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Economic development, institutional analysis, health systems, corruption, evaluation
Bill Savedoff was a senior fellow at the Center for Global Development where he works on issues of aid effectiveness and health policy. His current research focuses on the use of performance payments in aid programs and problems posed by corruption. At the Center, Savedoff played a leading role in the Evaluation Gap Initiative and co-authored Cash on Delivery Aid with Nancy Birdsall. Before joining the Center, Savedoff prepared, coordinated, and advised development projects in Latin America, Africa and Asia for the Inter-American Development Bank and the World Health Organization. As a Senior Partner at Social Insight, Savedoff worked for clients including the National Institutes of Health, Transparency International, and the World Bank. He has published books and articles on labor markets, health, education, water, and housing including “What Should a Country Spend on Health?,” Governing Mandatory Health Insurance, and Diagnosis Corruption.
In recent years, donors have been making greater use of performance-based payment approaches to fund development programs. The UK Department for International Development, using the broader term being used across the UK government, has added “Payment by Results” (PbR) to the development lexicon.
“Death and poverty are avoidable, but not tobacco taxes.” With this challenging statement, Prabhat Jha, Founding Director of the Centre for Global Health at St. Michael’s Hospital in Toronto laid out the most simple, cost-effective, and powerful intervention for charting a healthier future.
Development agencies are increasingly interested in making aid more transparent, stakeholder-led, and effective by expanding the use of payment by results (PbR) — rewarding those implementing projects on the basis of results delivered instead of paying for inputs. For payment by results to work, you have to get a lot of things right. It has to be for the right kind of programme targeting the right results, properly measured and rewarded in the right way. These issues, and more, are laid out in Stefan Dercon and Paul Clist’s 12 principles for payment by results (PDF).
In May 2014, Nancy Birdsall, William Savedoff, and Frances Seymour visited Brazil as part of a three-country study to gain insights into the value of future expansion of performance-based payments in other countries. This brief is based on discussions with government officials, NGO staff, private entrepreneurs, and independent researchers in Brazil about the policies and programs that are associated with reduced deforestation and forest degradation in Brazil, with particular attention to the influence of the Brazil-Norway Agreement and the Amazon Fund.
In 2006, CGD published a working group report that addressed the insufficient number of rigorous impact evaluations of social programs in low- and middle-income countries. Last week —marking 10 years since the report’s release—CGD and J-PAL co-hosted the event, “Improving Development Policy through Impact Evaluation,” which echoed three key messages of the 2006 report: 1) conduct more and better evaluations; 2) connect evaluators and policymakers; and 3) recognize that impact evaluations are an important global public good that requires more unconstrained funding.
This brief outlines the problems that inhibit learning in social development programs, describes the characteristics of a collective international solution, and shows how the international community can accelerate progress by learning what works in social policy. It draws heavily on the work of CGD's Evaluation Gap Working Group and a year-long process of consultation with policymakers, social program managers, and evaluation experts around the world.
In the world of international aid, performance payments are a hot topic. But when it comes to signing performance payment agreements, most funders have been reticent. One of the reasons is a fear of “Double Counting” – paying once for investments to achieve outcomes and a second time when the outcomes are delivered. This concern ignores the complexity of achieving development goals and the intangible assets invested by recipient countries. When funders do agree to performance agreements, they end up ignoring the burden on recipients of “Double Demanding” – disbursing when outcomes are achieved and then setting restrictions on the use of those funds. All this confusion gets in the way of designing effective aid programs.