, while the harm fell on the children. A child could remain counted—and continue generating a payment—even as the care provided to that child was cut. The funding system therefore measured occupancy, not whether children were thriving or even surviving.
This is a basic problem of poorly designed incentives: the measure used to distribute money becomes a target, even when it fails to capture the goal the money was supposed to serve. Paying by headcount could support the cost of housing children, but without safeguards tied to their welfare, it could also reward keeping beds filled and expenses low. In this arrangement, a full orphanage could look financially successful while the children inside paid the price.
