Incentive-Systems

CONFERENCE PAPER #8 WORKING DRAFT, NOVEMBER 06

INCENTIVE SYSTEMS: INCENTIVES, MOTIVATION, AND DEVELOPMENT PERFORMANCE

A UNDP CAPACITY DEVELOPMENT RESOURCE

Capacity Development Group Bureau for Development Policy United Nations Development Programme November 2006

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CONTENTS Page ACRONYMS AND ABBREVIATIONS EXECUTIVE SUMMARY I. II. III. Introduction Incentives Strategy in Application Operational Implications ANNEXES 1. Annex 1: 3 Case Studies 2. Annex 2: Bibliography 3 4 5 7 9 22

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ACRONYMS AND ABBREVIATIONS ADB CAP2015 CDG DFID ECDPM FAO GEF ILO LENCD OECD /DAC UNDG UNDP UNESCO UNEVOC UNICEF USAID WBI Asia Development Bank Capacity 2015 Capacity Development Group Department for International Development (UK) European Centre for Development Policy Management Food and Agriculture Organization Global Environment Facility International Labour Organization Learning Network on Capacity Development Organisation for Economic Cooperation and Development/Development Assistance Committee United Nations Development Group United Nations Development Programme United Nations Educational, Scientific, and Cultural Organization United Nations International Centre for TVET United Nations Children Fund United States Agency for International Development World Bank Institute

Acknowledgments This note has been drafted by Thomas Theisohn (Independent Expert) and Tony Land (Independent Expert). Rasheda Selim provided independent editorial comment. It has benefited from a technical review provided by Philip Courtnadge (UNDP/Regional Bureau for Asia & Pacific), Dele Olowu (Asia Development Bank), and Elizabeth Paul (Asia Development Bank). Contact Information: Conference Paper series Production team, Capacity Development Group/BDP, UNDP: Editor: Researcher: URL: Kanni Wignaraja, [e-mail] Dalita Balassanian, [e-mail] www.capacity.undp.org

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EXECUTIVE SUMMARY It is possible to distinguish factors that have motivational effects

Bibliography: Adams, Orvilland Hicks,V. (2000) : Pay and non-pay incentives, performance and motivation, prepared for WHO, December 2000, Global Health Workforce Strategy Group Attanasio, Orazio, Costas Meghir and Ana Santiago (2005) : Education choices in Mexico: Using a structural model and a randomized experiment to evaluate progresa Berg, Elliot, and the United Nations Development Programme (1993). Rethinking Technical Cooperation: Reforms for Capacity-Building in Africa. New York: UNDP and Development Alternatives International. Boesen, N. (2004). Between Naivety and Cynicism: A Pragmatic Approach to Donor Support for PublicSector Capacity Development Cervantes, Mario and Dominique Guellec (2002): The brain drain: Old myths, new realities, By, Directorate for Science, Technology and Industry, Published: May 2002 DAC GOVNET (2006): Draft Tip Sheet on Pay Reform, Room Document 10, 8th meeting 13-14 June, 2006 DAC/OECD (2006). The Challenge of Capacity Development: Working Toward Good Practice Dujardin, Bruno and Noterman, Jean Pierre (2006): “Si nous voulons continuer à être inefficients, continuons à ignorer les priorités desacteurs des systèmes sociaux”,working paper Glewwe,Paul, Ilias, Nauman, and Kremer, Michael (): Teacher Incentives Hongoro, Charles and Normand, Charles (??): Health Workers: Building and Motivating the Workforce IDRC (2002): Organizational Assessment Khan, Rahman Zillur and Zafarullah, Civil Service Systems, Bangladesh, Paper prepared for the Comparative Civil Service Research Consortium, Indiana University, Bloomington, Indiana, USA Kiragu, Kithinji and Mukandala, Rwekaza (2005): Public Service Pay Policies; Pricewaterhouse Coopers; Final Draft for Discussion and Comments at the Dissemination Workshop , http://www.gsdrc.org/docs/open/SD30.pdf Lopes, Carlos, Thomas Theisohn and UNDP (2003). Ownership, Leadership and Transformation; Can we do better for Capacity Development? UNDP/Earthscan. Paul, Elisabeth, and Marc Robinson (2007), "Performance Budgeting, Motivation and Incentives", in "Performance Budgeting: Linking Funding and Results", Washington, DC: International Monetary Fund (forthcoming). Sida (2006) : Power Analysis – Experiences and challenges Standing, Hilary ( 2004) : Understanding the 'demand side ' in service delivery - Definitions, frameworks and tools from the health sector, DFID issues paper, March 2004 UNCDF (2005): Delivering the goods: Building Local Government Capacity to achieve the MDGs – A practitioners guide UNDP Human Development Report 2001 UNDP Practice Note on Public Service Reform World Bank 2004: World Development Report 2004: Making services work for poor people. 25