Take your pick: Incentivized vs. nonincentivized aid

A classroom in Indonesia. Photo by: Abdul Rahman / CC BY

Incentivized grants make a difference, says Markus Goldstein of the World Bank.

Goldstein, senior economist of the bank in the African region, arrived with this conclusion after reviewing a paper on a program in Indonesia that provides block grants — averaging $2.40 to $4.30 per person — to participating villages. The grants are for improving maternal and child health, and education in the villages.

The program has an incentivized and nonincentivized version. The paper says villages that received incentives showed more improvements on health. Further, midwives spent more hours working in incentivized areas than in nonincentivized areas, the paper adds.

But there are downsides to giving incentives, including manipulation of records and funds diversion — where money goes to richer villages. The report also says school administrators tend to overreport children’s attendance. For instance, a school reported 95 percent attendance. But a random spot-check by the researchers showed only 88 percent of the students actually showed up.

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.