Does payment by results work? Lessons from a multi-country wash programme

Abstract

Payment by results (PbR) for financing public services has attracted increasing interest over recent years in the water, sanitation, and hygiene (WASH) sector. PbR is attractive to funders as a mechanism because it focuses attention on results rather than inputs, and because it transfers a proportion of risk to suppliers. This paper reviews the experience of the UK Department for International Development (DFID) funded WASH Results Programme (WRP), which used PbR, drawing on a process evaluation and the experience of the first author in commissioning the programme, and the second author in evaluating it. The WRP met its targets for people reached with first-time access to water and sanitation and generated high-quality programme data. The PbR mechanism provided strong incentives to the suppliers to improve their monitoring systems. However, the suppliers tended to use tried and tested approaches, with limited innovation. It is critical to consider certain key elements in the design of PbR programmes, including the proportion of funding that uses PbR and the proportions of PbR that focuses on outputs and outcomes.