One of the reasons that Pay-for-Results (PfR) mechanisms are not more widely used is that they are admittedly hard to design. Yet, when tailored to meet local contexts and applied to the right kinds of challenges, a Pay-for-Results prize competition can be remarkably effective at sparking new behaviors and transforming market systems. What are the best practices in prize design, particularly to stimulate new markets for agricultural technologies? And where can development practitioners go to start?
Since 2013, AgResults has designed and implemented prize competitions to incentivize the private sector to overcome specific market barriers and invest in high-impact agricultural innovations to benefit people living in poverty. AgResults’ prize competitions fall into two categories: 1) prizes that incentivize the Research and Development (R&D) of a new solution or product to address a market failure; and 2) prizes that encourage the development of innovative delivery models that incentivize beneficiaries, usually smallholder farmers, to adopt an existing product or service at scale.
With eight years of experience, AgResults has developed a comprehensive step-by-step toolkit that walks through the entire prize design process from start to finish. The toolkit starts with Concept Sourcing, in which program designers brainstorm and evaluate potential development challenges to determine if they might be addressed through a prize competition. During concept sourcing, designers weigh donor priorities, population needs, potential development solutions, and potential impacts. The second phase is Analyzing Feasibility, which involves conducting research on relevant market systems, target beneficiaries, government and donor activities, and key private sector actors. This research assesses the prize concept’s viability and allows designers to articulate a theory of change for how the prize competition can achieve systemic change.
After that, the toolkit turns to Structuring Prizes, which helps designers define the set of parameters and rules that determine who competes, how to win the prize, and the overarching timeline. This process involves identifying potential competitors and then choosing payment indicators, structures, and triggers to create an effective and motivating prize. Following this, the toolkit highlights Right-Sizing Prizes, the process through which program designers determine the size of the prize purse for a competition. An accurate prize size will ensure that the competition properly incentivizes private sector actors to participate without overpaying them.
The final phase of prize design comprises prize verification and management. Verification enables the competition to monitor competitor progress against the defined program payment indicators. The project management approach articulates the implementation team’s responsibilities, including program marketing efforts, competitor engagement, government engagement and policy monitoring, and dispute resolution.
This webinar provides an overview of this prize design process and shows participants how they can access the toolkit to learn more.
Currently the Lead Agribusiness Specialist in the World Bank Global Agricultural Practice, Christopher Brett serves as the Bank’s representative to the AgResults Steering Committee. He has more than thirty years of experience in the public and private sectors in Africa, Asia, and Latin America. Prior to the World Bank, he worked for 9 years as the Global Head of Sustainability for a large multi-national agricultural supply chain management company. Mr. Brett has undertaken a range of consultancies for leading development organizations and the private sector, such as the World Bank, International Finance Corporation, African Development Bank, European Union, UN Development Program, commercial banks, and infrastructural development companies. He worked for 6 years in Central America as a Private Sector Development Advisor for the UK Department for International Development. Mr. Brett has a Master’s Degree in Management for Agricultural Development from Cranfield University in the UK.
Currently on the AgResults Steering Committee, Tristan Armstrong works in the Agriculture and Food Branch of the Australian Department of Foreign Affairs and Trade. He holds a PhD in plant genetics and has worked for over 15 years in agriculture, rural development, biodiversity conservation and natural resource management in Indonesia, the Solomon Islands, Papua New Guinea, New Zealand, and Sub-Saharan Africa.
Monica Barrett is a Strategy Manager with Deloitte Consulting who brings more than 10 years of experience of working with private and public sector organizations in innovative finance, impact investing, impact measurement, and program evaluation. Ms. Barrett has worked in global health, economic development, agriculture, energy and financial inclusion. At Deloitte, she has led the designs and/or launch of several AgResults Challenge Projects, whose goal is to encourage private-sector engagement in development challenges, including a $30M project seeking the development of a new vaccine for Brucellosis, a zoonotic cattle disease. Ms. Barrett has also worked with other mission-oriented clients, such as the Global Vaccine Alliance, USAID, UNICEF, and the CDC.