Setting Targets for Results Based Financing Programs: A Simple Cost Benefit Framework
Development programs that use financial incentives to motivate better performance are increasingly used by governments, multilaterals and private donors as alternatives to traditional input-based financing. One class of results-based financing programs uses pre-defined outcomes, or targets, to measure and reward performance. If established targets are met, then the implementing agency receives a financial bonus. In this paper, we propose a simple cost-benefit framework for setting targets.