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

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. The UK Department for International Development- (DFID-) funded WASH Results Programme (WRP) contracted three suppliers to deliver WASH programmes using a PbR mechanism. This paper reviews the experience of the WRP, drawing on a process evaluation and the experience of the first author in commissioning the programme. The WRP met its targets for people reached with first-time access to water and sanitation, and generated high-quality data on programmes, as the PbR mechanism provided strong incentives to the suppliers to improve their monitoring systems. However, the project tended to use tried and tested approaches, with limited innovation. While there was some success in fragile states, the findings suggest that PbR may be better suited for use in stable states. It is critical to consider certain key elements in the design of PbR programmes, including the proportion of funding that uses PbR, and the proportion of PbR that focuses on outputs and the proportion that focuses on outcomes.