Payment by Results in Development Aid: All That Glitters Is Not Gold
Resource type
Author/contributor
- Clist, Paul (Author)
Title
Payment by Results in Development Aid: All That Glitters Is Not Gold
Abstract
Payment by Results (PbR), where aid is disbursed conditional upon progress against a pre-agreed measure, is becoming increasingly important for various donors. There are great hopes that this innovative instrument will focus attention on ultimate outcomes and lead to greater aid effectiveness by passing the delivery risk on to recipients. However, there is very little related empirical evidence, and previous attempts to place it on a sure conceptual footing are rare and incomplete. This article collates and synthesises relevant insights from a wide range of subfields in economics, providing a rich framework with which to analyze Payment by Results. I argue that the domain in which it dominates more traditional forms is relatively small and if it is used too broadly, many of the results it claims are likely to be misleading. The likelihood of illusory gains stems from the difficulty of using a single indicator to simultaneously measure and reward performance: ‘once a measure becomes a target, it ceases to be a good measure.’ This does not mean PbR should not be used (indeed it will be optimal in some settings), but it does mean that claims of success should be treated with caution.
Publication
The World Bank Research Observer
Volume
31
Issue
2
Pages
290-319
Date
08/01/2016
Journal Abbr
World Bank Res Obs
Language
en
ISSN
0257-3032, 1564-6971
Short Title
Payment by Results in Development Aid
Accessed
27/11/2016, 09:24
Library Catalogue
Citation
Clist, P. (2016). Payment by Results in Development Aid: All That Glitters Is Not Gold. The World Bank Research Observer, 31(2), 290–319. https://doi.org/10.1093/wbro/lkw005
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