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

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  • Elisabeth Paul

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.

Suggested Citation

  • Elisabeth Paul, 2015. "Performance-Based Aid: Why It Will Probably Not Meet Its Promises," Development Policy Review, Overseas Development Institute, vol. 33(3), pages 313-323, May.
  • Handle: RePEc:bla:devpol:v:33:y:2015:i:3:p:313-323
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    File URL: http://hdl.handle.net/10.1111/dpr.2015.33.issue-3
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    Cited by:

    1. Muhammad Mustafizur Rahaman & Niaz Ahmed Khan, 2017. "Making international aid effective: An agenda for aligning aid to social business," Development Policy Review, Overseas Development Institute, vol. 35, pages 96-117, October.
    2. Caryl Feldacker & Aaron F Bochner & Amy Herman-Roloff & Marrianne Holec & Vernon Murenje & Abby Stepaniak & Sinokuthemba Xaba & Mufata Tshimanga & Vuyelwa Chitimbire & Shingirai Makaure & Joseph Hove , 2017. "Is it all about the money? A qualitative exploration of the effects of performance-based financial incentives on Zimbabwe's voluntary male medical circumcision program," PLOS ONE, Public Library of Science, vol. 12(3), pages 1-15, March.
    3. Niels Keijzer, 2016. "Open Data on a Closed Shop? Assessing the potential of transparency initiatives with a focus on efforts to strengthen capacity development support," Development Policy Review, Overseas Development Institute, vol. 34(1), pages 83-100, January.
    4. Janus, Heiner & Keijzer, Niels, 2015. "Big results now? Emerging lessons from results-based aid in Tanzania," IDOS Discussion Papers 4/2015, German Institute of Development and Sustainability (IDOS).
    5. Heidi Gjertsen & Theodore Groves & David A. Miller & Eduard Niesten & Dale Squires & Joel Watson, 2014. "A Contract-theoretic Model of Conservation Agreements," World Scientific Book Chapters, in: Kaddour Hadri & William Mikhail (ed.), Econometric Methods and Their Applications in Finance, Macro and Related Fields, chapter 15, pages 425-455, World Scientific Publishing Co. Pte. Ltd..
    6. Arild Angelsen, 2017. "REDD+ as Result-based Aid: General Lessons and Bilateral Agreements of Norway," Review of Development Economics, Wiley Blackwell, vol. 21(2), pages 237-264, May.
    7. Gallemore, Caleb & Jespersen, Kristjan, 2016. "Transnational Markets for Sustainable Development Governance: The Case of REDD+," World Development, Elsevier, vol. 86(C), pages 79-94.
    8. Correa, Juliano & Cisneros, Elías & Börner, Jan & Pfaff, Alexander & Costa, Marcelo & Rajão, Raoni, 2020. "Evaluating REDD+ at subnational level: Amazon fund impacts in Alta Floresta, Brazil," Forest Policy and Economics, Elsevier, vol. 116(C).
    9. Rudolph, Alexandra, 2017. "The concept of SDG-sensitive development cooperation: implications for OECD-DAC members," IDOS Discussion Papers 1/2017, German Institute of Development and Sustainability (IDOS).
    10. Heidi Gjertsen & Theodore Groves & David A Miller & Eduard Niesten & Dale Squires & Joel Watson, 2021. "Conservation Agreements: Relational Contracts with Endogenous Monitoring," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 37(1), pages 1-40.
    11. Matthew Dornan, 2017. "How new is the ‘new’ conditionality? Recipient perspectives on aid, country ownership and policy reform," Development Policy Review, Overseas Development Institute, vol. 35, pages 46-63, July.

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