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.
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