Although there is substantial research on service delivery, empirical research into how development activities incentivise better service delivery is fragmented (Tavakoli 2012; Joshi 2010). It is increasingly recognised that increasing technical or financial capacity does not automatically translate into improved service delivery performance or better development results (World Bank 2003; Andrews et al. 2012). Understanding incentives has been identified as a key variable in any thinking about motivation, behaviour, capacity and institutions involved in service delivery. Central to this is how to incentivise positive change in both the formal and informal institutions that affect service delivery.
There is no ‘best practice’ model that determines the most appropriate entry point in the chain – upstream or downstream – for interventions (Williamson & Dom 2010). This instead depends on the local context and is particular to each service delivery bottleneck. Development actors typically focus more on upstream activities, with limited attention paid to downstream activities.
Two broad, overlapping groups of development initiatives have been used by development practitioners to influence service delivery incentives:
- Incentivising accountability, transparency, participation and voice. Initiatives include: establishing codes of conduct; scorecards; surveys; user participation initiatives; school voucher schemes; parent teacher associations; heath management committees; linking budgets with performance indicators; publishing budget releases and spending reports; league tables of performance; scorecards; and public information campaigns.
- Incentivising performance. Initiatives include: changes to pay and conditions; access to organisational funding; linking performance with pay; training and career development; performance management; supervision; provision of equipment for work or private use; discussing and disseminating service delivery processes and expected standards; and introducing merit-based systems.
Development interventions can incentivise recipient governments to pretend to reform, rather than actually change. This means that state capability can stagnate or deteriorate, despite development funds and policies being in place (the ‘capability trap’) (Andrews et al. 2012).
The process of designing and implementing development interventions is crucial to their subsequent successful impact on service delivery (Andrews et al. 2012; Tavakoli et al. 2013).