Political Economy and Results Based Financing: Client’s Power,

Voice, and the challenge of monitoring

Agnes Soucat, World Bank and Gaston Sorgho, World Bank Insitute

Results Based Financing: is it simple ?

• On the basis of the experiences of Results Based Financing presented to you.

• Which institutional and political conditions do you think have favored or hampered the development of these experiences ?

Messages

• Services are failing poor people. But they can work. How?

• By strengthening incentives – For service providers to serve the poor– For the poor to seek services– Or both …..

• By empowering poor people to– Monitor and discipline service providers– Raise their voice in policymaking

Outcomes are worse for poor peopleDeaths per 1000 births

Source: Analysis of Demographic and Health Survey data

How are services failing poor people?

• Public spending usually benefits the rich, not the poor

Expenditure incidenceHealth Education

Source: Filmer 2003b

• Public spending benefits the rich more than the poor

• Money/goods/people are not at the frontline of service provision– Public expenditure tracking results on

what reaches or is at the facility level

How are services failing poor people?

Nonwage funds not reaching schools and health services: Evidence from PETS (%)

Country Mean

Ghana 2000 49

Madagascar 2002

55

Peru 2001 (utilities)

30

Tanzania 1998

57

Uganda 1995 78

Zambia 2001 (discretion/rule)

76/10

Source: Ye and Canagarajah (2002) for Ghana; Francken (2003) for Madagascar; Instituto Apoyo and World Bank (2002) for Peru; Price Waterhouse Coopers (1998) for Tanzania; Reinikka and Svensson 2002 for Uganda; Das et al. (2002) for Zambia.

Country Mean

Chad 2004 45

Senegal 2003

40

Cameroon 2004

30

Rwanda 2003

60

Source: World Bank

Access to primary school and health clinics in rural areas

Distance to nearest primary school (km)

Distance to nearest medical facility (km)

GNI per capita

Poorest fifth

Richest fifth

Ratio Poorest fifth

Richest fifth

Ratio

Chad 1998 250 9.9 1.3 7.6 22.9 4.8 4.8

Nigeria 1999 266 1.8 0.3 5.5 11.6 1.6 7.1

CAR 1994-95 819 6.7 0.8 8.9 14.7 7.7 1.9

Haiti 1994-95 336 2.2 0.3 6.4 8.0 1.1 7.2

India 1998-99 462 0.5 0.2 2.3 2.5 0.7 3.6

Bolivia 1993-94 1004 1.2 0.0 - 11.8 2.0 6.0

Morocco 1992 1388 3.7 0.3 13.1 13.5 4.7 2.9Source: Analysis of Demographic and Health Survey data. Note: GNI per capita is in 2001 US$. Medical facility encompasses health centers, dispensaries, hospitals, and pharmacies.

• Public spending benefits the rich more than the poor

• Money/goods fail to reach frontline service providers

• Service quality is low for poor people

How are services failing poor people?

Percent of staff absent in primary schools and health facilities

0

10

20

30

40

50

Bangladesh Ecuador India Indonesia Papua NewGuinea

Peru Zambia Uganda

Primary schools Primary health facilities

A framework of relationships of accountability

Poor people Providers

A framework of relationships of accountability

Poor people Providers

Policymakers

Client-provider

Strengthen accountability by:

• Choice

• Participation: clients as monitors

Which mechanisms reinforce client power?

Which mechanisms reinforce client power?

• Money power– User fees – Bamako Initiative– Micro-insurance– Conditional Cash Transfer– Co management, participation

Impact of social marketing on ITNs ownership

0

10

2030

40

50

60

7080

90

100

%

Poorest 2nd Qtl 3rd Qtl 4th Qtr Richest

BaselineAfter 3 yearsAfter 6 years

Conditional Cash transfers

Providing resource to the poor to access services

• Mexico PROGRESA: decrease in number of illness episode among children

• Honduras: large increase (15-20%) of intake of antenatal care and growth monitoring

Poor people

Policymakers

A framework of relationships of accountability

Providers

Citizen-policymaker

• Political economy of public services

Ah, there he is again! How time flies! It’s time for the general election already!

Why don’t services work for poor people?

By R. K. Laxman

PRONASOL expenditures according to party in municipal government

Source: Estevez, Magaloni and Diaz-Cayeros 2002

Citizen-policymaker

• Political economy of public services• Formal channels• Importance of non-formal channels• Role of information

– Citizen report card (initiatives in Vietnam, Indonesia, Philippines)

– Publicizing textbook distribution in Philippines—and engaging communities as monitors

Schools in Uganda received more of what they were due

Source: Reinikka and Svensson (2001), Reinikka and Svensson (2003a)

A framework of relationships of accountability

Providers

Policymakers

Poor people

Policymaker-provider

• Contracting

• Nature of provider

• “Hard to monitor” versus “Easy to monitor”

• Information for monitoring

What not to do

• Leave it to the private sector

• Simply increase public spending

• Rely on technocratic solutions only

Of course we have progressed a great deal, first they were coming by bullock-cart, then by jeep and now this!

What not to do…

technocratic solutions…

What is to be done?

• Tailor service delivery arrangements to service characteristics and country circumstances

Short and long routes of accountability

Poor people Providers

PolicymakersContracts-Purchasing

Selection of providers

Monitoring

Self Regulation

Legislative framework

Citizens’ Monitoring

Participatory budgeting

Coalitions

Money power Co-management

Monitoring Litigation

Poor people Providers

Policymakers

Donors and service delivery: outside of the triangle

Global funds

Community Driven Development

Project Implementation

Units

Making Services Work for Poor People

What are we up against when attempting to improve aid efficiency?

What is to be done?

• Strengthen mechanisms of accountability

• Tailor service delivery arrangements to service characteristics and country circumstances

Not One Size Fits All

What is to be done?

Tailor service delivery arrangements to service characteristics and country circumstances

So what about health services

Multiple outputs, different nature of services

-Population Oriented services

-Family Oriented services

-Individual Oriented services

• Individual Oriented clinical care:– Large heterogeneity of

needs– Asymmetry of information– Conflict of interest and

supply driven demand– Difficult to monitor by both

poor users and government:

– Eg diagnostic and treatment of

• Pneumocystis carinii pneumonia

• Cerebral malaria• Toxemia

Complex services….

• Population Oriented services:

- Homogeneity of needs

– Lower Asymmetry of information because of standards

– Easier to to monitor by government/policymakers:

– Eg :

• Systematic screening

• Expanded immunization

• Population treatment (ivermectine)

• Spraying

• Micronutrient supplementation

Services can be made less complex through standardization

• Individual Oriented clinical care:– Large heterogeneity of needs

– Asymmetry of information

– Conflict of interest and supply driven demand

– Difficult to monitor by both poor users and government:

– Eg diagnostic and treatment of • Pneumocystis carinii pneumonia

• Cerebral malaria

• Toxemia

• Family Oriented services:

- Needs heterogenous

- More amenable to information

– Easier to to monitor by users:

– Eg :

• Information and peer support for safe sex

…or through empowerment ..and coproduction

• Individual Oriented clinical care:– Large heterogeneity of needs

– Asymmetry of information

– Conflict of interest and supply driven demand

– Difficult to monitor by both poor users and government:

– Eg diagnostic and treatment of • Pneumocystis carinii pneumonia

• Cerebral malaria

• Toxemia

Easy of difficult to monitor

• Three types of monitors:

–clients

–Policymakers:

–Self Regulation of providers

Who can monitor what

• Clients can monitor services that are transaction intensive, discretionary and with little asymmetry of information– Eg: use of soap. Handwashing, bed nets,

condoms, presence of teachers, presence of nurses, cleanliness of services, quanity and taste of water etc

Who can monitor what

• Policymakers can monitor services that are standards and non transaction intensive even with high assymetry of information – E.g: water access, learning of kids, diseases

surveillance, quanity and quality of standards services (immunization, antenatal care)

Who can monitor what

• Self regulation need to develop when services are both transaction intensive, discretionnary and with high assymetry of information– -eg clinical care: only doctors can monitor doctors,

engineers engineering

No One Size Fits

All

Eight sizes fit all?

Clientelistic politics• Can be measured: benefit incidence• Dynamic• Political process complex: both pro-

poor and clientelistic streams• Working at the margin: opportunities

Eight sizes fit all?

Homogeneous

• 1. “Externality”

• Public Good: eg air and water quality,

• Externalities: e.g communicable diseases, curriculum, roads, water access

• Network externalities: ef electricity grid

Homogeneous

2. Common needs eg

• Administrative requirements

• Antenatal care/ deliveries/ immunization

• School exams/ requirements

Homogeneous

3. Common destiny eg

• Policies

• Legal framework

• Standards

Eight sizes fit all?

Eight sizes fit all?

Eight sizes fit all?

Eight sizes fit all?

Eight sizes fit all?

Eight sizes fit all?

Making Services Work for Poor People