What explains the ‘punitive turn’ toward more stringent conditionalities in welfare policies? Answering this question is crucial in a region such as Latin America, where cash transfers have proven politically consequential for incumbents. Our argument emphasizes the role of electoral competition in shaping a government’s decision to adopt a more punitive approach to conditionalities. We use process tracing to test our argument in a case involving a change from relatively lax to more stringent conditionalities in Uruguay’s system of conditional cash transfers (CCTs). We also test other explanations from the welfare conditionality and the welfare and policy change literatures. We find that, as public opinion increasingly turned against state assistance to the poor, the opposition politicized the issue of non-enforcement of conditionalities. This led Uruguay’s left-wing government to shift to more stringent enforcement of conditionalities to avoid alienating members of its electoral base who were not CCT beneficiaries. Our findings contribute to the current debate on why and how governments choose to sanction welfare recipients as a response to political dynamics, both in developed and developing regions.