in: Muna Ndulo / Steve Kayizzi-Mugerwa (eds.), Financing innovation and sustainable development in Africa, Cambridge: Cambridge Scholars Publishing, 29-50
Results-based aid aims to identify results on the output- or outcome level that can be measured and directly linked to development activities. A contract between the donor and partner country stipulates that for every incremental success a set amount ("reward") will be paid. So far, experience of such aid programmes in practice remains limited. Sometimes they are a refinement of performance-based budget supports, but in other cases these programmes incentivise single indicators (i.e. pay per pupil completing school). While this concept can be promising in theory, its practical implementation might turn out to be difficult. For instance, there is a risk of creating adverse incentives because all available resources might be focused on achieving just the one indicator to the detriment of other development objectives.