Utilizing Results-Based Financing to Strengthen Sanitation Services

Results-Based Financing (RBF), which offers incentives for behavior change based on results,  has achieved practical success in both the health and education sectors. To date, however, applications of RBF in the sanitation sector have been limited.

In Identifying the Potential for Results-Based Financing for Sanitation, a new Working Paper published by the Water and Sanitation Program and the SHARE consortium, Sophie Trémolet offers practical ideas to apply RBF financing mechanisms to improve the delivery of sustainable sanitation services.In the paper, Trémolet discusses how RBF can target behavior change at both macro and micro levels — such as offering incentives for elevating sanitation’s priority in policy making or paying latrine emptiers to deliver sludge to a specified location. The paper explores how RBF mechanisms might be applied to

  • re-target sanitation incentives,
  • offer an alternative to traditional household and supplier subsidies, and
  • provide output-based aid (OBD) to improving water and sewer connection.

Although results-based approaches have great potential, RBF instruments are relatively new and remain largely untested. As Trémolet notes, it will be necessary to “invest great care in their design and to evaluate the costs and benefits of such schemes, particularly when compared to more traditional forms of financing.”

For more information please contact Sophie Trémolet at wsp@worldbank.org.

See Related WSP Resources:

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