Performance Incentives in Provider Purchasing and Contracting Arrangements: Rationale and Experiences

Starting with a short vignette, this paper first describes the types of problems in low- and middle-income environments that can be (partially) solved with contracting arrangements that incorporate performance incentives. In the second half of the paper, we articulate the reasons that performance incentives hold promise, from a conceptual perspective, and review illustrative experiences with the real-world application of performance incentives. 2 The paper is based largely on the work of the Center for Global Development’s Working Group on Performance-Based Incentives.