Monitoring payments for watershed services schemes in developing countries

Payments for watershed services (PWS) are schemes that use funds from water users (including governments) as an incentive for landholders to improve their land management practices. They are increasingly seen as a viable policy alternative to watershed management issues, and a means of addressing chronic problems such as declining water flows, deteriorating water quality and flooding. In some places, local governments, donor agencies and NGOs are actively trying to upscale and replicate PWS schemes across the area. While their apparent success and progress in launching new initiatives is encouraging, there is still much to be learned from formative experiences in this field, especially with regard to monitoring and evaluation. This paper discuss the monitoring and evaluation criteria behind compliance or transactional monitoring, which ensures that contracts are followed, and effectiveness conditionality, which looks at how schemes manage to achieve their environmental objectives regardless of the degree of compliance.