The paybacks and pains of Payment by Results (part 1)

Our series of reflections on the WASH Results Programme’s learning starts by identifying where Payment by Results has added value.

Payment by Results (PBR) has been “a highly effective means of incentivising delivery at scale” according to the people that deliver the WASH Results Programme. This finding taken from the report of a recent WASH Results learning event may surprise some PBR naysayers. However, as this first post in a series of reflections on the report shows, when the donors, suppliers and verifiers of WASH Results came together to reflect on their experience of actually delivering and verifying the programme, they were able to agree on several positives alongside their concerns.

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Participants of the WASH Results 2016 Learning Workshop exploring areas of agreement.

The pros and cons of PBR in development are hotly debated online, but the Center for Global Development reminds us that when discussing PBR, we should be clear about who is being paid, for what and how. The particular way in which WASH Results was designed has therefore influenced the experiences of its suppliers (SNV, and the SAWRP and SWIFT consortia). An important feature of the design (extrinsic to the PBR modality) is that delivery was tied to the water and sanitation target (Target 7.C.) of the Millennium Development Goals. The programme began with an extremely time-pressured initial ‘output phase’ to December 2015 (focussing on installation of WASH infrastructure), followed by an ‘outcomes phase’ that started this year. Another key design feature is that WASH Results is 100% PBR. The nature of the results, however, were agreed on a case-by-case basis with each supplier and include outputs, outcomes and in some cases, process-type activities.

Sharpening focus on results
It is certainly the case that the WASH Results Programme has delivered huge results within a very tight time-frame. Earlier this year, for example, SWIFT reported having reached close to 850,000 people with two or more of water, sanitation or hygiene services. During the workshop participants broadly agreed with the statement that PBR was an important factor in incentivising delivery. Some questioned the extent of the contribution of the PBR mechanism, highlighting instead their core commitment to delivery. However, others were clear that the PBR mechanism has sharpened the focus on achieving results:

Grants have never made it so clear that you ought to deliver. Country directors have to deliver in ways that they have not necessarily had to deliver before and this transpires through to partners, local governments and sub-contractors…Quite a number of these actors have started to applaud us for it.” (Jan Ubels, SNV).

Different consortia passed on the risk of PBR to partners in different ways and the SNV experience reflects their particular approach. But it is evident that the clarity of expectations and pressure to deliver across consortia has been effective in generating results. So, apart from the focus on delivery, what else did people value about the way that PBR has been implemented in the WASH Results Programme?

Flexibility in PBR design
In particular, participants valued the flexibility shown by DFID in setting targets and results milestones to reflect different programme approaches – including agreeing payments for process achievements in some cases. Flexibility in definitions also allowed alignment with local government definitions. The drawback of this flexibility was lack of clarity about expectations and lack of standardisation across different suppliers.

Flexibility in implementation
Suppliers have been able to reallocate resources in response to changing contexts and priorities, without negotiating with the donor. It has also been possible to spread risk across multiple sites of operation; overachieving in one location to offset lower results in another.

Clarity of reporting
The focus on results has driven investment and improvements in Monitoring and Evaluation which is broadly thought to have value beyond the programme. Although reporting requirements that are focused exclusively on results are demanding, people welcomed not having to do the activity reporting that is a feature of many other forms of aid.

Some positives were identified during the discussions at the WASH Results workshop and there is much to celebrate. However, a central theme in the workshop was the ongoing challenge of how to place value (in commercial/financial and value for money terms) on intangible aspirations and benefits, such as reaching the most vulnerable and investing in the processes and social capital that underpin effective programming. These challenges will be explored in the next post.

Catherine Fisher, Learning Advisor, WASH Results MVE Team

The report from the workshop is available to download from DFID’s Research for Development website. 

As always, if you have any ideas or observations about this topic, we encourage you to Leave A Reply (below), or email us.

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