Results-Based Aid (RBA): New Aid Approaches, Limitations and the Application to Promote Good Governance
46 Pages Posted: 21 Nov 2012
Date Written: November 21, 2012
Results-based approaches play an important role in the current development-policy debate. There are two aspects to this debate: on the one hand, further improving the effectiveness of development cooperation (aid) is important to the specialists; whereas on the other hand, many donors (parliaments, the public, etc.) continue to call for the justification of aid expenditures. This creates great pressure to give the most concrete evidence for the utility of aid budgets.
The current international discussion on results-based approaches differs from debates so far in as much as in practice, aid has been frequently inputs and progress-oriented. For instance, approaches tend to be geared towards the allocation of funds for investment (e.g. to build schools) or providing advisory services (e.g. to the education sector), with no way of accounting for the success of such aid measures based on verifiable “results” (in the sense of outputs, outcomes or even impact). Success in aid is instead often recorded based on input or progress indicators, such as whether a country has raised its budget for education, or whether agreed upon reform documents (e.g. a general strategy for the education sector) have been adopted. Such an approach can indicate how the development activities in a partner country can be evaluated. But for two reasons its information value is limited: firstly, it is not always clear whether the intended results have actually been achieved. For instance, do a larger budget and the advice given really result in more pupils in schools? What about the quality of their education? Secondly, the question arises as to what role the development aid has had in the overall situation. If results were achieved, is there a cause-and-effect relation to aid activities (attribution challenge)?
Results-based aid (RBA) aims to identify outputs or outcomes that can be measured and quantified, i.e. results that can be directly linked to development activities. RBA is a partnership between a development partner (donor) and a partner government (recipient). The key feature of RBA is the link between the aid intervention and strong incentives to encourage results. The main innovation of RBA is based on the introduction of a new conditionality concept: a contract between both partners that defines incentives to produce measurable results. If these results are achieved, the aid disbursement will be released.
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