ABSTRACT

Despite the abundance of empirical studies that attempt to identify the causal effect of performance-based financing (PBF) on the utilization of maternal and child health (MCH) services, the empirical analyses undertaken may reveal incompleteness and suffer from several limitations, including: lack of evidence of heterogeneity in causal impact of PBF, lack of examination of long-term impact, and, especially in the case of Burkina Faso, endogeneity due to omitted variable bias. In our study, we use event study analysis design with two-way fixed effects covering 2008-2023 to identify the causal impact of PBF on MCH. This identification strategy enables us to identify the heterogeneous dynamic effect while increasing the precision of the average treatment effect estimation by controlling for other confounding factors to avoid endogeneity concerns and assess the parallel-trend assumption. Results show that focusing on the immediate effect can be misleading as it gives the impression that PBF is at best not effective or at worst harmful. Notwithstanding, we find that all of the desirable effects during the intervention period are delayed by at least one year and that the PBF effect outlives its implementation as the desirable effects have continued for years after the suspension of the program in 2018. Overall, the PBF positively affects several MCH indicators, sometimes with a persistent effect that lasted beyond the suspension of the intervention. However, the PBF effect has been constrained by several sector-wide challenges and some counterproductive design features and practices. Performance-based financing; Event study analysis; Heterogeneous effect; Maternal and child health; Burkina Faso.