What theories underpin performance-based financing? A scoping review

Abstract

Purpose

The study aims to explore the theoretical bases justifying the use of performance-based financing (PBF) in the health sector in low- and middle-income countries (LMICs).

Design/methodology/approach

The authors conducted a scoping review of the literature on PBF so as to identify the theories utilized to underpin it and analyzed its theoretical justifications.

Findings

Sixty-four studies met the inclusion criteria. Economic theories were predominant, with the principal-agent theory being the most commonly-used theory, explicitly referred to by two-thirds of included studies. Psychological theories were also common, with a wide array of motivation theories. Other disciplines in the form of management or organizational science, political and social science and systems approaches also contributed. However, some of the theories referred to contradicted each other. Many of the studies included only casually alluded to one or more theories, and very few used these theories to justify or support PBF. No theory emerged as a dominant, consistent and credible justification of PBF, perhaps except for the principal-agent theory, which was often inappropriately applied in the included studies, and when it included additional assumptions reflecting the contexts of the health sector in LMICs, might actually warn against adopting PBF.

Practical implications

Overall, this review has not been able to identify a comprehensive, credible, consistent, theoretical justification for using PBF rather than alternative approaches to health system reforms and healthcare providers' motivation in LMICs.

Originality/value

The theoretical justifications of PBF in the health sector in LMICs are under-documented. This review is the first of this kind and should encourage further debate and theoretical exploration of the justifications of PBF.

Citation

Paul, E., Bodson, O. and Ridde, V. (2021), "What theories underpin performance-based financing? A scoping review", Journal of Health Organization and Management, Vol. 35 No. 3, pp. 344-381. https://doi.org/10.1108/JHOM-04-2020-0161