Improving Local Government Performance by Giving Civil Society a Stake

Abstract

Poor public service delivery is often related to poor accountability of local governments. Here, we test a novel incentive scheme to address performance shortfalls of local governments: Independent community-based organizations (CBOs), which have strong local knowledge and social influence in their community, are given a financial stake in their local government’s performance. Through a nationwide randomized controlled trial in Burkina Faso, we show that this type of ‘third-party performance pay’ (3PPP) significantly increased CBOs’ involvement in local governance and resulted in improved municipal performance scores by 0.22 standard deviations. No adverse effects on the participating CBOs were found. We conducted a results-blind analysis to minimize experimenter bias and to ensure that our hypothesis tests are fully transparent and comprehensively reported. Our results suggest that 3PPP can be a successful and potentially highly cost-effective way of stimulating civil society participation and addressing performance deficits in local governance, and that further testing in other settings would be advisable.