PBF, DFF, and baseline effort

In addition, institutional delivery may be a particularly salient task, especially in primary care settings. It is also a task that may be intrinsically important and well aligned with the overall mission of providing care. Midwifing a new life may be seen as the culmination of the chain of care in maternity services (Cullen et al. 2016). As a result, nonpecuniary signals or incentives for deliveries may have a disproportionate impact on deliveries relative to their impact on other services because deliveries are a task of unusual salience to health workers. There are also important potential complementarities in the production of institutional deliveries with ANC but not vice versa. To be specific, whether a woman visits a facility for the first ANC visit is not within a health worker’s control. Demand-side factors may keep women from seeking ANC, thus limiting the impact of the strategic purchasing of ANC services. However, once a woman decides to seek ANC in a health facility, the health worker may be able to convince her to come back to the facility for delivery. Indeed, such a pattern has been studied and established in several previous studies, including Basinga et al. (2011) in Rwanda and Van de Poel et al. (2016) in Cambodia. This discussion thus highlights the importance of considering the variety of factors to which health workers are required to respond in addition to the performance pay provided by the PBF pilot. Simply finding that PBF programs increase the utilization of a certain service does not necessarily imply that the impact is driven by the performance pay.

The literature presents evidence of other interventions, such as transportation vouchers and CCTs, increasing institutional deliveries, perhaps at a much lower cost and with less uncertainty in implementation. For indicators where baseline coverage is particularly low, demand-side barriers may be salient and at least partially addressed using low-cost cash transfers to patients/households. Many of the constraints to effective coverage are not in the health worker’s locus of control and thus do not necessarily respond well to PBF incentives. As a result, perhaps unsurprisingly, the findings indicate that DFF, typically paired with facility-level autonomy and supervision reforms, can improve coverage and effective coverage to a similar degree as PBF—often at a lower cost since DFF does not require a verification mechanism.

With the objective of increasing coverage or effective coverage of targeted health services, PBF programs are designed under the assumption that financial incentives will increase providers’ effort toward delivering the

incentivized services. If there is idle capacity in effort, providers may work more once the return to effort is higher. To prevent providers from increasing the provision of lower quality services, the PBF transfers typically also depend on indicators of quality of care, although the evidence provided in the previous chapter suggests that at least in Cameroon and Nigeria, PBF may have increased idle capacity anyway. Evaluations of PBF programs in low- and middle-income countries overall have found positive impacts on quality of care.

While performance pay for a single task provides a signal of the salience of the task and increases the marginal return to effort on that purchased task, PBF programs typically incentivize the provision of a set of services, each at a different rate, meaning the relative marginal return to effort on different actions is changed. The marginal return to effort on a specific service depends on whether the service is incentivized, the incentive size, and the amount of effort required to provide an additional service. The marginal return to effort exerted on one service might also depend on the number of other services provided if the services have common effort inputs, in other words, if they are complements in production (Mullen, Frank, and Rosenthal 2010; Bauhoff and Kandpal 2021). Consider, for example, the link between ANC and delivery services. Facilities establish contact with pregnant women during consultations, and preparation for delivery is one of the counseling topics that should be covered. Therefore, the effort exerted on outreach for ANC can reduce the effort required to bring women in for deliveries.

The effort required to provide an additional unit of service might also depend on other factors. For example, the marginal return to effort might not be constant but increasing. Consider a facility serving a large catchment area. The effort required to bring in individuals from nearby residences could be lower than that required to attract individuals from further villages. The characteristics of the catchment area a facility serves might also affect the marginal return to effort. For example, population density and poverty rates might affect the amount of effort required to bring in more individuals to receive services. Simply put, at high levels of coverage, the marginal effort required to increase service delivery may be higher than the performance pay offered for that service. It may also be the case that demand-side factors, not supply-side ones, keep some women from seeking care. In response, providers may reallocate effort to a lower effort task, that is, one for which existing coverage levels are low, even if that task has lower performance pay associated with it.

Figure 6.7 presents a preliminary analysis of data from the Nigeria PBF project’s impact evaluation. Using triple differences to account for