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This Working Paper was written in September 2007 by the Sector and Policy Division for Health, Education and Social Protection at KfW Entwicklungsbank. It summarises the experience of German Financial Cooperation with voucher schemes as a particularly successful results-oriented approach (output based aid – OBA) in the health sector. The high poverty and MDG relevance of this innovative approach and the direct contributions made to strengthening the health systems have met with considerable interest among national and international partners. German Financial Cooperation has provided crucial impetus for this new programme approach, which can be transferred to other countries as well as to other subject areas.