Performance-Based Aid: Why It Will Probably Not Meet Its Promises

Elisabeth Paul

Development Policy Review, 2015, vol. 33, issue 3, 313-323

Abstract: type="main" xml:id="dpr12115-abs-0001">

Performance-based aid (PBA) is increasingly advocated as a way to improve the effectiveness of development aid by resolving incentive issues inherent in aid relationships, and some donors use it together with performance-based financing arrangements within partner countries. Expectations from PBA are high, but, while its rationale may look appealing, it is based on a restrictive model and is flawed when taking account of the real-world context. A number of problems associated with PBA have already been observed, and its appropriateness to provide incentives all along the chain from recipient governments to those who are supposed to produce results is questionable. Thus believing that PBA can have a mechanistic trickle-down incentive effect seems illusory.

Date: 2015
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