Output-based Aid for Sustainable Sanitation

A review of the experience to date in applying output-based and other results-oriented financing aid formats to the delivery of sanitation services and goods in developing countries. The paper looks at the theoretical underpinnings which justify output-based subsidies in sanitation, reviews a selection of output-based aid projects and then proposes some new approaches which could help to make financing in sanitation more effective and accountable

Identifying the Potential for Results-Based Financing for Sanitation

Results-based financing (RBF) covers a number of financial tools in which funding is contingent on achieving specified outcomes. RBF has been used across various sectors of international development to some success and this paper explores the potential for applying it to sanitation. In doing so, the author considers the presence of misaligned incentives in the sanitation sector, and then walks us through various points along the value chain at which RBF could be employed. Design and implementation of such strategies requires careful consideration of potential challenges, including how to avoid creating perverse incentives

Market-based Approaches to Environmental Management: A Review of Lessons from Payment for Environmental Services in Asia

Market-based approaches to environmental management, such as payment for environmental services (PES), have attracted unprecedented attention during the past decade. PES policies, in particular, have emerged to realign private and social benefits such as internalizing ecological externalities and diversifying sources of conservation funding as well as making conservation an attractive land-use paradigm. In this paper, we review several case studies from Asia on payment for environmental services to understand how landowners decide to participate in PES schemes. The analysis demonstrates the significance of four major elements facilitating the adoption and implementation of PES schemes: property rights and tenure security, transaction costs, household and community characteristics, communications, and the availability of PES-related information. PES schemes should target win-win options through intervention in these areas, aimed at maintaining the provision of ecological services and improving the conditions for local inhabitants

Payment for Environmental Services: First Global Inventory of Schemes Provisioning Water for Cities

In the perspective of the World Water Day 2011 - "Water for Cities" (March 22, 2011), the Natural Resources Land and Water Division (NRL) of FAO has launched an inventory of environmental schemes provisioning water to cities. Up to date there have been several studies addressing the payment for watershed services around the world, conducted by various UN agencies, NGOs, etc. None of these studies so far has focused on the PES schemes providing the water supply for cities and industries, i.e. urban areas. In that sense this inventory is unique. The report offers a very useful inventory of identified PES - "water for cities" schemes around the world. The report can be used as basis for further pursuit of information and analysis of the most relevant cases at least, and possible replication of these cases, primarily in East Africa that has become an area of interest lately for the potential development of this market based scheme in order to address the water issues of the region

Community-based health insurance and social protection policy

Of all the risks facing poor households, health risks pose the greatest threat to their lives and livelihoods. A health shock adds health expenditures to the burden of the poor precisely at the time when they can afford it the least.One of the ways that poor communities manage health risks, in combination with publicly financed health care services, are community-based health insurance schemes (CBHIs). These are small scale, voluntary health insurance programs, organized and managed in a participatory manner. They are designed to be simple and affordable, and to draw on resources of social solidarity and cohesion to overcome problems of small risk pools, moral hazard, fraud, exclusion and cost-escalation. Less than 10 percent of the informal sector population in the developing nations has health coverage from a CBHI, but the number of such schemes is growing rapidly. On average, CBHIs recover between a quarter to a half of health service costs. As a social protection device, they have been shown to be effective in reducing out-of-pocket payments of their members, and in improving access to health services. Many schemes do fail. Problems, such as weak management, poor quality government health services, and the limited resources that local population can mobilize to finance health care, can impede success.Health Economics&Finance,Health Monitoring&Evaluation,Poverty Assessment,Safety Nets and Transfers,Insurance&Risk Mitigation

Viewing microinsurance as a social risk management instrument

The objectives of this paper are to highlight some of the potential and limitations of microinsurance in the context of Social Risk Management (SRM) framework to stimulate further discussion. The paper draws on existing literature on SRM and microinsurance. Where relevant, it invokes lessons from microfinance. The authors conclude that there is potential for efficient and equitable risk management through microinsurance, but also limitations. Microinsurance may be an acceptable means of managing a few limited forms of risk, but not all. SRM practitioners need to recognize that effectiveness of any risk management instrument depends on the nature of risks, household and group characteristics and dynamics, and the availability of alternative risk management options. SRM options should strike a balance between household risk management activities and the multiple instruments available at different institutional levels, including informal, market-based, and publicly provided mechanisms. Microinsurance is a potential part of the SRM toolbox, but risk management can be enhanced through different mechanisms or combinations of them.Insurance&Risk Mitigation,Banks&Banking Reform,Non Bank Financial Institutions,Environmental Economics&Policies,Health Economics&Finance