Outcome- and Input-Based Incentives: Evidence from the Municipal Incentive Program in Peru

Designing successful incentive schemes is challenging in the developing world. What can be done to motivate public providers to deliver quality services? Deciding whether to contract based on inputs or outcomes, or where to allocate the incentive across the hierarchy of an organization is not trivial. I will implement a large field experiment to test whether the efforts of the top-layer and lower-tier agents change in response to their type of incentive contract (input- or outcome-based). I will also test for complementarities among different levels of the organization hierarchy and the effect of incentive allocation and type of incentive contract on the desirable outcomes. I will study this in the context of Peru, where 60% of children aged six months are anemic, and where the local governments are incentivized to conduct home visits to educate families on how to prevent and reduce anemia.