Pull mechanisms incentivize the private sector to work towards a defined goal. In contrast to traditional development practices that use grant models to determine the specific path to the development goal, pull mechanisms do not incentivize specific inputs and processes. Rather, pull mechanisms reward achievement of pre-defined results without preference to strategies and technologies involved in achieving these results. In doing so, pull mechanisms incentivize the private sector to overcome market imperfections. AgResults tailors its use of pull mechanisms to engage the private sector in improving agriculture innovation, research, and delivery for smallholder farmers around the world.
If used appropriately, AgResults holds that pull mechanisms have four major advantages:
Improved quality of life for smallholder farmers. AgResults aims to design pull mechanisms so that they protect smallholder farmers and often improve their current working environment. This design of the pull mechanism is distinct to AgResults.
Heightened awareness on global problems. Prizes can educate, inspire, and even mobilize the public; they focus attention on issues that can change the paradigm of what is possible.
Results-based funding. Prizes are paid only if and after the pre-defined results is achieved.
Project/Pilot processes agnostic. Funders of the initiative do not need to predict which actions will yield the desired result, as prizes are awarded based solely on the achievement of that results and not the processes or steps to obtain it.
Types of Pull Mechanisms Applied by AgResults
To date, the AgResults initiative has already achieved significant progress in modeling pull mechanisms targeting local market adoptions in its Nigeria Aflasafe and Kenya On-Farm Storage Solution Pilots. AgResults plans to build on this existing platform and to learn from those pilots to refine our approach to pull mechanisms.
$4M Haiti Mobile Money Initiative: The Haiti Mobile Money Initiative jumpstarted the delivery of financial services by mobile phone in Haiti with incentive funding. The first two mobile operators to launch mobile money services in country won US$4 million. Another US$6 million was awarded to participating mobile operators who reached five million mobile money transactions. Launched in 2010, this initiative was a partnership between the Bill and Melinda Gates Foundation and the US Agency for International Development.
$1.5B for Pneumococcal Vaccine: Launched in 2009, this US$1.5 billion initiative provided advance market commitment for pneumococcal vaccines by providing per-unit subsidies to pharmaceutical companies that adapted and produced vaccines in developing countries.