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 people Deaths 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 incidence HealthEducation 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 (%) CountryMean Ghana Madagascar Peru 2001 (utilities) 30 Tanzania Uganda 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. CountryMean Chad Senegal Cameroon Rwanda 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 Riches t fifth RatioPoores t fifth Richest fifth Ratio Chad Nigeria CAR Haiti India Bolivia Morocco Source: 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

A framework of relationships of accountability Poor peopleProviders

A framework of relationships of accountability Poor peopleProviders Policymakers

Client-provider Strengthen accountability by: Choice Participation: clients as monitors

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

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 Policymakers Contracts- Purchasing Selection of providers Monitoring Self Regulation Legislative framework Citizens’ Monitoring Participatory budgeting Coalitions Money power Co-management Monitoring Litigation

Poor peopleProviders 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?

Making Services Work for Poor People